For the week ending August 7, we didn't stray from the post-tax credit trends in the Twin Cities housing market. Pending sales remained entrenched in a holding pattern around 600 per week, continually underperforming last year's activity. The 659 purchase agreements signed were 36.5 percent below 2009 figures.
Weak sales means rising inventory. There are 27,664 homes available for sale, up 7.4 percent from a year ago. In August, there will be 8.64 homes available per buyer, up dramatically from the mark of 5.28 seen a year ago.
For now, Days on Market continues to drop slightly from last year, down 6.8 percent from a year ago to 127, but Percent of Original List Price Received at Sale for July 2010 declined from a year ago for the first time in several years, an indication that home prices will remain soft in the months ahead.
Tuesday, August 17, 2010
Tuesday, June 15, 2010
Market Update
Weekly Market Activity Report
Remember how we've been saying that the Twin Cities housing market has been getting successively slower in home sales every week since the tax credit ended? Umm, yeah, well that's still happening.
Pending sales for the week ending June 5 were another 57.0 percent behind the pace seen a year ago, dropping from 1,226 in 2009 to 527 today. This is the fifth consecutive week-to-week drop in signed contracts. While activity is down across the board, lender-mediated foreclosures and short sales are slowly increasing their market share of sales because traditional home sales have declined sharply. During this week last year, 37.8 percent of pending sales were lender-mediated; this year the share is 43.3 percent.
Thankfully, new supply is not growing in lock-step. The 1,521 new homes placed on the market for the most recent reporting week were 29.6 percent less than last year at this time. This has helped keep the Months Supply of Inventory metric at 6.9 months, down 9.3 percent from May 2009.
Remember how we've been saying that the Twin Cities housing market has been getting successively slower in home sales every week since the tax credit ended? Umm, yeah, well that's still happening.
Pending sales for the week ending June 5 were another 57.0 percent behind the pace seen a year ago, dropping from 1,226 in 2009 to 527 today. This is the fifth consecutive week-to-week drop in signed contracts. While activity is down across the board, lender-mediated foreclosures and short sales are slowly increasing their market share of sales because traditional home sales have declined sharply. During this week last year, 37.8 percent of pending sales were lender-mediated; this year the share is 43.3 percent.
Thankfully, new supply is not growing in lock-step. The 1,521 new homes placed on the market for the most recent reporting week were 29.6 percent less than last year at this time. This has helped keep the Months Supply of Inventory metric at 6.9 months, down 9.3 percent from May 2009.
Thursday, May 20, 2010
Discounted Price vs Overpriced
As possible Buyer or Seller conversations … and what are your thoughts ?
Of course, not everybody agrees that homes selling well below list price can be considered discounted.
Maybe they were just overpriced, says Barry Nystedt, the president of the National Association of Exclusive Buyer Agents. "Home buying is not an exact science," Nystedt points out. "Discount," he says, "implies savings from actual value, as opposed to a price reduction from an unrealistic asking price."
Analysts at Redfin, an online discount brokerage, think so. Crunching data from sales of 9,053 single-family houses in Los Angeles County; Fairfax County, Va.; and King County, Wash., between April 15 and June 15, Redfin found most homes fetched within 3% of asking prices.
Of course, not everybody agrees that homes selling well below list price can be considered discounted.
Maybe they were just overpriced, says Barry Nystedt, the president of the National Association of Exclusive Buyer Agents. "Home buying is not an exact science," Nystedt points out. "Discount," he says, "implies savings from actual value, as opposed to a price reduction from an unrealistic asking price."
Analysts at Redfin, an online discount brokerage, think so. Crunching data from sales of 9,053 single-family houses in Los Angeles County; Fairfax County, Va.; and King County, Wash., between April 15 and June 15, Redfin found most homes fetched within 3% of asking prices.
Tuesday, May 11, 2010
Market Update
The expiration of the tax credit clearly motivated buyers to take action by April 30. Last week, there was a significant 31.2 percent jump in Pending Sales versus last year, bringing the total number of contracts written to 1,469. But for the first time this year the number of New Listings was down. A total of 1,803 of them entered the market, 11.5 percent lower than a year ago.
Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.
We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.
Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.
We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.
Monday, May 3, 2010
Market Update
Well, the federal home buyer tax credit we've been talking about for the last 18 months has finally expired. All good (or bad, depending on your opinion) things must come to an end. Unfortunately, we won't have definitive evidence of how wild the final days of the credit were for another week as we wait for activity to be recorded in the MLS system.
In the meantime, we can still see that home sellers were far more active than home buyers for the week ending April 24, continuing a recent trend. There were 2,147 new listings during the week, an increase of 19.1 percent from a year ago. That's the seventh week of the last eight to show double-digit percentage increases in new listings.
Signed purchase agreements were also up but in a less extreme fashion. The 1,184 pending sales for the week were a 9.8 percent increase from a year ago.
As a result of the growth in new listings, we're projecting that the Supply-Demand Ratio for May 2010 will be 5.69 homes per buyer, a healthy balanced number but a smidge higher than the 5.23 mark of May 2009. Why point out such a subtle difference? Because that would be the first time we have seen a year-over-year increase since June 2008.
In the meantime, we can still see that home sellers were far more active than home buyers for the week ending April 24, continuing a recent trend. There were 2,147 new listings during the week, an increase of 19.1 percent from a year ago. That's the seventh week of the last eight to show double-digit percentage increases in new listings.
Signed purchase agreements were also up but in a less extreme fashion. The 1,184 pending sales for the week were a 9.8 percent increase from a year ago.
