Presenting The Lister Sisters!

October Monthly Skinny from MAAR! The monthly update of the market in the Minneapolis/St. Paul Real Estate Market!  Enjoy!

The housing slump appears to be affecting the Minneapolis-St. Paul

Metropolitan Area more than other parts of Minnesota, according to a
new report from the Minnesota State Demographic Center.

The study, based on data from the state Department of Revenue, shows
that both median sales price and the number of sales dropped more
within the Twin Cities area than elsewhere in the state between the
first three quarters of 2007 and 2008.

“The Department of Revenue data is a unique resource that
allows us to look at all parts of Minnesota, not just the Twin Cities
area,” said Martha McMurry, a research analyst with the State
Demographic Center. While real estate groups and other organizations
provide information that is more current, they generally provide data
only for large metropolitan areas.

Most regions of the state experienced a decline in the number of
sales, while median sale prices rose in 36 counties and fell in 49
counties between 2007 and 2008. Northwestern and west-central Minnesota
experienced stable or rising prices. By contrast, only Carver County in
the 11 counties of the Minneapolis-St. Paul area experienced rising
prices. Statewide, the median price dropped 5 percent, from $200,790 to
$190,000.

The report, “Minnesota Housing Prices, 2007-2008,” is available online at www.demography.state.mn.us.

Contact: Tom Gillaspy

State Demographer

tom.gillaspy (at) state.mn (dot) us

651/201-2461

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Tags: housing slump, median sales price, twin cities

I have been looking at a ton of homes all over the Twin Cities under $300,000.  I have seen it all Foreclosure, Short Sales, Estate homes, traditional seller homes, but the home I would like to talk about are the flip homes that are flops or just the Flip Flop.

Flip Flop homes are houses that have been bought at supposed bargain prices.  These “great deals” are then polished and shined to sell and sell fast.  But do they?

I can’t tell you the countless number of homes out there that fall into this category.  There seems to be quite a few people out there that have watched all those inspiring remodeling and flipping home shows on television.  In today’s market and especially in the Twin Cities, it is hard to find that truly good deal that allows for a flip home to be successful.

Why?  Because the market is very different from the hay days of real estate.   The market is much slower.  There is not a frenzy or urgency to buy (unless you are buying homes under $150,000.)  People have time to look and take their time to decide.   Because of this, they are looking closer at homes, at the craftsmanship and quality of remodeling.

Many of the flip flops I have seen are great at first glance, but when you really start to look close the work is not up to par or is not consistent.  I have seen a trend to use cheap grades of carpeting or cheap laminate hardwood flooring that look good today, but will not wear well.  Another flooring disaster; tile or natural stone floors placed in kitchen sand baths without replacing worn out or uneven subfloor.  Can you say crack?

Another flip flop favorite is painted cupboards in the kitchen with new hardware that look good on the surface, but have not been painted and primed properly.  How about the popular granite or siltstone countertops on old cupboards?  What a waste of money.

One of the biggest problems I see with flip flops are that the flippers themselves are not buying the right house to flip.  Don’t buy the inherently undesirable home and try to make it desirable.  That bargain on a busy street is still on a busy street. The two bedrooms without space to expand no matter how well the flipper remodels the home, is still a two bedroom home.  Generally people want three plus bedrooms and preferably on one level.

My final point is that many times  a flip flop occurs because the flipper buys an older home, a home they may have bought for a good price, and but they  remodel  the home without really understanding the market.  They may have done an outstanding job at remodeling and updating the home.  The home is picture perfect.  But has the flipper really added a ton of value to the home or have they just made the home more sellable at a slightly higher price.

This market is brutal.  Ask any traditional seller.  Everyone’s home needs to be picture perfect to sell or the owner will be knocked down on the price.  In this market when you have home, it expected that you have maintained your home.  Part of this maintenance is replacing flooring when it is worn or dated, updating your kitchen and bath after a certain period of time, replacing appliances and mechanicals, painting or taking down dated wall paper,  replacing old dated window treatment, fixing what needs to be fixed and repairing or replacing what needs to be repaired or replaced.  This is home maintenance and this is part of home ownership and now more than ever it matters.  Unfortunately for the inexperienced flipper they may be doing what is expected in this buyer driven market.  They are not adding a ton of value to the home, but just making it more sellable to a buyer.

