The Minneapolis Area Association of Realtors just published data showing the lowest level of foreclosures and short sales in the Twin Cities since 2007. This is certainly good news for home sellers as the pricing pressure has been relieved. In some ways it’s good for buyers too although they will be paying higher prices. Why might it be good for buyers? While buyers might always be worried about losing money, with an improving marketing and lower inventory of short sales and foreclosures, that worry is not as big as it once was not that many years ago.
Where are home prices headed? Fiserv Case-Shiller has come out with a housing market forecast for the next two year for 20 major metropolitan areas in the U.S. The forecast period is for March 2011-March 2012 and then March 2011 – March 2013. Some markets are still expecting big drops in home prices such as Miami, but other are forecasted to see significant price appreciation including San Francisco +8.7%, Las Vegas +8.10% and Portland +8.8%.
Locally, the Minneapolis market is forecasted to remain flat with a -.7% price depreciation.Home prices in 20 major cities. Some cities are expected to bounce back faster than others. Here’s how home prices are faring in some of the nation’s major markets — and where Fiserve Case-Shiller expects them to head in the upcoming year.
Table below is from CNN Money. The source for the data is Fiserv Case-Shiller.
|City ▾||Prices March, 2011 – March, 2012||Forecast March, 2012 – March, 2014|
|Index of 20 cities||-0.80%||1.70%|
No doubt this was a phenomenal Parade of Homes for the Twin Cities new construction market. According to the Builder Association of the Twin Cities, this was the best Parade since 2007. It probably helps that the number of builders who were presenting their homes is down substantially since 2007, but the foot traffic really was excellent and the sales were well beyond expectations. I recall at the top of the housing market that there were 1,100 to 1,200 homes that were being shown in the Parade of Homes. If I’m not mistaken, I think this year the number was less than 400. Those who have stuck it out are doing well!
The latest Case-Shiller Home Price Index was released today and it seems to be a bit of a mixed bag of results for many cities. However, in Minneapolis, home prices declined by 1.8% year over year. Data was reported for the month of January 2012. I have been saying for some time that as we started to move in to 2012 that the Minneapolis area would start to print much better numbers in the Case-Shiller Index. It wasn’t that long ago and we were leading the nation for several months with the largest percentage of year over year declines. That now appears to be behind us.
Overall for the 10 and 20 city composites, home prices declined year over year by 3.9% and 3.8% respectively. Most housing analysts and the economists I read have generally been predicting that we’d see about another 5-6% decline in home prices this year. Based upon activity I’m seeing in some markets, we may do better than that.
Atlanta now has the distinct honor of being the worst performing market in the county with home prices down by 14.8% year over year according to this report.
Detroit gets the honor of being the best performing market with home prices up…yes, up, 1.7% year over year. I know that doesn’t sound like a lot, but that’s great news for the Detroit area which has extremely difficult the past several years.
Below is a table showing the scores for the 20 cities studied by the Case-Shiller Index.
(Click on Image to Enlarge)
- Case Shiller: House Prices fall to new post-bubble lows in January (calculatedriskblog.com)
- Case-Shiller Index: Minneapolis Home Prices Decline by 4.9% Year over Year through December 2011 (johnmurphyreports.com)
- Case Shiller Index Minneapolis / St Paul – for data ending Dec 31 2012 (craigkamman.com)
- UNEXPECTEDLY: Case-Shiller home price index falls. “Home prices in the U.S. fell for the fifth mon… (pjmedia.com)
Screen Porch Conversion and Lower Level Expansion – Gorgeous Hearth Room Highlighted by the Old World Charm of Reclaimed Wood Beams
A friend and business partner of mine recently completed a fabulous project where he took an existing screen porch and converted it to living space and extended the lower level right underneath the porch to accommodate for a much improved exercise room.
The story below is written in first person by Nate Jurmu, who is the owner and builder for Meadow Creek Building Corp.
This project was exciting because we were able to take an existing screened porch, and convert it to a spectacular hearth room with vaulted ceiling accented with beautiful reclaimed wood beams from Big Wood Timber Frames and capped off with a stunning Town & Country fireplace. While the room is brand new, the timelessness of the reclaimed wood beams adds old world charm and really makes the room interesting and come to life! It’s memorable once you’ve been there.
This project was an excellent example of working in collaboration with a client and architect. Murphy & Co. Design of Buffalo, MN developed the architectural plans for this remodeling project.
