Q2 2009 Update to "Foreclosures and Short Sales" report released by MAAR

Lender-mediated supply of homes continues to drop
Q2 2009 Update to "Foreclosures and Short Sales" report released by MAAR

Minneapolis, Minnesota (July 21, 2009) – The inventory of available foreclosures and short sales continued to shrink in the second quarter of 2009, according to a new research report released by the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc (RMLS).

After reaching a historic peak in February, the number of foreclosures and short sales available for sale has fallen by more than 2,100 units to 6,685 at the start of July—the fewest available since March 2008.

"We're not through the woods yet, but it's a positive sign that so much of this inventory is being absorbed by buyers," said Steve Havig, 2009 President of the Minneapolis Area Association of REALTORS®.

With the $8,000 federal tax credit for first-time home buyers and low mortgage rates sparking buyer interest, expect the supply of available homes to continue to fall through the remainder of the year.

New analysis of RMLS data indicates that the supply of bank-owned foreclosures (excluding short sales) is much smaller. There were 1.84 bank-owned foreclosure homes available for each buyer in June—compared to 5.10 homes owned by a traditional seller and 10.22 homes in a short sale situation.

In sum, the supply of bank-owned foreclosures is dwindling quickly, while short sales aren't being absorbed as quickly.

To see how foreclosures and short sales are affecting various neighborhoods and cities, visit our interactive data board with in-depth neighborhood reports and commentary at www.mplsrealtor.com/downloads/market/Lender-Mediated/Main.htm.

The full report can be found on the Minneapolis Area Association of REALTORS® website at www.mplsrealtor.com, and includes more analysis and an explanation of the research methodology.

Weekly Twin Cities Market Report

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"You don't know what you've got 'til it's gone." – Cinderella, 1980s power-balladeers

This week's quote-of-note applies to the current situation of available inventory in the Twin Cities housing market. Our disappearing supply—down 21.4 percent from this time last year—is being caused by absorption from strong pending sales activity (up 18.2 percent year-over-year for the week ending July 18) and weak new listings (down 12.1 percent for the same time period comparison).

With a consistently shrinking inventory and more buyers this summer than we've seen since 2005, buyers who lack urgency could find themselves singing along to that sad classic Cinderella song.

5 Tips For Happier Home Buying - from Citi

Even in a buyer’s market, buying a home can be as challenging as it is exciting. Here are 5 ways to make the process easier and faster, from getting the best deal on a mortgage, to finding the right home for you.

Get your “financial house” in order:
Like any big financial commitment, buying a home takes some planning and preparation. You’ll want to get all of your finances together and evaluate where you are, and where you’d like to be. Your financial plan may require you to:

• Make adjustments to your saving and/or spending habits. Ask yourself do
you really need that item especially if you are going to charge to your credit card.
Frugal spending will give you a little nest egg for home repairs and “must haves”
when you move into your new home.

• Reduce your current debt. Create a plan for paying off those credit cards.

• Start saving for a down payment. It will reduce the total cost of your mortgage.
Adjust your spending habits by making smart spending choices which benefit you
in the long run.

• Review your household budget. Determine how much you can comfortably
afford before you take the plunge.

Review your credit:
Your credit score is all-important when you’re in the market for a new home. The higher your score is, the more money you can borrow, and the less you’ll pay over the life of the mortgage. To take advantage of the lowest rates possible, aim to have your score close to 700 or higher (on a scale of 350 to 800). The good news is, if your score isn’t where you want it to be, there are some steps you can take right now to improve it:

• Pay your bills on time. Your track record accounts for 35% of your total score.

• Lower you debt-to-credit limit ratio. Put together a plan to start paying off
your debt.

• Check your credit report for FREE each year! You may have forgotten to close
an account that you cut up the card to in 1982. So take advantage of the free annual
credit report and make sure to check for any errors throughout the report. You have
the right to dispute inaccurate or incomplete information and the consumer reporting
agency is responsible for investigating and correcting such information.

Get pre-approved over the phone with CitiMortgage:
Pre-approved buyers are serious buyers – at least that’s what your realtor is probably thinking. Getting pre-approved really serves two purposes. First of all, it puts you ahead of other buyers who aren’t pre-approved when it’s time to negotiate and put down a bid. Secondly, it helps you understand your limits, before you shop for a home.

