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.
Housing to Boost GDP, First Time in Years According to Fannie Mae
February 22, 2012 By Leave a Comment
Image by Getty Images via @daylife
Fannie Mae economists are out with their forecasts for 2012 and they expect the housing market to have a modest, positive impact in the overall GDP numbers in 2012. This is the first time in years that housing will be a net plus to the GDP rather than the net negative drain it as been for the past few years.
Fannie Mae says, “economic indicators suggest a pickup in construction of apartment buildings and a modest uptick in single-family construction. Still, there are challenges that could emerge derailing 2012 growth projections.”
Related articles
- FHFA pushes for privatization of Fannie Mae, Freddie Mac (agbeat.com)
- Gov’t seeks smaller role for Fannie, Freddie (seattletimes.nwsource.com)
- Fannie Mae Serious Delinquency rate declines, Freddie Mac rate increases (calculatedriskblog.com)
- HUD Secretary Donovan Calls On Fannie Mae And Freddie Mac To Do More For Troubled Homeowners (thinkprogress.org)
- Fannie Mae CEO steps down during troubled times (agbeat.com)
National Survey Reveals New Normal – Consumer Expectations on Homeownership
February 21, 2012 By Leave a Comment
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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Mortgage Backed Securities (MBS) Back in Vogue with Investors – New York Times
February 19, 2012 By Leave a Comment
Wall Street investors are betting that the worst is either behind us in the U.S. housing market or the downsize risk is at least accounted for and discounted with the cheap price of MBS today according to the New York Times.
If you recall Mortgage Backed Securities were all the rage in the investment community leading up to the housing crash. They were then shed like the plagued and the Federal Reserve has been one of the only significant buyers of MBS in the past couple of years. Now prices are up 15% and appear like they will continue to rise. I suspect they’ll continue to climb for the next couple of years as the housing market goes in to full recovery mode and the Federal Reserve can start to unload the approximate $1-$2 Trillion it holds in MBS.
The money interests are now betting that we’ve seen a turn in the housing market. Please don’t be confused with higher home prices. I think we’ll continue to see overall home price declines in 2012. It’s been my sense that we’ll start to see a consistent rise in home prices by the spring of 2013 but by then investments in housing will be significantly higher once the printed numbers show house price appreciation.
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Spring Meadows – Custom Homes in Northwest Plymouth – Photo Gallery
February 18, 2012 By Leave a Comment
The housing boom continues apace in northwest Plymouth, MN. Spring Meadows is a beautiful neighborhood located in the Wayzata School District. It’s just to the west of Vicksburg Lane south of County Road 47 and north of Schmidt Lake Road. The neighborhood is within 5 minutes of both Wayzata High School, Providence Academy and Heritage Christian Academy. Check out the photos of Spring Meadows that I took in mid February 2012 of the ongoing growth of this neighborhood.
If you’re interested in new construction in Plymouth, MN be sure to request the free report – Plymouth MN New Construction Report.
Spring Meadows Monument NW Plymouth MN
Minneapolis Area MLS Membership Drops from 21,000 to 13,000 During Housing Market Crash
February 15, 2012 By Leave a Comment
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
February 13, 2012 By Leave a Comment
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“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.”
Related articles
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14 Reasons Why Property Taxes Vary
February 11, 2012 By Leave a Comment
Perhaps the tax accessors and other government officials in Hennepin County and specifically Orono, MN are getting some flack over property values and the corresponding property taxes. The City of Orono has as the second link front and center on their home page, “14 Reasons Why Property Taxes Vary” by the Association of Minnesota Counties. It was originally produced in 2006 just as the housing market was peaking.
If you are thinking about challenging your present tax assessed value in 2012, you may want to take some time to read their document so that you will know what the arguments are to possibly keep your tax assessed value at its current number.
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- Your 2012 Proposed Property Tax Statements in Hennepin County (craigkamman.com)
Orono, MN Median Home Prices Decline From $800,000 to $525,000
February 9, 2012 By 3 Comments
Orono, MN Median home prices have fallen from approximately $800,000 in 2005 to $525,000 so far in 2012. Orono is home to many incredible homes and estates as you might imagine with a median home price of $800,000 at the peak. It has not been easy to sell homes lately in Orono.
