As the mercury inches downward outside, grab your favorite hot beverage and let’s review the buyers and sellers weekly dance card. Bear in mind that current activity may look especially slow compared to last year’s tax-credit-induced performance.
For the week ending October 9, sellers continued to pick up their tempo by introducing 1,479 new listings to the marketplace. That’s only 4.1 percent fewer new homes than last year at this time, as the year-over-year comparison gap continues to narrow. Buyers danced to a slower beat. The 523 pending sales for the week were 44.8 percent fewer than last year. That’s the largest decline in 13 weeks.
With seller activity slowly returning and buyer activity remaining sluggish, inventory levels are still high. There were 26,866 active listings as of October 18. Keep a close watch on this metric, as it emphasizes the dynamic balance between supply and demand—the most critical forces affecting the market.
There is some good news in the mix. At 220, housing affordability is at an all-time high. The availability of low cost homes combined with low interest rates have created an extraordinary buying opportunity.
Orginal Story:Weekly Market Report 10.18.2010
With the current round of figures, be mindful of the fact that we’re entering a period of apples-to-oranges comparisons. Market activity was comparatively strong last year due to the approaching deadline for the 2009 tax credit. Combine that with a slowing sales season and buyers driven to enter contracts by April 30, 2010, and it becomes apparent that September 2010′s numbers should be taken with a grain of proverbial salt.
“We won’t have apples-to-apples comparisons again until summer of 2011,” said Brad Fisher, President of the Minneapolis Area Association of REALTORS®. “The housing market is still moving sluggishly as we continue to wait for recovery beyond the buyer tax credit.”
Pending sales in the 13-county Twin Cities metro area were down 37.8 percent compared to last September, and closed sales were down 33.5 percent. The decreases are not so drastic when looking at year-to-date 2010 versus 2008, which shows just a 1.4 percent decline in closed sales.
Inventory grew to 28,129, an increase of 13.9 percent. While the first seven months of 2010 enjoyed year-over-year price gains, the $166,000 median sales price was a 2.4 percent decrease from last year and the second consecutive month of price declines.
All market segments showed a decrease in pending sales activity—40.1 percent for traditional sellers, 24.9 percent for foreclosures and 12.0 percent for short sales.
Listing activity declined 10.7 percent for the entire market since September 2009. Traditional sellers put 11.2 percent fewer homes on the market, banks put 5.8 percent more foreclosures on the market and there were 11.5 percent fewer short sales added to the market.
There are 8.6 months of inventory for the entire Twin Cities market—up 30.3 percent from the 6.6 months of supply last year at this time. Negotiations also slid back toward buyers for the third consecutive month. The percent of original list price received at sale declined 3.2 percent to 90.9 percent. The last time this metric was this low was April of 2009.
The Housing Affordability Index has soared to 220, which means the median family income is 220 percent of the income needed to qualify for the median priced home using a 20 percent down, 30-year fixed mortgage. That is the highest level it has been since we started recording it in 2001. Hey, look at that, there are nuggets of good news out there.
Orginal Story:Local Housing Market Still Moving at Sluggish Pace
In the Twin Cities metropolitan area, the frost that some of us found on our lawns also kept the housing market in a sort of frozen state. For the week ending September 25, sellers placed 1,382 new homes on the market, which was 19.9 percent fewer than last year at this time. Over the past three months, listing activity has been an average of 9.2 percent under last year’s levels.
Buyer activity produced 41.7 percent fewer purchase agreements than last year at this time. There were 616 contracts signed, and as the graph on page 3 illustrates, Pending Sales are still mimicking last year’s activity, except with roughly 400 fewer sales. For the three-month average, the decline rests at 39.0 percent below 2009 levels.
Be aware that we’re in an apples-to-oranges comparison period since the tax credit was in force last year at this time. Year-over-year comparisons may appear artificially low due to a market incentive that no longer exists.
Inventory levels are a crucial metric to watch, as they tell the story of whether listings overwhelm the market during times of slow purchase demand. As of October 4, there were 26,915 active listings on the market, 9.8 percent more than the same week in 2009.
Orginal Story:Weekly Market Report 10.04.2010
As the waters of several Minnesota rivers swell, so too does the inventory of Twin Cities residential homes on the market. For the 17th consecutive week, the number of active listings for sale was greater than the same week in the year prior. For the week ending September 18, the 27,408 homes on the market made for a 9.5 percent increase over last year at this time.
Sellers are off the hook; it isn’t listing activity that’s causing thisthis–instead, it’s the slowed purchase activity. The 596 purchase agreements were 42.9 percent slimmer than last year’s 1,043 contracts signed during the same week. We knew this year would be front-loaded with activity, but we didn’t know by how much. Calling it substantial would be an understatement.
The 1,638 properties that came on to the market were only 11.3 percent lighter than last year. As mortgage rates continue to hang tight at historic lows, it would appear that folks are simply staying put and allowing both economic uncertainty and turgid rivers to subside.
Orginal Story:Weekly Market Report 9.27.2010
The Twin Cities housing market continued to shuffle along in August much the way it did in July. As a result of buyer demand being displaced by the federal tax credit-which ended April 30 and moved the traditional Minnesota summer selling season to spring-sales activity fell sharply in August which caused inventory to grow. Predictably, this placed downward pressure on prices. Good news for buyers; more challenges for sellers.
Pending sales in August were down 30.7 percent compared to last year, which is the smallest decline in three months. Due to weakened buyer demand, inventory grew to 27,638 active listings, an increase of 8.8 percent over last year. That’s the largest inventory spike since February 2008 and the third consecutive month of progressively increasing year-over-year inventory growth. After seven consecutive months of year-over-year price gains, the $172,165 median sales price was a 1.6 percent decrease from last year. Prices simply had to respond to suppressed demand and growing inventory.
Digging deeper, traditional sellers (nonforeclosure and non-short sale) saw a 9.2 percent price increase to $227,000, foreclosure prices dropped 2.5 percent to $115,000 and short sales increased 2.5 percent to $145,000.
The traditional and foreclosure market segments had a significant decline in pending sales activity-32.1 percent and 23.9 percent, respectively-while short sales posted a minor 5.1 percent decrease.
There were 3,394 signed purchase agreements in August, a decrease of 1,503 contracts from last August. Seller activity also slowed, with 6,810 new properties coming onto the market. By year-to-date (YTD) figures, pending sales decreased 15.6 percent from last year. New listings posted a 0.2 percent YTD decrease compared to last year.
Foreclosure inventory swelled 20.1 percent, while traditional inventory only grew 3.2 percent. For the second month in a row, negotiations moved back toward the buyer as sellers received an average of 91.1 percent of their original list price at sale-a 3.2 percent drop from last year at this time.