WEEKLY REPORT

Weekly Market Activity Report

There’s no April Foolin’ this time of year regarding the Twin Cities housing market. We’re able to report several encouraging signs this week as the market seems to be “Def” to any signs of slowdown.

For the week ending March 28, pending sales continue to reflect strong growth, increasing 28.2 percent over last year. Our oversupply continues to draw down, with new listings declining by 12.2 percent for the same time period comparison. The total number of houses for sale is 26,131, a decline of 16.2 percent from this time in 2008.

Days on Market Until Sale continues its downward trend, dropping 9 percent over last year to 150 days. Percent of Original List Price Received at Sale is definitely not Bringin’ on the Heartbreak as we’re showing our first upward year-over-year move in (a rock of) ages, increasing by 0.6 percent this month. Our Supply-Demand Ratio fell to 5.57, which means there are 5.57 houses for sale for each buyer in April, down 23.5 percent from last year.

With mortgage rates at historic lows and the $8,000 federal tax credit for first-time home buyers, it’s not surprising to see some arena rock level of hysteria in our local marketplace. We’re certainly excited; thus the untucking of our dress shirt this week. It’s been a long time since we’ve been able to pour some sugar on you.

Click the logo below or click here for this week’s full report. Visit Market Info for more research reports.

WEEKLY REPORT

Weekly Market Activity Report There’s no April Foolin’ this time of year regarding the Twin Cities housing market. We’re able to report several encouraging signs this week as the market seems to be “Def” to any signs of slowdown. For the week ending March 28, pending sales continue to reflect strong growth, increasing 28.2 percent over last year. Our oversupply continues to draw down, with new listings declining by 12.2 percent for the same time period comparison. The total number of houses for sale is 26,131, a decline of 16.2 percent from this time in 2008. Days on Market Until Sale continues its downward trend, dropping 9 percent over last year to 150 days. Percent of Original List Price Received at Sale is definitely not Bringin’ on the Heartbreak as we’re showing our first upward year-over-year move in (a rock of) ages, increasing by 0.6 percent this month. Our Supply-Demand Ratio fell to 5.57, which means there are 5.57 houses for sale for each buyer in April, down 23.5 percent from last year. With mortgage rates at historic lows and the $8,000 federal tax credit for first-time home buyers, it’s not surprising to see some arena rock level of hysteria in our local marketplace. We’re certainly excited; thus the untucking of our dress shirt this week. It’s been a long time since we’ve been able to pour some sugar on you. Click the logo below or click here for this week’s full report. Visit Market Info for more research reports.

WEEKLY REPORT

Weekly Market Activity Report

With mortgage rates plunging downward in recent weeks in response to actions taken by the Federal Reserve, home buying activity remains strong.

For the week ending March 21, pending sales in the Twin Cities were 13.0 percent higher than the same week last year, while the number of new listings on the market was basically flat. Over the last three months, there have been approximately 1,200 more signed purchase agreements than there were a year ago and 3,000 fewer new listings. During this time, 58.1 percent of pending sales have been lender-mediated foreclosures and short sales, while 37.1 percent of new listings have been lender-mediated. The fact that the share of lender-mediated sales easily exceeds the share of new lender-mediated listings is a hopeful sign.

New buyers entering this market will be met with strong affordability but will have less to choose from compared to previous years. There are currently 26,064 homes for sale in the metro area, which is down 15.7 percent and 4,840 units from this time in 2008.

Click the logo below or click here for this week’s full report. Visit Market Info for more research reports.

WEEKLY REPORT

Has everyone remembered to “spring” forward? It looks like the Twin Cities

Housing Market certainly has, as the new season has brought in an uptick in

sales along with the warm weather. The market can only hope that “spring”

fever is more than just a figure of speech.

Speaking of pending sales, while they have tapered off during the week

ending March 14, there is no denying that since the new year began pending

sales have steadily outperformed last year’s numbers. In fact, even with

almost no increase in pending sales activity the 870 pending sales for the

week are still 14.9 percent higher than last March at this time.

Total active listings are another story. While new listings for this period are

only 13.9 percent lower than last year, active listings are down nearly 14.7

percent. This can be looked at in a positive light however if you consider the

combination of pending sales, decreasing inventory, and higher HAI (Housing

Affordability Index) are all helping to get more people into homes throughout

the new spring season. This coupled with the federal government’s tax credit

efforts could give the Twin Cities housing market the added boost it needs to

awaken and to realize the potential that is out there.

