Spring real estate has sprung

Spring brings renewed real estate activity to Minneapolis / St Paul

Spring 2016 has seen a welcome2_FTHB_1nice increase in real estate activity in the Twin Cities, MN area, with pending sales rising 12.6% compared to March 2015, and with the median sales price rising to $222,000, a nice 5.7% increase. Buyers signed 5,861 new purchase agreements.

Supply on the market remains a concern, area Realtor associations reported Thursday, with new listings rising only 0.5 percent, keeping supply levels at a 13-year low. Compared with last March, inventory levels fell 20.6 percent to 11,893 active properties.

Low inventory levels, at about a 10-year low is causing increased values, and multiple offers over asking price just days on the market for many homes for homes under $250,000.  As the home price goes up, it typically take longer for the homes to sell.

Mortgage lenders saw a large jump in mortgage loan pre-approval activity in February, which brings anecdotal evidence that there would be a surge of buyers this spring.


Nationwide January Home sales dropped 9.2 per cent

Nationwide January Home sales dropped 9.2 per cent

Americans stepped back from buying new homes in January, as purchases plunged sharply in western states where prices are typically higher. The Commerce Department said Wednesday that new home sales fell 9.2 percent last month to a seasonally adjusted annual rate of 494,000. Most of the decline stemmed for a 32.1 drop in sales in the West. Sales also slipped in the Midwest, while edging up in the Northeast and South.New Construction Loans in MN, Wi, SD

There was a sharp fall in sales of newly-built single-family homes in January. The 9.2 per cent drop took sales to a seasonally-adjusted rate of 494,000 units according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The National Association of Home Builders says that the dip follows a stronger-than-usual December and the underlying trend is positive that after an unusually high December reading, some pullback is to be expected.

The inventory of new homes for sale rose to 238,000 in January, which is a 5.8-month supply at the current sales pace and the highest level since October

Building a new home? Find new Constructions Home Loans in MN, WI, and SD here.

Side note: I always chuckle at these monthly reports.  They really have little meaning on a monthly basis.  The long-term trend is the more important view.


2015 Twin Cities home sales continue to strengthen

All signs point to Twin Cities home sales continuing to strengthen

Twin Cities homes sales maintained their strong pace through September, hitting a 10-year high, according to news releases this week from area Realtor associations.

signsThere were 5,114 closed sales last month, a 12 percent increase from last year and the highest level for September since 2005, the Minneapolis Area Association of Realtors said in a news release. Pending sales rose 12.3 percent to 4,635.

Fewer sellers listed their properties, with new listings decreasing 6.9 percent to 6,355. Inventory levels fell 16 percent to 15,928.

With more buyers than sellers, the median price rose 8.3 percent over last year to $222,000.

This supply-demand imbalance means prices have risen for 43 consecutive months, the association said.

Year-to-date prices have risen 6.8 percent on average

Also noted was a continued “product mix shift” back to traditional sales and away from distressed sales such as foreclosures. This also has brought up the median price.

We expect mortgage interest rates to stay below their long-term average for years to come, and around the low 4’s for the immediate future. The trick will be sustaining price gains that motivate enough sellers to list their properties without pricing out today’s buyers — particularly first time home buyers.

The momentum in both closed sales and pending sales certainly bodes well for 4th quarter and for a strong finish to 2015.

  • Anoka County – Up 11.4%
  • Carver County – Up 4.2%
  • Chisago County – Up 8.8%
  • Dakota County – Up 4.1%
  • Hennepin County – Up 7.5%
  • Ramsey County – Up 6.7%
  • Scott County – Up 3.4%
  • Washington County – Up 3.1%
  • Wright County – Up 14.8%
  • 13 County Metro area – up 8.3%


Home sales, listings down for November 2014

Home sales, listings down for November 2014

While still touting a housing market recovery, area real estate associations are mindful that the market is still recovering, with the fits and starts that all that entails.

Data for November bear this out, with the area Associations of Realtors reporting November decreases in pending sales, closed sales and new listings.

Pending sales, or the number of signed purchase agreements, fell 7.5 percent in November compared with last year. New listings decreased 12.8 percent. November closed sales ended down 17 percent to 3,213 sales, versus last year’s 3,873 sales.

