Fannie Mae is going on the offensive with so-called “strategic defaulters.” They are increasing the penalties and not allowing those home owners to get Fannie Mae backed mortgage for 7 years. I’m not sure how they are going to exactly figure out who is committing strategic default and who is just buried in their mortgage. The key thing here is they are not going to let this go away easily.
New Home Sales Collapse
June 23, 2010 By Leave a Comment
I know this has been all over the news and some of the pundits seem to be caught off guard by the drop of some 35% in new home sales but with the tax credit expiring April 30, 2010 any momentum the new home builders had is gone. Come back again next March/April and perhaps we’ll start to see some better improvement. These stats are national and do not correlate to the Twin Cities market where there seems to be quite a bit of activity going on.
American Taxpayers May Be On The Hook for $1 Trillion – Fannie Mae and Freddie Mac
June 14, 2010 By Leave a Comment
The government as well as Fannie Mae and Freddie Mac appear to have no idea how big the bailout will be for the American Taxpayers to purchase defaulted mortgages to bailout investors, but it could be between $160 Billion to $1 Trillion. I’m not a statistician, but that seems to be an extremely large range. It shows me that they have no idea.
American Taxpayers will be responsible to pay this bill for Fannie and Freddie which of course just bailed out investors and bankers not only in the U.S. but around the world.
Americans seem more than willing to bear this cost at this point…until of course we can’t sell any more debt.
Robert Shiller – Americans’ Changing Attitude on Housing
June 14, 2010 By Leave a Comment
I missed this interview a couple of weeks ago with Robert Shiller the creator of the Case-Shiller Housing Index that is closely watched each month.
This is an interesting interview with Fortune Magazine. One of the things he is contemplating is Americans’ changing attitude toward housing. While many still see their home as a potential investment vehicle he believes that may be changing. He also asks why does the Federal Government, via Fannie Mae and Freddie Mac, continue to subsidize McMansions by their purchasing of mortgages in the secondary market?
He does mention that he thinks we’re near the bottom, but there is a chance for another leg down in pricing depending upon activity this summer. I don’t know that he knows any more than anyone else as far as the direction of housing, but it’s interesting to read his perspective given his clout in the research world for housing.
Eden Prairie, MN – Median Home Prices Increase by 7.5% – May 2010
June 14, 2010 By Leave a Comment
The Minneapolis Area Association of Realtors published their latest statistics. This is for sales completed through May, 2010. So far YTD, Eden Prairie has seen the median home price rise by 7.5%. Average prices are up 10% from the same period one year ago.
As we start to see these statistics rise, what I am finding more than price appreciation is that it is a matter of the buying public starting to gain confidence to be able to purchase higher and higher priced homes. Last year, so much of the activity was for homes priced under $250,000 and particularly under $200,000. This year we are starting to see improvement in activity in homes priced between $250,000 – $500,000.
Tricked-out Lawn Mowers – Wall Street Journal
June 14, 2010 By Leave a Comment
For those who think they have it all…the big house, fancy cars, all the power toys etc…now you need to pick up one of these tricked-out lawn mowers! The Wall Street Journal has a front page story today on these fancy mowers than cost between $3-10k.
According to the article, Hustler Turf Equipment makes a model called the “Super Z” which costs about $10,000. It’s designed for commercial use but homeowners are buying this muscle mower. Adam Mullet, Director of Marketing is quoted as saying that customers, “simply want the biggest, baddest mower on the block.”
I have not seen one of these yet. For the most part, I live in a neighborhood where people generally will hire a professional mowing crew to take care of the job. As for me, I still have my trusty 7 year old trusty Toro mower than I occassionally have to use if for some reason my son is not able to cut the grass.
Gulf Coast Real Estate – Values May Drop by 10% Due to BP Oil Spill
June 13, 2010 By Leave a Comment
Bloomberg reported this weekend that it’s estimated that the real estate in the gulf coast will decline by 10% over the next 3 years. The value of that decline they estimate at $4.3 billion. I’m sure it’s difficult for them to figure this out given the ongoing state of the disaster, but it’s clear that everyone is lining up to make their claims in what will likely be a legal feeding frenzy like this county has never seen before.
It’s very disturbing to see the oil start to wash up on those beautiful beaches in the gulf. I can’t image what those who live and work in the region are going through seeing their businesses, livelihoods, and property get wiped out by this disaster. It has become an unimaginable disaster that BP nor the Federal Government seems to be able to solve at this point.
New Construction Set to Ramp Up in Plymouth, MN
June 13, 2010 By Leave a Comment
Driving around Northwest Plymouth, it seems there is no recession in sight when in comes to new construction single family homes. Lennar continues to push around a lot of dirt actually in Maple Grove (corner of County Roads 101 and 47 – Hackamore) as well as their unabated expansion of Bonaire in Maple Grove as it pushes towards Lawndale.
Pulte has begun a project across from Wayzata High School and they have announced a new project in Plymouth west of Vicksburg and south of County Road 47. When I get the details of that project, I will post them. In addition, lots of earth is being moved around on the west side of Vicksburg about a 1/2 mile south of County Road 47.
I’ve also heard Lennar is planning on developing a parcel in Medina now where they will put in approximately 150 homes. It almost sounds like the good ole days are back! They aren’t really because if this were 2005-2007, the only homes going up would be priced between $750-$900k. Now they are building most of these homes between $400-$600k. Granted, the homes aren’t as nice, but they have figured out what the buying public is willing to purchase in the new environment.
FHA Loans Likely to Get More Expensive
June 13, 2010 By Leave a Comment
As someone who appreciates government officials looking out for the tax payer, it’s good to see that FHA is likely to be collecting one more point on each loan they give out to help cover the cost of the insurance. Since so many loans are blowing up on the FHA, it makes sense that they would do this. That said, this will continue to increase the cost of getting a loan which means a fewer buyers and of course fewer sales. See this Calculated Risk post for a quick synopsis.
The median home price in the Twin Cities is $168,000 according to the latest statistics from the Minneapolis Area Association of Realtors. This means on average, the costs to attain an FHA loan just went up about $1,600 if this bill passes.
There is no housing market without the FHA – not in the Twin Cities. If the FHA implodes we will see another down leg in home prices.
Edina, MN Median Home Prices Rise by 2.2% YTD May 2010
June 13, 2010 By Leave a Comment
Edina, MN is statistically showing signs of improvement in the housing market. While the average home price is down 8% so far YTD through May 2010, the median price for a home in Edina is up 2.2%. The average sold price in Edina is $398k with the median home price (sold) at $329k. Before you start feeling good about your Edina real estate, realize that both of these numbers used to consistently be $500k (give or take $25k from time to time). We are still a long ways down from the top. That said, it’s nice to see a little firming in the prices.