There are many other events that coincide with spring: spring training, spring

fever, spring boards…ok that last one isn’t technically associated with the

season. But with the Month’s Supply of Inventory for March down 15.2

percent over last year, agents across the Twin Cities can assist buyers in

diving right into the market now that conditions are beginning to warm.

WEEKLY MARKET ACTIVITY REPORT

Brr! Did the last snowstorm convince you that winter has not loosened its icy grip on the Twin Cities quite yet? It seems assured that March will lion in and lamb out, but the Twin Cities housing market is not expected to show the same pattern, as sales continue to climb upward when compared to last year’s numbers.

Since December 2008, pending sales for the Twin Cities housing market have continued to outperform the same week for the prior year. For the week ending February 21, pending sales are up 12.4 percent vs. last year at this time. Deep freeze or not, buyers are showing a willingness to brave the temperatures for a deal.

New listings checked in at 1,558, which is 15 percent below 2008. Active listings are off from last year by about 4,000 (or 13.7 percent fewer) homes. Warmer weather tends to coincide with more activity, so we’ll be watching new and active listings with much interest over the next few months.

Another number to watch is the Supply-Demand Ratio (SDR). This figure, representing how many homes are available per buyer, is down 21.8 percent to 6.38 homes per buyer compared to last year. That’s now nine months in a row of lowered year-over-year SDR. With fewer active listings and a shrinking SDR, sellers may begin to feel some easement from the buyer’s market wedge. It’s too early to tell, but as many of our REALTOR® members are telling us, the increase in foot traffic is palpable.

SMART BUYERS REPORT

 

Once again, the window of opportunity has opened!  Buyers are realizing there are a number of reasons to take advantage of current market conditions and purchase their dream homes.  Smart real estate opportunities only come along once in awhile.  Today those “smart” opportunities are here.  Those that act will see what a smart move they made.  Others will regret the smart move they could have made.

All of the components are here: Low interest rates, Favorable pricing, Terrific inventory

TIMING:
People purchasing real estate today compete with fewer buyers and enjoy “cherry-picking” the absolute best offerings in the market.  As the upward momentum begins with increase, the large pool of buyers who have remained on the sideline begin to enter into the market as prices have already risen and inventory of the most desirable homes beings to fall.

Although it is hard to quantify time, we all have come to understand that life is short.  Time is irreplaceable.  How long do you want to wait?

Timing “the bottom” in any market is nearly impossible.  By the time the bottom has been reached, prices have already started to increase and the smart buyers have plucked the prime properties and best values from the inventory.

OWNERSHIP:
The only way to purchase in this buyers’ market is to make an offer!  Today, smart buyers are narrowing their search and are starting the negotiation process with sellers.  Smart buyers are picking the deals quickly, so it is to your advantage to be ready when they hit the market.

As Warren Buffet stated, “ If you wait for the robins, spring will be over.”

Week of February 9, 2009 and Stimulus Update for the housing market:

Week of February 9, 2009

For the week ending January 31, new listings continue at a lower level than seen last year, clocking in at 1,635—a 15.3 percent drop. Conversely, pending sales continue to raise sand with 673 recorded for this week’s report—25 percent above last year. Basically, this is all welcome news. Having fewer listings on the market, combined with an increase in pending sales, helps to reduce the Months Supply of Inventory to 13.5 percent when compared to last year at this time—down from 8.9 to 7.7 months. This means it will take the current supply of houses for sale 7.7 months to sell (on average). The Percent of Original List Price Received at Sale continues to fall, with the January figure of 89.5 sitting at 1.6 percent less than 2008. It’s important to consider sales prices of foreclosure homes and how they affect this figure. Our new Housing Affordability Index jumped to 202 in February. This is a new record and means that the median family income is 202 percent of what is necessary to qualify for the median-priced home. Again, we must consider how the sales prices in the lender-mediated market are affecting this figure, but we can say with some confidence that there are a number of very attractive buying opportunities in the local housing market. If we are able to maintain these trends, we’ll be well on our way to killing the blues. And to this current market malaise, we’ll be singing “gone, gone, gone (done moved on).”

