Wednesday, March 21st, 2012

Wednesday, March 21st, 2012

Buyer activity: up. Seller activity: down. That could soon change if sellers begin to increase their activity levels entering the spring market. They’ve understandably been a tad shy lately, but the changing landscape is starting to register with well-informed homeowners looking to move. Buyers have shown that they refuse to let one of the most attractive purchase environments pass them by. As activity revs up this spring, not all segments will benefit equally. Which is exactly why the numbers are so central to assessing both the breadth and depth of market recovery.

In the Twin Cities region, for the week ending March 10:

  • New Listings decreased 0.3% to 1,450
  • Pending Sales increased 20.9% to 995
  • Inventory decreased 24.3% to 17,899

For the month of February:

  • Median Sales Price decreased 1.4% to $138,500
  • Days on Market decreased 9.1% to 145
  • Percent of Original List Price Received increased 2.6% to 90.6%
  • Months Supply of Inventory decreased 35.8% to 4.7

Click here for the full Weekly Market Activity Report.

From The Skinny.

Posted in The Skinny |
Monday, March 12th, 2012

The last six years or so have been tough on home prices, and even the most optimistic prognosticators say it will take another six years for median sales prices to approach the halcyon days of assured annual value increases for home sellers. Generations of stable home price increases gave way to a boom-and-bust cycle that would have made the Pets.com sock puppet blush. As we enter what should be an active spring market, our communities would do well to focus effort toward creating healthy, happy homes. With those in place, prices will rise again.

In the Twin Cities region, for the week ending March 3:

  • New Listings decreased 23.2% to 1,402
  • Pending Sales increased 29.7% to 940
  • Inventory decreased 22.9% to 17,818

For the month of February:

  • Median Sales Price decreased 1.1% to $138,500
  • Days on Market decreased 9.0% to 145
  • Percent of Original List Price Received increased 2.6% to 90.6%
  • Months Supply of Inventory decreased 36.5% to 4.6

Click here for the full Weekly Market Activity Report.

From The Skinny.

Posted in The Skinny |
Thursday, March 1st, 2012

 

By Brian O’Connell

NEW YORK (MainStreet) – Growing signs of improvement in the housing market could draw more buyers in the coming months, and although the rules of the game haven’t changed much, the big question for anyone returning to the housing market – or getting into it for the first time – is what are the long-term lessons to be learned from the recent housing downturn?

In fact, all the key lessons are things buyers and borrowers should have known before the housing crash – the crash just underscored how important they were. Even if the market does improve this year, as many experts predict, it’s not likely to strengthen fast enough to offset the damage homeowners do when they make basic mistakes.

Lesson 1: Buy the cheapest home that will serve your needs for the next seven to 10 years. As we’ve seen, home prices can and do fall from time to time. That may be rare on a nationwide basis, but it happens quite often in individual markets. The more expensive your home is, the more you will lose if the market turns south.

Also, the recent downturn highlights a fact well known among experts but resisted by many homeowners: Homes are not always a very good investment. Even when there is not a downturn, in the average year home appreciation barely beats inflation, and mortgage interest, insurance, taxes, maintenance and other costs can turn a home into a money loser. It can be much more profitable to own a modest home and invest the savings in something more promising.

Lesson 2: Plan to stay put for a good, long while. Traditionally, experts assumed that the average homeowner could break even in four or five years. During that time a home could be expected to gain enough value to offset the various costs of buying and selling, making owning better than renting. But price gains could be small and intermittent during the next few years, pushing the breakeven period to seven, eight, even 10 years.

Lesson 3: Stick with a simple mortgage, like the standard 30-year fixed-rate loan. This is kind of a no-brainer right now, as lenders aren’t offering the exotic types of loans that got people into trouble in the mid-2000s – things like subprime, interest-only and pay-what-you-want loans. But as conditions improve, lenders could again offer unique products that could backfire.

Borrowers who can stomach some risk and don’t expect to keep their loans for decades might take a look at straightforward adjustable-rate loans, like five- and seven-year ARMs that don’t start rate adjustments until the initial period is over. But to make any ARM an acceptable risk, you must be certain you can afford the largest payment it could possibly require.

Lesson 4: Spruce up your credit rating. While this has always been a good practice, it is especially so now that lenders are so jittery. The borrower with a top-notch rating is likely to get a much lower mortgage rate than someone with a so-so rating.

Lesson 5: Don’t go overboard on home improvements. For many years, studies have shown that major improvements like new kitchens and bathrooms do not add as much value to a home as they cost. Improvements are lifestyle expenditures, not investments.

 

Thursday, March 1st, 2012

 

By The Associated Press

WASHINGTON — The housing market is flashing signs of health ahead of the spring buying season.

Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

Sales have now risen nearly 13 percent over the past six months. While they are still well below the 6 million that economists equate with a healthy market, the gains have coincided with other changes in the market that suggest more sales are coming.

“The trend is clearly upward,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

 

The National Association of Realtors said Wednesday that re-sales increased 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million.

Single-family home sales rose 3.8 percent. And the number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That’s still below 40 percent, which tends to signal a healthy market.

One concern is that the market is still saturated with homes at risk of foreclosure, which can lower home prices generally. Those increased to make up 35 percent of sales.

But the supply of homes on the market has plunged to 2.3 million, the lowest level since March 2005. At last month’s sales pace, it would take more than six months to clear those homes, consistent with a healthy housing market. Fewer homes on the market could help boost prices over time.

Most economists said the January report was encouraging, especially when viewed with other recent positive housing data.

Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year — and they responded in January to that interest by requesting more permits to construct single-family homes.
“The rise in existing home sales in recent months adds to the indication from housing starts, building permits, and homebuilder sentiment that the sector has improved modestly since the middle of 2011,” said John Ryding, an economist at RDQ economics.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound. In January, employers added 243,000 net jobs — the most in nine months — and the unemployment rate fell to 8.3 percent, the lowest level in nearly three years.

Analysts caution that the damage from the housing bust is deep and the industry is years away from fully recovering. Since the bubble burst, sales have slumped under the weight of foreclosures, tighter credit and falling prices.

Many deals are also collapsing before they close. One-third of Realtors say that they’ve had at least one contract scuttled over the past four months. That’s up from 18 percent in September.

Realtors say deals are collapsing for several reasons: Banks have declined mortgage applications. Home inspectors have found problems. Appraisals have come in lower than the bid. Or a buyer suffered a financial setback before the closing.

Sales rose across the country in January. They rose on a seasonal basis by nearly 9 percent in the West, 3.5 percent in the South, 3.4 percent in the Northeast and 1 percent in the Midwest.

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