Now don’t get me wrong.  Not every flip is a flop.  There are plenty of great homes out there that investors buy, remodel and sell.  They are usually in highly desirable areas and they sell fast.  They may also be homes that are truly bought for a “deal” which allows the investor to update the home to make it on par with the other homes in the neighborhood.  In these scenarios:  Hurray! For the investor who makes a profit and saves a home.  Hurray! For the buyer who gets to buy an updated home.

Tags: First time home buyer, Home Conditioning, home flipping, Home Staging, remodeling

What to Watch For
New construction homes continue to go the way of the dodo bird. There are
currently 3,149 new construction units listed for sale in the MLS system, down
25.0 percent and over 1,000 units from a year ago. Unfortunately, sales are
down even farther, which has pushed the Months Supply of Inventory for new
construction properties up to 11.3 months.
You may have heard the news that home sales are increasing in the Twin Cities.
The rise is entirely in the single-family detached segment, however, as both
townhomes and condominiums are selling less frequently this year than they did
a year ago.
Similarly, the recent uptick in sales has missed the upper bracket market. Home
sales above $190,000 are down 20.0 percent in the last year.

maar 2009

Tags: maar report, New construction twincities, single family detatched minneapolis. house sales minneapolis

 The March Housing Supply Outlook is out. What to watch for:
Home sales below $150,000 are extremely hot, more than doubling over the last 12 months due to the effect of foreclosures and short sales.
There are now 7.8 months of supply, which is 15.2 percent lower than the rate of 9.2 months seen at this time last year. The biggest drop-off in months supply has been in the single-family property type, as sales have risen and inventory has dropped. Months supply of condominiums has actually risen 11.9 percent to 12.2 months.
Paradoxically, the average price of a condo has grown 5.7 percent in the last 12 months. However, the price per square foot has declined by 5.2 percent to $172 per square foot. This is an indication that larger condos have been selling but have been selling at a relative discount when we control for square footage.
 MAAR_March 2009

Tags: MAAR, twin cities housing, twin cities real estate, twincities housing supply

Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.

For all of 2008, there were about 4.9 million existing-home sales — 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.

Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.

“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”

Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.

Yun said the market is underperforming and hurting the broader economy.

“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”

Housing Stats

National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.

Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.

Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.

Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.

Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.

Existing-Home Sales By Region

Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.
Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.
South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago.
West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.

A Good Time to Buy

NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.

“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”

McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.

Tags: distressed housing, first time, foreclosure, home sales, housing sales, housing stats, midwest housing, sellers, stimulus package

Hello happy house hunters…

Here is the January skinny video from MAAR. It is the market update for the month of January.

As always, were are available at all times for questions, home-hunting assistance, or for a good real estate chat! We love this business and are here to help YOU! Happy home-hunting!

Tags: home hunting, January 2009 housing, MAAR, market report, market update, Skinny

From Minneapolis Association of Realtors here are a few highlight from the January housing supply outlook: 

The January Months Supply of Inventory dropped to 7.6-9.3 percent below the same time last year. The lowest months supply can be found in single-family detached properties, which currently sits at 7.0. The highest can be found in condominiums-a hearty 11.4 months of supply is available in that segment.

The lower price ranges continue to see a growing share of market activity. Home sales below $150,000 have more than doubled in the last year, jumping 133.1 percent. The lion’s share of homes being sold in these price ranges are lender-mediated foreclosures and short sales.

As a result of this growing phenomenon, prices continue to soften. The Average Price Per Square Foot over the last twelve months is 14.5 percent lower than the twelve months before that. The largest declines can be seen in single-family detached properties.

Tags: housing supply, January 2009 housing, minneapolis association of Realtors reports, minneapolis housing supply, report-housing 2009

The Minneapolis Area Association of Realtors puts out a market report every month called the “Skinny:. Here is Decembers YouTube market analysis.

Source: http://mplsrealtor.typepad.com/theskinny/

Tags: December, MAAR, market analysis, market report, Minneapolis Area Association of Realtors, Skinny