The existing home sales report just came out from the National Association of Realtors for January 2012. It shows that homes sales continue to pick up and the supply of homes for sale continues to decline.
National Survey Reveals New Normal – Consumer Expectations on Homeownership
This is an excellent detailed analysis of the state of the housing consumer when it comes to real estate and homeownership issues. For those who like to study this kind of material, this is well worth your read. For those of you who are investors, or thinking about becoming an investor, it certainly appears that there will be plenty of supply of tenants for the foreseeable future. It’s been my belief since we housing crash which began in 2007 and then soon followed by the financial crash in 2008 that those events were so massive that they may have permanently changed the psyche of the country when it comes to home ownership. That said, do I think we are headed to a 50% ownership society and 50% rentals? No. But we won’t ever see the 70% ownership numbers again in my lifetime and I would expect we’ll just continue to drift closer to 60/40. While those numbers don’t look huge, they are indeed transformational for the industry, American society and culture.
Big Builder is the industry news source for large national home builders. The study is called, “Housing 360: Insights into Homeownership” where they surveyed 3,000 people and conducted six focus groups. They need to stay on top of the multi-billion dollar new home business and it’s very interesting to read their analysis and insight regarding today’s home consumer and what they are thinking. Apparently many are in the same boat as one gentleman was quoted as saying, “If I could get a full-time job with a decent salary, I’d buy a house.”
Some key highlights of the Housing 360 report:
- 7 out of 10 think now is a good time to buy a home
- Many who bought homes during the boom wish they hadn’t – (perhaps a little buyer’s remorse?)
- 25% of survey respondents are underwater on their homes
- 72% still believe it’s important to own their own home
- 67% say that their current home is fine – general across the board apathy among potential home buyers
- 47% are concerned that if they did sell in order to go buy a new home, would they get a fair price for their current home?
- Of those surveyed who are renters, only 25% said their current home is fine, however, 45% of the renters said there is no urgency to move
- Concerns are high about down payment expectations and whether or not they will even qualify for a mortgage
This is by far the most informative article I have read about the current state of potential home buyers and sellers. The National Association of REALTORS publishes a report each year, but all too often that just seems to come off as too self serving. This, on the other hand, is very insightful. I highly recommend you read the article and for those who want the actual research report, please see Hanley Wood Housing 360: Insights into Homeownership.
On a more local note, while this report details what the home builders must do to attract new construction home buyers, clearly the home builders operating in Plymouth, Maple Grove, and Medina Minnesota are doing an outstanding job given the recent explosion in construction and sales activity. To stay on top of what’s happening locally in the northwestern suburbs of Minneapolis, be sure to check out Northwest Plymouth where I continue to chronicle the rebirth of the Twin Cities home construction market.
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Minneapolis Area MLS Membership Drops from 21,000 to 13,000 During Housing Market Crash
Just a quick note to say I heard this in a training session the other day. Unfortunately, no one publishes accurate details as to exactly how many real estate agents are out there in the Twin Cities marketplace. There are more real estate sales people who are licensed but they are not REALTORS. To be a REALTOR, you must join one of the boards and pay your MLS dues. It appears that as the housing market crashed, those willing to pay their dues membership to be REALTORS with access to the MLS crashed as well.
January 2012 Pending Home Sales Highest Since 2005
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- Twin Cities Weekly Real Estate Market Update, week ending January 28 2012 (craigkamman.com)
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Minneapolis Posts 5% Year over Year Decline in Home Prices – Case-Shiller Index Through November 2011
This past week the monthly Case-Shiller Home Price Index was released and the headlines are negative. 19 of the 20 metropolitan areas studied continued to decline through the month of November. Minneapolis has shown signs of improvement as I have expected for the past few months. While the price declines continue – down 5% year over year through November 2011, this pace of the declines have been slowing markedly since early in 2011 when we were posting 10-11% year over year declines.
It remains my expectation that in the Minneapolis area the Case-Shiller Index will start to show price increases for the Minneapolis area. At this pace, that might not occur until we see the data from the second half of 2012.
Below is a table with all the cities studied in the Case-Shiller Index.
