Wednesday, November 21, 2012

The Monthly Skinny November 2012

The Monthly Skinny October 2012


The Monthly Skinny September 2012

Positive Housing Outlook is the Rule of the Day

Local housing market recovery continues to roll forward in the Twin Cities 13-county metropolitan area. In September, more homes sold in less time at higher prices and for closer to asking price than last year. During the month, 4,032 homes went under contract, 11.0 percent higher than September 2011. The median sales price was up 12.3 percent to $174,000; the 10K Housing Value Index showed a more modest 6.8 percent increase to $172,208. The only missing component was seller confidence. Sellers brought 5,341 properties to the market, 4.1 percent fewer than last year. The number of homes for sale on the market fell 29.4 percent to 15,996—near a 9-year low – making seller conviction and optimism increasingly critical. 2012-09-nl
“One of the most encouraging changes in the market has been more traditional homes and fewer foreclosures," said Cari Linn, President of the Minneapolis Area Association of REALTORS®. “There's finally some room to breathe for traditional sellers."
At 30.6 percent for September 2012, the percentage of all new listings that were lender-mediated (either foreclosure or short sale) was at its lowest level since June 2008. The percentage of all lender-mediated closed sales was 35.3 percent.
These distressed sales tended to sell at a 26.6 percent discount compared to the overall market. Overall median sales price was up 12.3 percent, but prices varied by sale type. Traditional median home prices were up 6.2 percent to $207,000; foreclosure prices were up 13.7 percent to $125,000; and short sale prices were up 0.8 percent to $131,000, their first gain since June 2008.
The number of homes for sale has dropped for 20 consecutive months and is below 16,000 for the first time since December 2003. Months' supply of inventory fell 40.9 percent to 4.0 months. This indicates that the market is on the brink of favoring sellers. Figures below 4.0 months supply are moving toward a sellers' market.
The landscape for sellers continues to brighten. On average, homes sold in 101 days, 28.7 percent faster than last year at this time. Sellers received, on average, 94.8 percent of their list price, 4.1 percent more than last year. Cash buyers made up 19.3 percent of all closed sales.
“Interest rates in the Twin Cities are around 3.4 percent and buyers have a justified sense of urgency," said Andy Fazendin, MAAR President-Elect. “Housing has gone from a laggard the past few years to leading the charge in 2012."
The Monthly Skinny August 2012


Sales and Prices on the Ups as Inventory and Foreclosures Fall

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For the past six months, nearly every housing market measure has indicated improvement. The Twin Cities housing recovery is gaining momentum. What's more, the recovery has shown signs of both depth (consistency and continuity) and breadth (improvement across numerous indicators). Below are a few statistics organized by topic that equate to market recovery. Numbers given are for August 2012 and percentage increases and decreases are compared to August 2011 unless otherwise noted.
SALES
•  There were 4,877 pending sales, up 19.5 percent and marking the 16th consecutive month of increase.
•  There were 4,883 closed sales, up 12.3 percent, marking the 14th consecutive month of increase.
•  In June 2012, closed sales fell just 6 units short of a nearly 6-year high (70 months).
LISTINGS
•  There were 5,972 new listings, down 1.8 percent but a slight gain from last month.
•  There were 16,348 homes for sale, down 30.5 percent and marking the 19th consecutive month of decreases.
•  Inventory levels are at their lowest since December 2003, which is nearly a 9-year low (104 months).
•  Inventory levels have come down a total of 54.5 percent from their July 2007 peak.
PRICES
•  The median sales price was $179,000, up 15.5 percent and marking the 6th consecutive month of increase.
•  The average sales price was $222,922, up 10.4 percent and marking the 7th consecutive month of increase.
•  Categorical median sales prices shook out like this: traditional sales were $220,000, up 8.4 percent; foreclosures were $122,750, up 16.9 percent; short sales were $125,100, down 6.6 percent.
•  Price per square foot was $104, up 9.3 percent and marking the 6th consecutive month of increase.
•  The 10K Housing Value Index, which adjusts for both seasonality and housing segment bias, was up 8.1 percent to $170,656, marking the 5th consecutive month of gains.
FORECLOSURES
•  Foreclosures and short sales ("distressed properties") comprised 32.4 percent of all new listings.
•  Distressed properties comprised 35.1 percent of all active listings.
•  Distressed properties comprised 36.0 percent of all closed sales.
"With inventory levels nearing 10-year lows, buyers are scrambling to find the perfect house," said Cari Linn, President of the Minneapolis Area Association of REALTORS®. "The next step of recovery will be getting hesitant and distressed sellers back into the market."
The Monthly Skinny July 2012