Stimulus Update for the housing market:

Weekly Update to Federal Political Coordinators An Economic Stimulus Plan Update The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1.) has been reconciled by the House and Senate. The details of the legislation are now being reviewed by House and Senate offices, as well as NAR staff experts.  Congress will likely pass the package in the next 24 hours.  We expect the legislation to include a number of important housing provisions, including the remedies for the housing crisis that NAR has been pushing. Homebuyer Tax Credit – an $8000 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and December 1, 2009.  The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit as well. FHA, Fannie and Freddie Loan Limits – Revised loan limits for FHA, Freddie Mac, and Fannie Mae.  Reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary. Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. President Obama has indicated he expects a final bill on his desk for signing on Monday, Feb. 16. To see all the information on the stimulus plan, please visit REALTOR.org: http://www.realtor.org/government_affairs/gapublic/gses_conservatorship. Any questions about the tax implications of the plan can be directed to Linda Goold at lgoold@realtors.org.  Questions about the stimulus plan in general can be directed to Tony Hutchinson at thutchinson@realtors.org.

Money, Happiness and Your Brain

Neuroeconomics and the science of positive psychology have revealed amazing insights into the inner workings of your brain. Here is a summary of some of the information in this talk on how to make better financial decisions, increase your success rates, and maximize your happiness during times of stress anduncertainty.

1. Refocus on absolute changes, not relative ones. Our neurons are not sensitive to absolute dollar values, only to relative changes in value, which can lead you to make knee-jerk decisions you’ll regretlater. When making economic decisions, evaluate the absolute value involved, not the relative gain or
loss. (Goleman, 2005)
2. Craft your environment. Cut down on environmental cues that will trigger your reflexive brain into unneeded financial panic. If you’re investing for the future, don’t follow the day-to-day changes in the market. We pick up stress like second-hand smoke, so avoid conversations where friends ruminate on their
financial woes or the latest turn in the economy, and limit your own complaining. (Ben-Shahar, 2007)
3. Use your words. Verbalizing emotion moves us from reflexive to reflective decision-making. If you are worrying about bad financial news, write down how you’re feeling. The act of putting the emotions into words will immediately decrease their magnitude, improve your well-being, and enhance your decisionmaking
skills. (Haidt, 2006)
4. Avoid the Gambler’s Fallacy. Your brain often perceives patterns that aren’t really there, which can lead you to falsely anticipate a financial outcome that won’t actually happen. Research shows that you can avoid this trap by taking a 20-minute break to do something else before you make a big financial
decision. As they say in Vegas, ‘let the dice rest.’ (Kahneman & Tversky, 2000)
5. Remember your emotional immune system. No offense, but you’re a bad predictor of your future feelings. It’s a flaw in the human brain. Financial rewards are never as fulfilling as their anticipation, and financial losses will never feel as bad as you think they will. Research shows that even big lottery winners go back to their baseline level of happiness one year later. So try to manage your expectations, and above all else, remember that money and well-being are almost entirely unrelated. (Gilbert, 2005)
6. Money can buy happiness, if you use it well. Aim for ‘inconspicuous spending,’ which focuses on doing and involves experiences with other people. Avoid ‘conspicuous spending,’ which focuses on having and involves status and material goods. What type of spending is most predictive of happiness?
Pro-social spending. Buy for other people and you’ll be getting far more in return. (Norton, 2008)
n To e-mail Professor Achor: achor@fas.harvard.edu.
n For reading list or more information: www.aspirantworld.com
b y S H AWN ACHOR
 

Positive Housing News from The Wall Street Journal

Remember to “Be the Press!!!”

Kathy

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

By Michael Douville – Housing Industry

Builders across the nation have slowed construction to a pace not seen in 60 years, a time in which the US population was about half of what it is today. Although there still remains an existing unsold inventory comprising a surplus of between 11-11.5 months of new homes, the supply is finally shrinking. Although the residential real estate market is still very fragile, the supply-demand equation is balancing. Builders have been suffering for two years after all, lowering prices and giving huge incentives to current buyers to sell inventory.

In the boom years of 2005-2007, builders acquired land for future development to replace the land that was being used at a furious pace. Most consumers are not aware of builders’ “land banks”; however, this acreage represents economic liability even in good times. Generally the interest accumulates and is capitalized in individual lots, adding to sales price increases as developments are sold out. In uncertain times, the interest must be paid in installments, adding to cash flow concerns. Experienced building companies placed their land and lots on the sales market at huge discounts to remove the liabilities from their balance sheets; those that did not sell out immediately after the slowdown was evident have been forced to build their way out of their land. Over the past few years, there has been a consistent supply of new “spec” homes coming to market, replenishing the inventory. The available supply of homes has stubbornly remained at elevated levels. However, many signs point to much lower inventory levels in the coming months helping to stabilize the housing industry.