(Click on images to enlarge)
Table: S&P Indices: Case-Shiller
Chart: Calculated Risk Blog
The Case-Shiller Index used to get a lot of attention but I’m getting the sense the public is a little weary of more bad housing news. Perhaps everyone is finally desensitized to the news. I also think that these reports have been bad for years so people just come to expect it. It will be interesting to keep an eye on this to see if it does finally turn within the next 12-24 months.
Related articles
- Case Shiller Index: Minneapolis / St Paul vs. Composite 20 – Jan 31st 2012 (craigkamman.com)
- Case-Shiller: Home Prices Drop by 3.4% Year over Year – Minneapolis Down 8.4% (johnmurphyreports.com)
- Case-Shiller Index: Minneapolis Housing Market Improves – Home Prices Declined by 7.4% Year Over Year (johnmurphyreports.com)
- Case-Shiller Index Says Detroit And Washington DC Lead The Market (clewismortgage.wordpress.com)
RE/MAX Results Continues on the Acquisition Trail Buying Rochester and Austin MN Franchises
RE/MAX Results just announced that it has purchased the RE/MAX franchises in Rochester, MN as well as Austin, MN. Brenda Tushaus has a few more details on her blog post. It appears RE/MAX Results wants to go toe to toe with Edina Realty in terms of marketshare across the state.
Are Third Party Real Estate Aggregator Sites Using Black Hat SEO Tactics to Block Real Estate Brokers?
Anyone who pays attention to internet marketing and specifically SEO (search engine optimization) strategies knows that black hat tactics are frowned upon in the business. The big battle in real estate right now has to do with the web. Over the past 5-6 years, the rise of third party real estate aggregators has been the cause of concern for real estate brokers. The risk has been that the third party aggregators would disintermediate the brokers and real estate agents by being the first point of contact for real estate consumers on the web.
Real estate brokers lost control of their listings many years ago. I think they were fooled by the allure of the web and getting additional exposure for their listings. They gave the listing information away for free in hopes of more eyeballs seeing their listings. Many did not realize they were giving away the store when they did that. More recently, real estate brokerages are fighting back and no longer allowing their listings to go to many of these third party aggregators such as Zillow, Trulia, and REALTOR.com.
Now these third party aggregators are being accused of using black hat SEO tactics to cut off links that go back to the original brokers site. If this is true, that’s quite a stunt these sites have pulled off. Let me get this straight, real estate brokers send their information to these third party sites for free, the third party sites use the listing data to generate tens of millions of dollars in advertising revenue, banner sponsorship sales, and then possibly lead referrals, and they are inserting “no follow” on the links back to the original brokers? If that is true, why are we doing business with these firms?
Check out the story from AGBeat on what the CEO of VHT is accusing the third party aggregators of when it comes to black hat SEO for real estate.
If you are a real estate agent or broker reading this, I recommend that you share this post with others in the business so that they can understand the ongoing challenges the real estate industry faces with these third party aggregators. In case you missed my last post, you’ll want to read about ARG Abbott Realty in San Diego pulling their listings.
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REALTORS Confidence Improves
The National Association of REALTORS published its latest findings on how REALTORS are feeling about sales activity and there is a noticeable improvement in the findings. Part of this might be due to seasonal issues but the could be discounted a bit because we are still in the depths of winter. It does seem like things are starting to pick up in many segments.
Chart: HousingWire
Related articles
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- Realtors drive 3.6 billion miles a year (lansner.ocregister.com)
Plymouth and Maple Grove Townhome Associations Reject Investors and Renters
I was showing townhomes today to some investors who would of course turn them in to nice rental units. However, we are increasingly running in to associations that have newly created restrictions against investors. Typically the way it works now is that they require a new owner to live in the unit for 2 years before turning it in to a rental unit. Apparently the thinking is that accidental landlords will become better landlords and have better renters than professional investors. Perhaps they are right.
The boards believe they are better off with owner occupied units no matter what the price. It’s a difficult decision because it’s likely that prices will continue to slide for these big townhome complexes as they seek owner occupants. There are plenty of investors ready to purchase but can’t because of the restriction.
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- Top Residential Transactions Plymouth MN – Finance and Commerce (johnmurphyreports.com)

“If you look deeper into the strong sales figures, you can see which segments are leading the charge,” said Cari Linn, President of the Minneapolis Area Association of REALTORS®. “With inventory down, especially among foreclosures, and good purchase demand, buyers are finally looking harder at traditional properties.”