The median sales price rose 5.1 percent to $205,000, marking 33 consecutive months of year-over-year median price gains. However, this figure was down from an October median of $209,000.

As has been the case in recent years, the year-on-year uptick in prices indicates fewer distressed properties on the market; these properties, foreclosures and short sales, are where the home sells for less than is owed on the mortgage, and typically drag down median prices.

Minnesota mortgage ratesThe Minneapolis, St Paul, Twin Cities housing market is clearly continuing the process of recovery. Sales prices are up, but on fewer overall sales. Fewer distressed sales (foreclosures and short-sales) are certainly a welcome sign for homeowners and Realtors alike.

The Minneapolis Association of Realtors cited increased condo activity for the rise in prices. The median price of new construction condominium sales rose 65.2 percent in November to a new high of $366,242, it said.

Mortgage interest rates continue to hold just slightly above historic lows, making homes very affordable.  You can check current MN, WI, and SD interest rates here.


As rates rise, should Real Estate agents worry?

Minneapolis, MN:  Yesterday the Federal Reserve “clarified” to everyone when it will likely end its economic stimulus program.  This ended weeks of speculation that has caused mortgage rates to surge to the highest levels since 2011, and up over 1/2% in physical rate in the past two months.

house_new_constructionBased on the news, it appears mortgage rates have a new bottom, which is about where they are at today. There is plenty of room for rates to move higher.  Express this to your clients, and get the fence sitters moving.

Loan Officers and Real Estate Agents have great fear for future purchase activity.  Is it founded?  “There should be some concern, but overall, I only expect a minor slowdown in purchase activity. People always buy homes, regardless of rate.” said Eric Metzler, a Senior Loan Officer with Mortgages Unlimited in St Paul, MN.

Will home sales fall as rates rise?  Sure… But most people will still buy, just maybe a little less home. As for the future?? If you are a full time experienced agent with a good past client based, I wouldn’t worry about it.

Desperate Loan Officers

Today, a huge number of Loan Officers have been living largely on refinance activity.  This business will drop dramatically as rates creep up.  Many of these Loan Officers have little, if any, purchase business experience.  We would expect to start seeing layoff’s from many of the larger banks, and online refinance powerhouses.  We should also start seeing Loan Officers back again hitting the streets, trying to drum up Realtor referral business.

My world of advice is to pass on refinance specialists trying to turn into purchase loan hopefuls.  While basic loan requirements are similar, purchase loans have a whole new world of requirements for these Loan officers, and you don’t want them experimenting on you and your clients. Stick with licensed, and experience purchase loan specialists like myself.

 


St Paul Foreclosed home sales hit 5-yr low

pdSt Paul, MN:  Sales of bank owned foreclosed homes dropped to a 5-year low according to figures compiled by RealtyTrac, Inc.

This is clear evidence, that while not over, the nation’s foreclosure woes are easing and the housing market recovery is gaining momentum.

Sales of bank owned homes in the January – March 2013 quarter fell 16% from the previous quarter, and were down 23% from the same quarter in 2012.  The last time bank owned sales were lower was the first quarter of 2008, at the beginning of the whole housing mess.

 


Minnesota home sales jump higher

Minnesota Home sales jump dramatically higher

Minnesota first time home buyersIt appears the things are changing in the housing market as Minnesota’s home sales shot up 24 percent in October from a year earlier.

It appears the pent up housing demand, combined with historically low mortgage interest rates in Minnesota, and home prices that are (on average) about equal to 2002 values, has finally gotten home buyers off the fence.

Another recent report indicated that first time home buyer numbers have begun to fall off as many of those people have already taken advantage of their buying opportunities, so who is buying the homes? Clearly move up buyers – those selling an existing home and buying something different have surged the last six months.

Surpassing most areas of the state, sales in the seven-county metro area jumped 34 percent.

For the sixth month in a row, statewide pending sales have increased, rising 33 percent versus October 2010.

In October, homes were on the market an average of 120 days. Inventory is decreasing, with new listings down 10 percent versus October 2010.