In my estimation, the absorption of excess housing inventory will take 6-9 months, placing the beginning of the recovery in the late second or early third quarter of 2009. Programs initiated by the Federal Reserve, the FDIC, and the Treasury have just begun implementation, and will have a cumulative effect. The rate cuts and loan balance reductions designed to lower mortgage payments and entice troubled and burdened homeowners to remain in their homes will result in fewer foreclosed properties coming to market, further reducing the glut. Foreclosed properties are selling much quicker due to a combination of lower prices and lower long-term mortgage rates, which are projected to continue declining to a possible 4-4.5% 30-year fixed rate. The “affordability threshold” has been breached and is reflected in stronger buyer activity. The dilemma for a buyer is timing the acquisition, deciding when is best to buy and lock-in a mortgage rate on a discounted home. There are many things to be considered in this decision.

In my opinion, the real estate market across the US was healing and starting to recover all throughout the spring and summer of 2008. When the rumors started about the possible failing and bankruptcy of several large financial institutions, and the sale of Bear Stearns and eventual loss of Lehman Brothers, asset managers responsible for the orderly dissolution of REO properties became extremely concerned and aggressively lowered prices. This jolted a fragile sales market and exacerbated lending conditions, resulting in further tightening of underwriting standards and a widening of the risk premium, which in turn caused higher rates, fewer approvals, and less qualified and more apprehensive buyers. Fear ruled the marketplace! As Bob Dylan sang ages ago…“the times they are a changing.”

The U.S. is the only industrialized nation in the world with a considerably expanding population; there is a baby born in the U.S. every 8 seconds. October 17, 2006 is credited as the day our population first exceeded 300 million; 26 months later, the U.S. Census computes the population is over 305,492,000. There exists a need for over 1 million new homes a year to supply this level of population growth. Further, the problem areas of California, Nevada, Arizona, and Florida are the same regions consistently named as the highest growth areas of the nation. California remains the projected most populous state with a population increase from 33,800,000 in 2000 to over 46,000,000 by 2030. Nevada, Arizona, and Florida are ranked 1, 2, and 3 for population increase in the period 2000 to 2030; the projected increases are explosive at 114%, 108%, and 79% respectively.

These estimates may be conservative due to the disruption of the orderly demographic shift that will be have been initiated by the economic dislocations of this recession. The nation’s most severe housing woes are centered in these four problem areas. In the Phoenix Metropolitan Statistical Area, where I am headquartered, new home permits are reported to have dropped to under 300 permits for the month of November in an area of 4 million residents. Absorption is underway here, and there is mounting evidence Nevada and California are experiencing the same conditions. The activity in my local market for December has been exceptional, with buyers purchasing foreclosed inventory and competing with sellers at opportunistic pricing and historically low mortgage rates.

“…liquidity is very slowly returning to our capitalistic society and the general economy, which is pointing to an overall housing recovery by 2010.”

There are encouraging developments in real estate markets across the U.S. The balance between buyers and sellers is mending due in large part to the reduced builder activity and declining mortgage rates, which will support higher asset prices. Further, government programs to rescue troubled homeowners are starting to work; liquidity is very slowly returning to our capitalistic society and the general economy, which is pointing to an overall housing recovery by 2010.

There is at least one more wave of foreclosed properties entering the market in the next 90-120 days. These will have been priced on last years dismal statistics and should present extraordinary value. As last year saw the perfect storm in the securities and real estate markets, this round of foreclosures will have the bad news priced in to them. As a long-term investor, one should remember what Warren Buffet has been quoted as saying: “Be greedy when everyone is fearful and fearful when everyone is greedy.” The growth dynamics of the United States have not been cancelled, only postponed for a short interval. Values are extremely compelling and there may now exist a new “Buying Storm” on the horizon, with extreme value and historically low mortgage rates feeding it.

STAYING POSITIVE AND HAPPY THROUGHOUT THIS HOLIDAY SEASON!

It’s been a great year at One Day University because of you, and we wanted to express our thanks with a small holiday gift. So we asked one of our most popular professors, Shawn Achor, who teaches positive psychology at Harvard, to record a brief audio lecture on staying positive and happy throughout this holiday season. Please click the link below to listen to your free mini-lecture.  You’re welcome to forward this audio lecture to your friends!

 

Shawn Achor Holiday Lecture

 

Instructions:

1.      Be sure to turn your speakers on!

2.      Click on the above link and your audio lecture should begin playing immediately.

3.      If it does not begin to play immediately, right-click the link and chose Save Link As to download it to your computer. Once you have done so, open the file from your computer and it should play with your computer’s default media player.

 

If you have any problems, please give us a call at (800) 663-3298 and we help you get it running.