Prices Flirt with 4-Year High, Traditional Sellers Return

 Looking strictly at the numbers, 2012 has signified a market in recovery. Consumer confidence is a large component of this. Buyers have confidently been borrowing at historically low rates to purchase highly affordable inventory. Sellers have been more reluctant, mostly put off by weak price movement. That's driven housing supply levels down to nearly nine-year lows. Combine this with a sales mix shifting away from foreclosures, and prices have risen for five consecutive months. Sellers are finally taking note.
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Struggling to find high-quality, move-in-ready inventory, buyers are thirsty for listings. Sellers introduced 5,851 new listings to the market, 1.9 percent more than July 2011. Leading the charge, traditional sellers listed 10.9 percent more homes than last year. The number of homes for sale has dropped for 18 consecutive months, down 30.9 percent from last July to 16,806 active listings – marking the lowest inventory reading for any month since December 2003. Months' supply of inventory dropped 43.9 percent to 4.3 months – the lowest reading for any month since December 2005.
The median sales price was up 14.3 percent to $179,950. That's the largest gain since January 2004 and the fifth consecutive month of year-over-year gains. Falling just $50 shy of matching the peak tax credit month of June 2010, July 2012 home prices reached their highest level since October 2008 (excluding June 2010). Competition among buyers and a renewed sense of urgency meant homes spent far less time on the market. Homes sold in 106 days, on average, 27.7 percent faster than last year at this time. Sellers received an average of 95.0 percent of their list price, up 3.6 percent and well above the 88.3 percent seen in early 2011.
Distressed sales accounted for 33.9 percent of all new listings and 34.1 percent of all closed sales. That's the lowest share for closed sales since August 2008. Breaking down activity by market segment, the traditional median home price was up 6.1 percent to $217,700, foreclosure prices were up 10.9 percent to $122,000, while short sales lagged, down 4.4 percent to $129,000. Traditional homes sold for 78.4 percent more than foreclosures and accounted for 65.9 percent of sales volumes, illustrating the large influence of shifting segment market shares on the overall median sales price. The segment-adjusted 10K Housing Value Index rose a more moderate 5.8 percent.
The Monthly Skinny June 2012

Recovery Evidence Mounts, Distressed Sales Rate Hits Multi-Year Low

Minneapolis, Minnesota (July 12, 2012) – The empirical evidence of a market in recovery is beginning to accumulate. Sales counts and prices are up; inventory and months of supply are down. In June 2012, buyers signed 4,917 purchase agreements, 16.0 percent higher than June 2011.

Sellers introduced 6,359 properties to the market, 8.1 percent fewer than last June. The number of homes for sale has dropped for 17 consecutive months, down 31.2 percent from last year to 17,103 active listings – the lowest inventory reading for any month since January 2004. Months’ supply of inventory dropped 44.6 percent to 4.4 months – the lowest reading for any month since December 2005.

The median sales price rose 10.7 percent to $179,500. That’s the second-largest gain since January 2004 and the fourth consecutive month of year-over-year gains. Excluding only June 2010, home prices are at their highest level since October 2008.

Homes sold in 113 days, on average, down 22.0 percent from last year. Sellers received an average of 95.1 percent of their list price, up 4.0 percent from last year. Cash buyers made up 19.3 percent of all closed sales.

“It’s difficult to find a negative trend in the local housing market right now,” said Cari Linn, President of the Minneapolis Area Association of REALTORS® (MAAR). “After many years of decline, it’s a welcome change of pace.”

One catalyst enabling these trends is the declining role of lender-mediated market activity, also known as distressed sales (foreclosures and short sales).

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Distressed sales accounted for 30.6 percent of all new listings and 34.6 percent of all closed sales, the lowest shares since June 2008 and August 2008, respectively.

Looking at price movement by market segment, traditional median home prices were up 3.4 percent to $215,000, foreclosure prices were up 10.5 percent to $124,700 and short sales were down 2.7 percent to $126,500. Traditional homes sold for nearly 75.0 percent more than foreclosures and accounted for 65.4 percent of sales volumes, highlighting the importance of market share relative to overall market median sales price.

“This is what we hoped to see with distressed sales,” said Andy Fazendin, MAAR President-Elect. “Now we just need to get traditional inventory in line with buyer demand. With rents on the rise and mortgage rates maintaining at historical lows, potential sellers should take note.”

