Minnesota Real Estate Weekly Update

2300 new listings came onto the market here in the Twin Cities this past week, with 650 accepting offers and going pending. Overall inventory levels continue to hover around the 44,000 active listings mark in the 13 county Twin Cities Metro Area.

Pending sales are down 26.8 % compared to this exact same time in 2006. Thankfully, new listings also decreased 2.3% compared to 2006.

The National Association of Realtors report this week indicated a 16 year high for the current supply of homes on the market nationally. There is now a 9.6 month supply of homes on the market, up from the 9.1 month reading in June. This is the largest supply of homes by that measure since October of 1991.

Conventional wisdow asserts that home prices will not see any momemtum until we can start to "sell through" this vast supply of homes.

Price and condition remain paramount in this type of market. If you are not priced to sell, or not willing to price the home to sell, it will sit on the market endlessly. Give us a call at 952-223-1150 to do a free market analysis if you are looking to sell.

Our team, The Minnesota Real Estate Team, has sold 240 homes in 2007. Our marketing plan is aggressive and it works even in these trying market conditions. Look for another real estate update next week!

Minnesota Real Estate Weekly Update

Newly signed purchase agreements for the week ending August 11th are down 12% from this exact time in 2006. Thankfully, builders and sellers have slowed a bit in putting new properties on the market, with 2007 seeing a 3.3% decrease compared to 2006 in new listings processed.

Currently, there still remains 44,000 active listings on the MLS in the 13 county metro area. Many home sellers are seeing increased market time, with price and condition remaining as crucial as ever.

On the other hand, the short sale and bank owned market here in the Twin Cities is continuing to see high inventory numbers AND high sales numbers. Mary Alice Short leads the bank owned/short sale division on The Minnesota Real Estate Team. A short sale occurs essentially when the seller is unable to sell the property for what he or she owes on it. The bank takes a loss on it. It should be noted, banks by and large prefer a short sale over a foreclosure. In the case of the foreclosure, the bank loses even a greater amount of money. Over the past two weeks alone, Mary Alice and her team have sold 8 listings.

If you are a seller who is experiencing a tough situation and needs to avoid foreclosure, you may look at the possiblity of doing a short sale. Please call us at 952-223-1150 for more information. Mary Alice and her team are here to help you through this process and difficult time period.

Look for another real estate update next week!

Home foreclosures mounting in St. Louis County

By Marshall Helmberger

The dramatic downturn in housing and near collapse of the subprime lending market is beginning to hit parts of rural Minnesota, including St. Louis County, where the number of home foreclosures is expected to double this year over 2005 levels.

About 400 foreclosures are now expected in the county in 2007, up from 219 two years earlier. Those 400 foreclosures represent a little over two percent of the roughly 17,000 mortgages recorded in the county annually, but housing officials say it could be the first evidence of a growing problem for homeowners in the county.

Warren Hanson with the Greater Minnesota Housing Fund called the situation an “invisible epidemic” that is affecting all corners of the state. The GMHF recently released a statewide analysis which reported 11,207 foreclosures throughout Minnesota last year, or nearly double the number reported in a national study conducted by a private real estate information company. “The national wave of subprime mortgage foreclosures has resulted in hardship for thousands of families throughout the state,” said Hanson.

Foreclosures can devastate family finances, according to Hanson. Following foreclosure, many families are displaced from their neighborhoods and communities, and their credit ratings are irrevocably damaged. In addition, foreclosures can result in abandoned properties that may reduce the value of nearby homes and adversely impact entire neighborhoods.

A recent congressional report estimated the cost of home foreclosures to families, neighborhoods, and communities at $80,000 per home.

Local finance officials agree that the number of foreclosures in the area is up. “We watch it every week,” said Diane Meehan, president of the State Bank, in Tower. “You used to see one or two in a week but now the list is getting lengthy,” she said.

Meehan said the practices of some lenders themselves may have contributed to the problem. Meehan said established banks and credit unions in the area are generally not seeing an increase in foreclosures themselves, in part because their mortgages are regulated and must meet strict criteria before being issued.

But the real estate boom of three and four years ago brought many new lenders into the business and some of them weren’t as selective in their borrowing. “A lot of people were affected by the 100 percent mortgages,” said Meehan. Such mortgages allowed individuals to purchase homes with no down payments, and often with adjustable rate mortgages. Meehan said rising interest rates over the past two years have boosted monthly payments on those adjustable rate mortgages, often beyond what homeowners can afford. “Lots of people were buying homes that way,” said Meehan.

