In another sign that the six-year long housing slump could be coming to an end, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) reached 28. To put that in perspective, it went from above 70 in 2005 to below 10 in 2009. The HMI has not seen 28 since June 2007. This and other landmark data points are coalescing to signal calmer waters ahead. That's not to say you should expect double-digit annualized appreciation, but both buyers and sellers are displaying the sort of confidence that is fluttering through the rest of the economy.
In the Twin Cities region, for the week ending March 17:
New Listings decreased 1.3% to 1,406
Pending Sales increased 23.1% to 1,029
Inventory decreased 27.5% to 17,088
For the month of February:
Median Sales Price decreased 1.4% to $138,000
Days on Market decreased 9.0% to 145
Percent of Original List Price Received increased 2.5% to 90.6%
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%
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%
The National Association of Homebuilders index recently rose to levels not seen since 2007. Historically, it's been a great leading indicator of housing starts. We lead with this information because it is just the latest in a series of testimonials toward a market with some wind in its sails. In as few as four months, the residential real estate scene could look quite different than it has in recent years. That's not to say that we're wave riding our way to a national housing boom, but market fundamentals could be steering the rudder in the direction of calmer waters. For sellers eager to get out but unwilling to take capital losses, that's more relieving than the usual threat of hull breach.
In the Twin Cities region, for the week ending February 11:
New Listings decreased 0.4% to 1,313
Pending Sales increased 28.9% to 928
Inventory decreased 23.5% to 17,690
For the month of January:
Median Sales Price decreased 3.4% to $140,000
Days on Market decreased 8.5% to 142
Percent of Original List Price Received increased 3.4% to 91.2%
It was a week full of intrigue if ever there was one. A positive jobs report gave way to bullish activity on Wall Street backed by heroics from the hometown team, as the Giants showcased their Manning(ham) magic. Meanwhile, dozens of state attorneys general brokered a deal that will likely include principal write-downs. In local housing news, buyers made more purchases while sellers listed fewer properties than during the same week in 2011. Other indicators have recently showcased key improvements elsewhere in the marketplace. The most notable trend is fewer active listings. Buyers in wait-and-see mode may find themselves with more competition for fewer properties come spring.
In the Twin Cities region, for the week ending February 4:
New Listings decreased 6.7% to 1,236
Pending Sales increased 35.8% to 888
Inventory decreased 23.2% to 17,697
For the month of January:
Median Sales Price decreased 3.4% to $140,000
Days on Market decreased 8.4% to 142
Percent of Original List Price Received increased 3.4% to 91.2%
There were 3,149 purchase agreements signed in the 13-county Twin Cities metropolitan area during January, a 25.5 percent increase over last January. No doubt driven by a mix of record-low mortgage rates, affordable prices, strong negotiating leverage and unseasonably warm weather, that’s the highest January pending sales figure since 2005.
Sellers were less active, as new listings fell 9.0 percent from January 2011 to 5,112 properties. The number of homes for sale continued to drop, as well, down 28.1 percent from last year to 16,463 active listings – the lowest inventory reading for any month since 2003. Another important housing metric, months supply of inventory, remained at a six-year low of 4.6 months.
“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.”
Traditional sales surged 28.7 percent, while foreclosure sales fell 2.9 percent and short sales increased 16.8 percent. For sellers, the landscape is shifting. For six consecutive months, sellers received progressively more of their asking price than they did the year prior. In January, sellers received an average of 91.2 percent of their original list price.
Sellers are also watching market times closely. The average number of days a listing spends on the market before closing was down 8.3 percent to 142 days—the fourth consecutive year-over-year decrease. But those looking to sell their properties should be aware of distressed market activity.
In January, 43.2 percent of all new listings were either foreclosure or short sales. Together these lender-mediated properties made up 55.3 percent of all closings. Homes in financial distress are exiting the marketplace faster than they are entering it, but they have still managed to prevent market-wide price appreciation. The median sales price was down a modest 3.4 percent from January 2011 to $140,000, marking the smallest decline since November 2010.
“Price declines are subsiding, partly thanks to changes on the supply-side of the equation. Rising home prices will still be the final phase of recovery,” said Andy Fazendin, MAAR President-Elect. “We firmly believe that what we’re seeing now is setting the stage for better times ahead.”
Monday February 6th, 2012
Weekly Market Report
Whether motivated by the election cycle, a jump in employment, improving housing market metrics or the best start to a year for the S&P 500 since 1989, home buyers posted increased activity levels compared to last year. Consumers signed more purchase agreements but sellers entered into fewer listing contracts. Changes in supply-side metrics confirm this, suggesting that relatively less new product is entering the market compared to buyer demand. That's helped other metrics return to more friendly territory. Whatever the reason, it's good to see that vote of confidence.
In the Twin Cities region, for the week ending January 28:
New Listings decreased 17.5% to 1,090
Pending Sales increased 22.9% to 833
Inventory decreased 23.5% to 17,762
For the month of December:
Median Sales Price decreased 6.5% to $145,000
Days on Market decreased 2.1% to 141
Percent of Original List Price Received increased 1.7% to 90.6%
As the first month of the year trots onward, so do home buyers. They posted increased activity levels compared to the same week in 2011. Seller activity slowed compared to last year, however. Inventory declines effectively positioned many local markets into a more balanced state – particularly toward the end of last year. Increased seller activity in the coming months could slow or even reverse that trend. Don't fret. Not only is an increase in new listings perfectly normal for this time of year, but improved absorption rates and seller concessions could begin to stew into seller confidence.
In the Twin Cities region, for the week ending January 21:
New Listings decreased 8.2% to 1,092
Pending Sales increased 29.0% to 730
Inventory decreased 23.2% to 17,822
For the month of December:
Median Sales Price decreased 6.5% to $145,000
Days on Market decreased 2.1% to 141
Percent of Original List Price Received increased 1.7% to 90.6%
