Minnesota Homes Today Local & National News

Home Supplies Drop To Multi-Year Low

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Existing Home Supply drops to 5.9 months

As the third quarter closed, home resales showed considerable momentum nationwide.

The National Association of REALTORS® reports Existing Home Sales at 4.75 million units in September 2012 on a seasonally-adjusted, annualized basis, an 11 percent increase from one year ago.

An “existing home” is a home that’s been previously occupied; a resale.

The reading marks the second-highest tally of the year — second only to August 2012 when 4.83 million homes were sold on a seasonally-adjusted, annualized basis. The real estate trade association reports that there are now just 2.32 million previously-occupied homes for sale nationwide.

It’s the thinnest national home supply since March 2005 and, at today’s sales pace, all 2.32 million homes would sell in 5.9 months.

A 6.0-month home supply is thought to represent a market in balance. September’s home supply, therefore, suggests a market which favors sellers. Buyers in many U.S. markets may have noticed this shift. Multiple-offer situations are increasingly common and “right-priced” homes are selling quickly.

The median Time on Market is down 31 percent from last year to 70 days nationwide.

Meanwhile, for purchasers of foreclosures and short sales, September Existing Home Sales report included interesting data on the relative value of buying “distressed” property :

  • Foreclosures sold at an average discount of 21% to market value last month
  • Short sales sold at an average discount of 13% to market value last month

And, although distressed homes remain a large part of the U.S. housing market, their relative size is shrinking.

In September, foreclosures and short sales accounted for roughly 1 in 4 home sales. Earlier this year, that figure was 1 in 3.

For today’s Minneapolis home buyer, September’s Existing Home Sales report may be a “buy signal”. With home supplies down and demand for homes rising, home prices are poised to increase through the last three months of 2012 and into the start 2013.  Minnesota Homes Today and Market Data

The Most Expensive U.S. ZIP Codes (2012 Edition)

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Most expensive ZIP codes in the U.S.Since late-2011, home values have climbed in many U.S. markets.

The government’s Home Price index puts the increase at +3.7% an annual basis and the National Association of REALTORS® shows home sale prices up 11% since last year.

The price at which a home sells is determined by the economic force of supply-and-demand but location and amenities matter, too; establishing a baseline from which supply-and-demand can work.

Using data compiled by real estate market data firm Altos Research, Forbes Magazine recently presented America’s 10 most expensive ZIP codes for 2012. California and the New York Metro area dominate the list.

  1. New York, NY (10065) : $6,534,430
  2. Alpine, NJ (07620) : $5,745,038
  3. Atherton, CA (94027) : $4,897,864
  4. Sagaponack, NY (11962) : $4,180,385
  5. Hillsborough, CA (94010) : $4,127,250
  6. New York, NY (10014) : $4,116,506
  7. Los Altos Hills, CA (94022) : $4,016,050
  8. New York, NY (10021) : $3,980,829
  9. Rolling Hills, CA (90274) : $3,972,500
  10. New York, NY (10075) : $3,885,409

As an illustration of how home prices have climbed since Forbes publishes last year’s Most Expensive ZIP code list, this year’s #10 — Upper East Side, New York City, New York — would have ranked third in 2011.

The Forbes list may be interesting but, to home buyers or sellers in Minneapolis, it’s far from the final word in home values. Real estate remains a local market which means that — even within a given ZIP code — prices can vary based on street and neighborhood, and home characteristics.

Look past the general data and get to the specifics. Talk to your real estate agent for local market pricing.

What’s Ahead For Mortgage Rates This Week : October 22, 2012

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FOMC meets this week -- mortgage rates get volatileMortgage markets worsened last week as hope for a European economic rebound and stronger-than-expected U.S. economic data moved investors out of mortgage-backed bonds.

Mortgage rates all of types — conventional, FHA and VA — lost ground last week, harming home affordability in Minneapolis and reducing purchasing power nationwide.

Rising rates also thwarted would-be refinancing households hoping to time a market bottom.

The increase runs counter to Freddie Mac’s weekly Primary Mortgage Market Survey which showed the average 30-year fixed rate mortgage rate dropping 2 basis points to 3.37% nationwide.

This contradiction occurred because Freddie Mac’s weekly mortgage rate survey is conducted Monday through Wednesday, and because the majority of the surveyed banks reply to Freddie Mac on Tuesday. As a consequence, Freddie Mac failed to capture this week’s mid-week movement that took mortgage bonds to a one-month worst.

Access to Freddie Mac mortgage rates is for “prime” borrowers and requires payment of discount points plus closing costs.

This week, mortgage rates may rise again. There is a lot of news on which for Wall Street to trade, beginning with the week’s biggest story — the Federal Open Market Committee’s 2-day meeting scheduled for Tuesday and Wednesday.

At the FOMC’s last meeting, the Federal Reserve introduced a third round of qualitative easing (QE3), a program through which the Fed will work to keep mortgage rates low until the economy’s recovery is more complete.

The Fed is expected to announce no new stimulus in this, its seventh of eight scheduled meetings for 2012, however, mortgage rates are typically volatile in the hours after the FOMC adjourns.

New housing data is set for release this week, too.

Wednesday, the U.S. Census Bureau will release September’s tally of New Home Sales. Given the recent strength in Housing Starts and rising confidence among the nation’s home builders, New Home Sales may best analyst calls for 385,000 new home sold last month on a seasonally-adjusted, annualized basis.

Strength in housing has recently correlated with rising mortgage rates.

The housing market’s forward-looking Pending Home Sales Index is released Thursday.

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