Choose the right real estate agent:
Find an agent that spend time in the neighborhoods that you are interested in, they tend to be the better agents who can help you find the best home for you.

Really think about large and small changes:
For example a large change may be changing jobs. You want to make sure that any job
change doesn’t affect your mortgage approval. A small change would be changing your
current bank as you don’t want to slow down the process of verifying your checking and other monetary assets.

The July 2009 Skinny Video/ Twin Cities Real Estate

Weekly Twin Cities Market Report

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As summer progresses, the Twin Cities housing market continues on a well-established pattern of shrinking supply and growing sales. New listings for the week ending July 11 were 1,867—a 13.7 percent decrease over last year but a nice pickup after the annual July 4 slowdown. Pending sales rose to 1,007, a year-over-year increase of 16.6 percent. That's not as much of a year-over-year expansion as the 30-plus percent growth this number has seen recently, but it still represents a trend of growing demand.

Active listings are at 26,279, a decrease of 21.3 percent from this time last year. Coupling this with a shrinking number for Months Supply of Inventory and a flattening of our Average Days on Market, it's apparent that the buyer advantage over sellers is waning, at least in the lower price ranges.

MAAR's Latest News Release – Prices Creep Up as Traditional Sales Grow

MAAR's Latest News Release – Prices Creep Up as Traditional Sales Grow
Increasingly busy people seem to prefer lists to prose. So let's wrap last month's numbers like this:

June saw 5,183 signed purchase agreements, up 33.7 percent from this time last year.

40.7 percent of closed sales in June were lender-mediated, compared to 59.7 percent in January.

A decrease in lender-mediated market share brought the overall median price up from last month to $173,500 in June. Despite the month-over-month increase, that's still a 15.4 percent drop from June 2008.

The median June sales price of traditional homes was $210,000, down 7.7 percent from a year ago.

The median June sales price of lender-mediated homes was $124,025, down 16.8 percent from a year ago.

The number of properties for sale at the end of June was 26,204, down 21.9 percent from this time last year.

There are 7.3 months of supply available, down significantly from the 10.6 seen at this time last year and trending back down towards a balanced market of 5 to 6 months of supply.

There are 10.9 months of traditional supply and only 4.4 months of lender-mediated supply.

June's pending sales were the highest June showing since 2005 and the 12th consecutive month of year-over-year increases.

With low mortgage rates and the $8,000 federal tax credit for first-time home buyers, we're seeing the recent jump in sales spill over into the traditional market.

We still have an abnormally high number of foreclosures and short sales, but it's an improvement from six months ago.

Sellers still face a challenging market, but things look better for them than they have in awhile.

Weekly Market Report

Weekly Market Activity Report

The Twin Cities housing market experienced its annual pre-Independence Day drop in activity as fireworks, barbeques and lake cabin excursions preoccupied the minds and schedules of many Twin Citizens. New listings took a steep dive prior to the holiday, dropping to 1,482 for the week ending July 4. This is an 8.3 percent decrease from the same week in 2008.

Pending sales also dropped to 989 for the week ending July 4. Fortunately, this stat is still a healthy 34.6 percent above where it was last year, when there were just 735 pending sales reported.

Further metric watching:

Housing Affordability Index – 192. While astoundingly high, the index has dropped since January due to price rebounding and higher mortgage rates.
Months Supply of Inventory – 7.3. This is a 31.1 percent decrease from the 10.6 figure posted last year at this time.
The market is showing signs of slowly moving back towards balance.

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Weekly Real Estate Market Report For The Twin Cities

Weekly Market Activity Report

Welcome back from the 4th of July weekend. Our post-4th news is remarkably the same as our pre-4th news. New listings continue at an atypically slow pace but pending sales are robust.

The 1,719 new listings for the week ending June 27 is 18.9 percent less than a year ago. The 26,043 total listings available is 21.3 percent less than last year. However, the 1,121 pending sales for this week excels last year by a giant 31 percent.

Additional metrics worth paying attention to this month:

Supply-Demand Ratio: 4.9 homes per buyer; 32.6 percent below last year; lowest since 2005.
Days on Market Until Sale: 140; seemingly high but crawling down to a pre-bubble level.
Housing market improvement has been significant in the lower price ranges, while homes priced above conforming loan limits still face significant challenges. With fewer homes available than last year, the number of days on market dwindling, and the clock ticking on government incentives, the buyer advantage is not as great as it once was.

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