As a result of the growth in new listings, we're projecting that the Supply-Demand Ratio for May 2010 will be 5.69 homes per buyer, a healthy balanced number but a smidge higher than the 5.23 mark of May 2009. Why point out such a subtle difference? Because that would be the first time we have seen a year-over-year increase since June 2008.
Saturday, April 17, 2010
Time for The Tax Fights to Begin
There was a time when real estate values where on an endless escalation, household net worth was expanding, government coffers were getting fat, and all had no income restraints… or so it seemed.
Well, that was then and now is now. Consumers and homeowners know the reality of today but government is just now waking to reality.
One of the first skirmishes is about to begin on a local level - city and county sales and property tax bases. Sales and property taxes are the base line of local governments' budgets. Historically, local government has had little difficulty in meeting budgets. If they needed money they could just raise taxes, thus even if they were short this year their bonds were golden in the credit markets. But, oops something happened.
Their budget base lines increased with the property tax valuations of real property during the boom years. Many of these entities increased their sales taxes to cover expansion and debt service at the same time and now their baseline is falling faster than low tide at full moon.
SALES TAX
The first income stream to fall off is sales taxes… consumers who are losing income and net worth through job loss or shrinking home equity are not able or willing to spend as freely now as during boom times, so sales tax income is shrinking.
PROPERTY TAX
Secondly, the housing boom came to a screeching halt and values began to recede. Real Property tax income is tied to property values as the sale is recorded, triggering a reassessment of tax for that property. Thus, government spending increased in line with the increase tax valuation of properties and commitments were made against anticipated higher income streams.
While lower sale tax revenues are felt immediately. Property taxes revenues can lag for several months or even years, but they will also shrink. The tax revenue is tied to either the sale of a property or a reassessment is triggered by property owners who feel the values are lower than the earlier value used.
If the property value has truly fallen then it will benefit the owner to appeal the assessment with the appropriate agency and reduce their property tax bill. Sufficient time, nationally three to four years, has elapsed to establish a lower value for many property owners and the wave of appeals is about to begin.
This will further exacerbate the financial conditions of government and this time they cannot resort to raising property or sales taxes to raise revenue. We will soon be seeing the effects of cut spending, raising "fees" and the skirmishes in the property tax arena.
Well, that was then and now is now. Consumers and homeowners know the reality of today but government is just now waking to reality.
One of the first skirmishes is about to begin on a local level - city and county sales and property tax bases. Sales and property taxes are the base line of local governments' budgets. Historically, local government has had little difficulty in meeting budgets. If they needed money they could just raise taxes, thus even if they were short this year their bonds were golden in the credit markets. But, oops something happened.
Their budget base lines increased with the property tax valuations of real property during the boom years. Many of these entities increased their sales taxes to cover expansion and debt service at the same time and now their baseline is falling faster than low tide at full moon.
SALES TAX
The first income stream to fall off is sales taxes… consumers who are losing income and net worth through job loss or shrinking home equity are not able or willing to spend as freely now as during boom times, so sales tax income is shrinking.
PROPERTY TAX
Secondly, the housing boom came to a screeching halt and values began to recede. Real Property tax income is tied to property values as the sale is recorded, triggering a reassessment of tax for that property. Thus, government spending increased in line with the increase tax valuation of properties and commitments were made against anticipated higher income streams.
While lower sale tax revenues are felt immediately. Property taxes revenues can lag for several months or even years, but they will also shrink. The tax revenue is tied to either the sale of a property or a reassessment is triggered by property owners who feel the values are lower than the earlier value used.
If the property value has truly fallen then it will benefit the owner to appeal the assessment with the appropriate agency and reduce their property tax bill. Sufficient time, nationally three to four years, has elapsed to establish a lower value for many property owners and the wave of appeals is about to begin.
This will further exacerbate the financial conditions of government and this time they cannot resort to raising property or sales taxes to raise revenue. We will soon be seeing the effects of cut spending, raising "fees" and the skirmishes in the property tax arena.
Tuesday, February 9, 2010
Market Activity
As winter continues its streak of cold and snow, sales activity in the Twin Cities housing market is moving along at a pace you'd expect for the season and at about the same pace as a year ago. Pending sales for the week ending January 30 came in at 650, down very slightly from the mark of 673 seen during the same week last year. Over the last three months, there have been 7,038 signed purchase agreements, up a sliver-sized 0.7 percent from a year ago.
Despite the tax credit being made available to current homeowners, new listing activity has yet to show any noticeable jump. The 1,584 new listings for the most recent reporting week represent a dip of 3.1 percent from a year ago. Total inventory of available homes is still down from last year by 16.5 percent.
In related news, Days on Market Until Sale is still dropping while the Percent of Original List Price Received at Sale is still growing. While that's good news on both fronts for home sellers in general, different price points and neighborhoods are experiencing dramatically different market conditions.
Despite the tax credit being made available to current homeowners, new listing activity has yet to show any noticeable jump. The 1,584 new listings for the most recent reporting week represent a dip of 3.1 percent from a year ago. Total inventory of available homes is still down from last year by 16.5 percent.
In related news, Days on Market Until Sale is still dropping while the Percent of Original List Price Received at Sale is still growing. While that's good news on both fronts for home sellers in general, different price points and neighborhoods are experiencing dramatically different market conditions.
Tuesday, January 26, 2010
The Skinny on the Twin Cities Real Estate Market
Get up to the minute information on the Minneapolis & St. Paul Real Estate Market right here:
http://bit.ly/bD7Zw7
http://bit.ly/bD7Zw7
New Home Buyer Credit Form Released
If you were a new home buyer and are looking where to go to get the forms for your tax credit, go here: http://bit.ly/9TXpVe
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