Foreclosures often result from what are called subprime loans and predatory sales practices. “Not all subprime loans are predatory,” University of Minnesota housing-studies professor Jeff Crump said, “but nearly all predatory loans are subprime.”

Predatory practices include lending without regard to borrowers’ ability to pay, failing to verify borrowers’ income, “churning” or repeat refinancing, charging excessive fees, and high-pressure sales and marketing. “Predatory loans,” says Crump, “are sold, not bought.”

In fact, Crump said, “half of subprime borrowers actually would have qualified for a prime loan.”

In recent years, subprime loans have come to comprise a significant percentage of home mortgages. According to federal data, suprime loans now represent about 25 percent of all home mortgages in small communities in Minnesota. In some counties in the state, it’s nearly 50 percent.

“I don’t think some of these lenders did their clients any favors,” commented attorney Mark Weir, with Vermilion Law Office in Tower. “Many have gotten into financial burdens that are way over their heads,” he said.

And the problem isn’t going away soon, according to individuals involved in housing issues. “Our research suggests that with flat or depreciating home values expected to continue, the foreclosure surge is nowhere near the end,” said Melissa Manderschied, an attorney with Kennedy and Graven in Minneapolis.

Help is out there

Homeowners facing the prospect of foreclosure can get advice from the Minnesota Home Ownership Center at 866-462-6466. Other organizations, like the GMHF, are also working with partners and affordable housing funders to assist families and communities facing foreclosure. The GMHF can be reached at 800-277-2258

Minnesota Real Estate Weekly Update

The current housing supply rate in the Twin Cities 13 county metro area is 9.7 months. This means it would take 9.7 months for current supply of properties to become pending or sold. Last year, the housing supply rate was 7.4 months. This is a 31% increase in one year alone!

Last week, 2600 new listings went on the market here in the Twin Cities, with 800 going pending (getting an accepted offer.) Currently, there are 44,000 listings on the market.

With the recent shakeup in the mortgage industry, it is essential for you as a buyer to work with a professional that knows these various programs, and one who simply stated, will get your loan closed for you. Our team, The Minnesota Real Estate Team, works exclusively with The Minnesota Home Loan Partners of The Cornerstone Mortgage Company. Alec Grebis specializes in first time buyers. Rob Bonahoom is the investment property financing guru, and Carrie Guarrero works with move up buyers (in addition to managing the entire office.) These three individuals are a class act. I encourage you to contact them.

They can be heard weekly on our two hour real estate radio show, The Minnesota Real Estate Show, Saturdays, 11 AM - 1 PM, on 100.3 KTLK, FM. Give us a call at any time if you have any real estate related questions at 952-223-1150.

Look for another real estate update next week!

Minnesota Real Estate Weekly Update

The Minnesota MLS has continued to grow with more and more listings being put on each week. For the week ending July 28th, there were 2100 new listings put onto the market here in the Twin Cities metro area. In addition, there were 800 mls listings that went pending. Overall, housing inventory levels in the Twin Cities continue to hover around 44,000 active listings.

Compared to 2006, new listings processed are down 1.9% and pending sales are down a whopping 22%. The housing supply rate in July of 2007 was 9.6 months (This means it would take 9.6 months to sell the current inventory of properties.) In July of 2006, the housing supply rate was 7.1 months. In one year alone, we have seen an increase of over 34%!

In spite of the higher inventory levels, our team's Guaranteed Sale program is still getting results for our sellers. Simply stated, if the property does not sell with our marketing plan, we will personally buy it ourselves! Contact us if you would like more information about this program.

Look for another real estate update next week!

Minnesota Real Estate Weekly Update

Total active listings for sale in the Twin Cities grew to an astounding total of 44,200. This past week, 2600 new listings went on the market, with 900 listings going pending. Surprisingly (and thankfully), builder inventory has declined from this same time in 2006 by 600 units.

Buyer activity is relatively slow market-wide. The number of newly signed purchase agreements is 10.2% lower than this exact time last year.

Buyers are still somewhat scared about the overall stability of the market, and sellers are being forced to compete with 44,000 other properties on the market.

As one can imagine, this is a great time for a buyer to get a "deal" on a property. Sellers are most assuredly more willing to negotiate, and the rise in bank owned/short sale purchasing opportunities for buyers has grown as well.

Look for another update here next week!