At the start of the project, we installed in a new foundation for the area where we expanded the exercise room in the lower level. Also, since this was a substantial expansion of the square footage of the home, we had to think about the heating and cooling components for the newly created space. My clients already had a geothermal system in their home. We were able to expand it in to the new exercise room as well as the upstairs space that was once a screened porch – radiant floor heat not only in the exercise room but also the wood floor in the hearth room!
The audio and video components for the hearth room were incorporated into the cabinetry in the exercise room underneath, eliminating any cabinetry by the fireplace.
For some additional accents to the exterior, my clients had a hot tub outside on a patio and we rebuilt the deck and added a pergola that extends over the hot tub. The outside fireplace was already existing.
Customers wonder how we are able to match up siding and roofing material without having to redo all the of the siding or put on a new roof. Usually we are able to get very close in matching up colors and materials so that it’s not noticeable. Once in a while there may be just too much fading in the existing siding or shingles to make a great match, but those are issues we can discuss to come up with a reasonable solution that works for you.
We can accommodate any size project – no project is too big or too small for us to consider. If you have some ideas on remodeling existing space, adding on or building new, please don’t hesitate to give us a call and we can arrange a free consultation.
To request more information about remodeling projects, please feel out the form below.
While the headline number does not appear great being that the Minneapolis area again printed a negative home price average in the latest Case-Shiller Index, this is showing signs of continual monthly improvement over the past 6-8 months. If you are a regular reader, then you know that for a while in 2011, Minneapolis was consistently one of the worst performing markets in the country as we were down 9-12% year over year. However, those kinds of year over year negative prints are likely history.
Case-Shiller published its latest findings today on home prices. Across America, home prices overall declined again by about 4% year over year. The data was published for the month of December. Minneapolis continues to perform slightly worse than the overall indices.
Below are some charts to provide a visual to the data released today. All the charts are from S&P/Case-Shiller and McGraw-Hill Financial.
(Click on chart to enlarge the image)
For additional commentary on the latest Case-Shiller Home Price Index you may want to read the post at Calculated Risk.
- Case Shiller: What Housing Bottom? (ritholtz.com)
- Local Home Prices Outpaced by Inflation since 2000 (seattlebubble.com)
- Home prices fell in December in most US cities (tarpon.wordpress.com)
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.
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:
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.
- Has Edina Realty Just Declared War on Real Estate Web Site Aggregators – Trulia and Realtor.com? (johnmurphyreports.com)
- ARG Abbott Realty Group Pulls Listings from Real Estate Syndicators – Hammers Zillow, Trulia and REALTOR.com (johnmurphyreports.com)
- Edina Realty discontinues 3rd Party Sites like Trulia and Realtor.com (craigkamman.com)
- Are Third Party Real Estate Aggregator Sites Using Black Hat SEO Tactics to Block Real Estate Brokers? (johnmurphyreports.com)
- Junky Real Estate Listing Data and Listing Aggregators (azgolfandhome.wordpress.com)
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.
- 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)
Another month has come and gone and the news remains about the same…home prices continue to decline on a year over year basis as the Case-Shiller 10 City and 20 City composites showed declines of 3.1% and 3.4% respectively year over year through October. Minneapolis continues to print an ugly number down 8.4% year over year. The good news, in my opinion only, is given the rather significant decline we’ve seen in Minneapolis over the past year in this index, by the spring and summer of 2012, we should start to see some more positive growth numbers.
The graphs below are from S&P/Case-Shiller release that was published on Tuesday this week.
Year over year home price percentage increase or decrease graphed by month.
(Click on images to enlarge)
Case-Shiller home price index by year:
20-City Composite broken down by individual cities. Atlanta and Las Vegas lead the declines with Minneapolis coming in a close third place.
Despite the continuing negative news on home prices there are signs that the Minneapolis area is turning the corner. We continue to see very strong pending home sales activity, up 10%. New construction, while way down, is also improving and the number of homes for sale is now at a multi-year low with housing inventory down over 25%. View the latest Housing Supply Overview report from the Minneapolis Association of Realtors.
- Survey: Mpls home prices among nation’s biggest monthly declines (ctebockhorst.wordpress.com)
- A Look at Case-Shiller by Metro Area (blogs.wsj.com)
- Case Shiller Index, Minneapolis / St Paul market overcorrecting? (craigkamman.com)