Recently I was reviewing many different listings and it was incredible to see that many homes sold for 50-60% of their initial list price and that often took anywhere from 1-2 years to sell. Average market times to get a home under contract in Orono are about 275 right now.
(Click image to enlarge)
Chart: NorthstarMLS and 10K Research
During 2008, I recall the collapse in home prices. I could actually feel it on the street. Buyers were backing away and sellers started to drop their prices. Many did not move quickly enough with their price reductions and suffered even great losses because of their unwillingness to reduce quickly and significantly. I was trying to sell someone’s home in Orono during the drop and it was incredibly difficult. I was relieve of my duties as their Realtor and they hired a “superstar” Realtor who couldn’t get the job done and then they hired another big name Realtor who was also unable to get the job done…but price doesn’t matter, does it.
If you look closely at the chart above, the median home price for January 2012 is higher than January 2011. Perhaps that slight adjustment is the start of a true bottoming in home prices.
Related articles
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Is Zillow Continuing to Mislead Real Estate Consumers About What Homes Are For Sale?
February 6, 2012 By 7 Comments
Image via CrunchBase
There has been quite a bit of news lately about many real estate brokers discontinuing their relationship with third party aggregators on the web such as Trulia and Zillow…even REALTOR.com.
Here is a blatant example of why what you see on Zillow cannot and should not be trusted. This is a technology company that happens to play in the real estate space. Their business model is designed to get in between the REALTORS® and consumers. It’s not in their best interest apparently to make sure that the information they have on their web site is current and accurate.
Take a look at this listing on Zillow. A client of mine just sent it to me to check out. Zillow is showing that the home is still for sale (today’s date is February 6, 2012). However, I went in to our MLS to check the status and it turns out the home sold and closed on November 22, 2011. (Note the link will expire in 90 days). The listing broker was Independent Brokers Realty, LLC and the selling broker was RE/MAX Action West, Inc. It has actually been OFF THE MARKET SINCE OCTOBER 17, 2011. That’s 113 days that this home has been on the market FOR SALE on ZILLOW and yet the MLS in the Minneapolis area (NorthstarMLS) shows that the home went off the market on October 17, 2011.
I understand that many people don’t like REALTORS®. I get that, but you have to know that we at least have rules and regulations we are bound by and if we are found to be breaking them, we can be fined or even have our licenses removed. REALTORS® are obligated by the Code of Ethics to be truthful in our advertising and communications…and that of course includes the marketing of property and whether or not it is still available. Below is from Article 12 of the REALTOR Code of Ethics:
Article 12
Realtors® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. Realtors® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.
………………………
In marketing properties, Realtors® use advertising to inform the public about listings and to induce interest in them. Realtors® are obligated to present a “true picture” in their advertising and in all representations to the public. A “true picture” is truthful, accurate advertising, and nothing less.
Third party real estate web aggregator sites are not obligated the way that REALTORS® and brokers are. If you want a true and accurate picture of the local real estate market place and what’s for sale, then you really should be using a local broker’s site. In the Twin Cities, all the real estate brokerages agree to reciprocity which means that every other broker’s listings also show up on every other broker’s web site. You don’t have to go to 3 or 4 or 5 different web sites to see what’s for sale. You can pick whichever one you like the best and that will display what’s for sale. If you go to Zillow, Trulia and REALTOR.com then yes, you need to go to a variety of sites and even after you’ve done that, not only will you not have seen everything that is actually for sale in the Twin Cities market, but you will be mislead in to believing that certain properties are for sale.
Zillow is a public company worth $875 million as of today. Perhaps some enterprising reporter or even Wall Street analyst might ask the executives some questions about their business model. Is it their intention to purposely mislead real estate consumers in order that they can sell more advertising and lead generation programs? Someone please tell me how this is an ethical business model. And REALTORS® who are advertising on their site hoping to attract unsuspecting buyers with misinformation, is this really something we should be participating in? We are perpetuating the problem.
Related articles
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