John Murphy Reports

HousingWire is running this story from the magazine they publish.  At first I thought it was crazy, but the more I read, the more I think it makes some sense.

Regional malls are dying in many parts of the country, but in some areas, they are remodeling them and attaching housing.

Perhaps as some of these big anchor tenants go away, a developer could come in and say take out a Sears store and add a 10 story building filled with condos.  Then perhaps on the other side of the mall they could take out the JC Penny’s and put in a small medical center.  Lastly, perhaps a company like LifeTime Fitness could come in and be an anchor tenant to provide exercise and rehab for the condo dwellers and the medical patients.

Thoughts?

The Twin Cities saw a fairly dramatic drop in prices from September to October according to the just released Case-Shiller Index.  The monthly decline was -3.4% and was one of the biggest drops amongst the 20 cities studied.  The overall index shows house prices off 16.3% compared to a year ago.

Note this does not account for various micro markets in the Twin Cities that include specific cities/suburbs as well as neighborhoods.  Clearly there are some areas doing better than others.  Just click around on the Minneapolis Area Association of Realtors reports (The 100).
Below is a graphical look at the latest results.  Click on any graph to enlarge in a new window.

Twin Cities has dropped to new lows on price declines according to the Case-Shiller Index – October 2008 data.

Below is a graphical display of the 10 and 20 city composite indexes.

Below is the data table for all 20 cities studied.  It shows the Oct./Sept. percentage price changes as well as the Sept./Aug. and one year changes.  (Click to enlarge)

Perhaps I’m still a little too optimistic, but I do think we’ll start to see some better comparables come spring…that doesn’t mean prices will be improving, but rather that they will begin to stablize.

The Minneapolis Area Association of Realtors is out with their final weekly report for the year and sales continue to improve at a healthy rate compared to the same period in ’07.  This has been a nearly uninterrupted trend for the second half of 2008 compared to 2007.

As I tell people often, it’s more important for the market to see improving transaction volume rather than price.  Price will not lead the market.  It will continue to lag while transactions start to rise.  In part this is due to the fact that that market will continue to chew up housing on the low end first before moving up the food chain.  Right now we’re seeing this at its extreme with so many sales happening at price points under $150,000 as we see again in this week’s report.

What’s hot right now?   Bank owned and under $150k.

Below is this week’s report.

Weekly Market Activity ReportThe recent plunge downward in mortgage rates to a decades-low level is spurring Twin Cities home sales, despite shorter days and holiday interruptions. For the week ending December 20, there were 553 purchase agreements signed (pending sales), which is an increase of 20.0 percent from the same week last year. Since rates dropped three weeks ago, there have been 368 more pending sales than there were during the same period in 2007, an increase of 27.5 percent. During this period, 57.6 percent of sales have been lender-mediated foreclosures and short sales and 45.8 percent are below $150,000.

Listing supply is relatively flat with last year at this time over the past few weeks, with an increasing share of new listings being lender-mediated. Traditionally, sellers often pull back at this time of year to wait out the holidays, but banks continue to list no matter what time of year it is.