All information is according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. MAAR is the leading regional advocate and provider of information services and research on the real estate industry for brokers, real estate professionals and the public. MAAR serves the Twin Cities 13-county metro area and western Wisconsin.
The Monthly Skinny May 2012

A Third Consecutive Month of Double-Digit Price Gains

Minneapolis, Minnesota (June 12, 2012) – The month of May provided another confirmation that the Twin Cities metropolitan area's housing market continues to positively lean toward market recovery. During the month, buyers signed 5,130 purchase agreements, 27.3 percent higher than last May, and sellers introduced 6,599 properties to the market, 6.0 percent less than May 2011. This combination of activity drove down the number of homes for sale on the market to 17,262, down 31.1 percent.
Year-Over-Year Change in Median Sales PriceThe median sales price was up 10.5 percent from last May to $169,000. That's the third-largest jump since January 2004 and the third consecutive month of year-over-year gains. Prices have risen 22.5 percent since February (from $138,000 to $169,000). Home prices are now at their highest level since October 2010.
"Residential home prices have been increasing steadily," said Cari Linn, President of the Minneapolis Area Association of REALTORS®. "It's been a positive change for our local housing market and it's been a long time coming."
Prices are "melting up" because distressed properties now comprise a smaller share of overall sales. Since traditional homes sell for a median price of $205,000, foreclosures sell for $116,350 and short sales go for $135,000, these shifts have translated into notable price gains.
Traditional closed sales were up 50.1 percent, while foreclosures fell 12.8 percent and short sales increased 12.9 percent. Together, distressed homes made up 31.1 percent of all new listings and 39.4 percent of all closed sales, the smallest shares since June 2008 and September 2008, respectively. Traditional sales made up the remaining 60.6 percent of all closings and sold for 76.2 percent more than foreclosures and 21.3 percent more than metro-wide prices, further supporting the strong gain in overall median sales price.
The number of homes for sale has dropped for 16 consecutive months, down 31.1 percent from last May to 17,262 active listings – the lowest inventory reading for any month since January 2004. The month's supply of inventory plunged 45.6 percent to 4.5 months – the lowest reading for any month since December 2005.
Homes sold in 125 days, on average, down 19.6 percent from last May. Sellers received an average of 94.5 percent of their list price, up 3.8 percent from 91.1 percent last May. Cash buyers made up 20.1 percent of all closed sales, down from 22.2 percent at this time in 2011.
"May looks great on paper and on the street," said Andy Fazendin, MAAR President-Elect. "Buyers are active, sellers are starting to see some brightness on their end and the market is rediscovering a nice balance."
All information is according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. MAAR is the leading regional advocate and provider of information services and research on the real estate industry for brokers, real estate professionals and the public. MAAR serves the Twin Cities 13-county metro area and western Wisconsin.
The Monthly Skinny April 2012

Hunting for Market Bottom? You May Have Missed It

The median sales price for the Twin Cities metro area for April 2012 was up 12.4 percent from last April to $163,000. That's the largest jump since January 2004. Since median sales price can be manipulated by the mix of homes that happen to close in a given month, whether condos, foreclosures or new construction, the Minneapolis Area Association of REALTORS® (MAAR) has developed a new home price index through its 10K Research and Marketing division that will account for that changing mix of homes selling as well as for seasonality. The 10K Home Price Index is now part of MAAR's Monthly Indicators, available at mplsrealtor.com.
2012-04-hpi
"The index will provide a more accurate view of home value movement," said Cari Linn, President of the Minneapolis Area Association of REALTORS®. "For example, traditional home sales now account for the majority of the market, which tends to drive up median and average prices since they tend to sell for more than foreclosure properties."
Indeed, traditional sales were up 58.8 percent, while foreclosures fell 8.1 percent and short sales increased 13.8 percent. Distressed homes made up 34.0 percent of all new listings and 39.3 percent of all pending sales, the smallest shares since July 2008 and August 2008, respectively. Traditional prices fell 2.2 percent to $198,500; foreclosure prices jumped 15.9 percent to $119,900; short sale prices fell 4.4 percent to $129,000. Traditional sales made up 57.1 percent of all closings and sold roughly 50.0 percent more than foreclosures and 20.0 percent more than metro-wide prices, generating the strong gain in overall median sales price.
The number of homes for sale has dropped for 15 consecutive months, down 29.2 percent from last year to 17,312 active listings – the lowest inventory reading for any month since January 2004. Months supply of inventory plunged 44.0 percent to 4.6 months – the lowest reading for any month since August 2005.
On average, homes sold in 135 days, down 14.9 percent from last April. Sellers received an average of 93.3 percent of their list price, up from 90.1 percent last April. Cash buyers made up 20.7 percent of all closed sales, down from 24.8 percent at this time in 2011.
"We're impressed with the accelerating improvements," said Andy Fazendin, MAAR President-Elect. "High-quality, move-in-ready inventory is limited. Those waiting for falling prices will likely be disappointed."