Real Estate. Economics. Business
The Minneapolis Area Association of Realtors just published data through July for 100+ cities across the metro. If you haven’t looked at this information, it’s absolutely fantastic what Jeff Allen is doing at the association. Check out the 100 here.
Medina is showing the following:
Average Sales Price: $734,051 down 10.3%
# New Listings: down 9.2%
Days on Market: 236 up 48%!
There are still 26 homes over $1,000,000 listed for sale in Medina as I publish this.
The Minneapolis Area Association of Realtors weekly report shows the continued trend of a fewer listings hitting the market with pending sales activity continuing to show slight improvement year over year.
Weekly Market Activity Report
For the fifth consecutive week and ninth of the last twelve, there were more purchase agreements written on homes than one year previous.
For the week ending August 2, there were 820 pending sales—an increase of 2.2 percent from the same week in 2007. Over the last three months, pending sales have held relatively steady, posting an increase of 0.6 percent from the same period last year. With sales tantalizing the marketplace with slight upward jiggering over the past several weeks, some might want to predict that we’ve reached bottom. While the news is encouraging, it’s a bit premature to stake that claim. Meanwhile, housing supply is clearly in decline. New listings from the most recently reported week were a stirring 19.8 percent lower than last year and were down 12.8 percent over the last three months.
This week’s edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics. Days on Market Until Sale in July fell slightly to 146 but remains up 13.3 percent from July 2007. Percent of Original List Price Received at Sale decreased to 92.6 percent, also down from last year. Months Supply of Inventory is up 8.6 percent from last year at 10.5. And our Housing Affordability Index (HAI) fell 4 points from last month to 144 due to another increase in interest rates and seasonal increases in home prices. Despite the drop, the HAI remains much improved from 2006 and 2007.
Jeff Allen, research manager, runs a blog called The Skinny. He has more information on this week’s data here.
Soon many Americans will become familiar with the term Alt-A loans just like they have over the past two years with subprime loans. While it appears the subprime problem has peaked, we apparently are at the beginning stages of the Alt-A meltdown.
The Star Tribune has run some stories discussing the foreclosures that are now starting to happen in the suburbs. While some of those properties had subprime loans, I believe we’ll start to see more and more Alt-A loans go bad in the burbs causing more defaults and foreclosures.
Calculated Risk and Housing Wire both have excellent posts on Alt-A.
Sorry, but I can’t resist at least making some comment about this. With the rapid rise in energy costs, organic food sales have been hit significantly. For a proxy of the environmentally thoughtful food consumer, check out Whole Foods – stock symbol WFMI.
Will Americans pay a premium for a “green-friendly” home right now? Green costs more. A lot more. Yes, you’ll get the sale pitch that they will somehow save more on energy costs and that you’ll feel better knowing that your purchased something that was “good” for the environment. I’ve got an idea for the national home builders. Forget the “green” stuff and just figure out how to make your new homes incredibly energy efficient and then sell that.
“Green” is nothing but another marketing gimmick promoted by corporate America. The builders should give it up and sell energy efficiency and savings.
Recently the City of Plymouth, MN was named “Best Small City” by CNN Money (CNN, Fortune and Money Magazine) in its annual review of places to live. The article is filled with lots of interesting data points.
BusinessWeek interviewed two analysts from Standard & Poors regarding the U.S. home builders. While this takes a financial angle in terms of stock price and bond quality, it’s still helpful in getting a sense where we are in the overall cycle.
A couple of key items from the article:
I would also say there is a massive shadow inventory all over the country and certainly in the Twin Cities and that is in the new developments where the lots have been fully developed, but the builders have not yet put up a house. It’s not listed on the MLS yet. There are literally tens of thousands of these empty, developed lots quietly for sale.
I am not a big user of the StarTribune.com real estate site, but I spent some time on it today. The thing that stood out in my mind was how prominent the logos were for the brokers. The brokers logos are bigger and stand out more than the photos for the homes which we are hired to sell. Do buyer really care if the home is listed by Coldwell Banker or Re/Max? Based upon the design and layout of the search page shown below, the broker appears to be most important. The agent’s name is 1/10th the size of the logo at best.
Perhaps this design was done to lure real estate brokers back to the Star Tribune. By the looks of the print component, real estate agents and brokers have all but abandoned the traditional print classified ad in the Sunday paper.
There are currently 66 distress sales in Plymouth right now. That’s 11.5% of the total inventory for sale.
The MLS started allowing agents to check a box on the MLS if the property is in foreclosure or is lender owned. I know there are many who have signed up to receive listings on Edina Realty.com, Coldwell Banker.com and Re/Max.com etc. If you are, you are getting an extremely limited view of the distress sales available in the market.
For example, I ran a search this morning on EdinaRealty.com and came up with 19 properties for sale in Plymouth, MN that are in foreclosure or are lender owned. My custom search turned up 66!
If you want access to this kind of information on an automated basis, just sign up at my web site. I can customize it to only deliver the specific cities, price ranges and kinds of housing your might be interest in.
“In wake of huge losses, Fannie Mae announces changes that will make home loans harder and more expensive to obtain.”
CNNMoney.com has a story about the rising costs of obtaining a mortgage. Higher interest rates are only part of the story. Fees will be going up as well.
The National Association of Realtors chief Economist, Lawrence Yun had this to say about the coming changes from Fannie Mae and Freddie Mac:
It’s very negative,” said Lawrence Yun, chief economist for the National Association of Realtors. “Any time there’s an additional imposition of fees in obtaining a mortgage, it knocks some potential buyers out of the market.
In my opinion these changes will likely have greater immediate impact on homes priced under $400,000. However, since every property is part of a food chain, if sellers have greater difficulty finding qualified buyers for their $300-$400k home, it makes it more difficult for them to move up to a $600-$800k home.
These are yet more hurdles for the real estate market to overcome as the great unwind continues from the debt and mortgage bubble.
