Home Sweet Home, Insider-Tips on Minnesota real estate.

Home prices UP? Or down?

Home prices in Minneapolis rose faster in June than in almost any other city in the nation.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday showed that prices in Minneapolis, Detroit and Chicago rose by 2.5 percent, well ahead the one percent average increase between May and June.

The average increase was up 4.2 percent from a year ago, according to the index.

BUT .......

But prices are expected to fall through the rest of the year now that demand has faded.

Home prices nationally were up 4.8 percent in the second quarter compared with the first quarter. That was largely because buyers could take advantage of government tax credits of up to $8,000.

Home sales have dropped sharply since those incentives expired.

Read the rest of the story By BOB VON STERNBERG, Star Tribune

Homeowner subsidies have only delayed the day of reckoning.

Today, despite the array of federal programs, prices have declined almost 30% from their peak, the banks had their crisis, and, without a real estate bubble, housing is no longer a driver of GDP growth. The game of taking cash out of a refinancing during a bubble market is over, so housing is not likely to drive consumer spending.

Read more published in the Wall Street Journal

Mpls. home sellers cutting prices

With pending home sales down sharply in July, sellers in Minneapolis are offering price reductions more often than in any other U.S. city. With sales down, the inventory of houses on the market is growing.

A picture of the post-tax-credit housing market is emerging, and it isn't pretty.

Reports released Wednesday showed pending home sales in the Twin Cities down, the inventory of houses on the market growing and sellers in Minneapolis offering price reductions more often than in any other U.S. city/

Read the full article By JIM BUCHTA, Star Tribune

Home Prices Are Firming

The trend in firming home prices solidified in the second quarter with more metropolitan areas showing increases from a year ago, aided by a surge in home sales driven by the home buyer tax credit, according to the latest survey by the National Association of REALTORS®.

In the second quarter, 100 out of 155 metropolitan statistical areas (MSAs) had higher median existing single-family home prices in comparison with the second quarter of 2009, including 14 with double-digit increases; two were unchanged and 53 metros showed price declines. In the first quarter of this year 91 areas had higher prices, while only 26 MSAs experienced annual price gains in second quarter of 2009.

The national median existing single-family price was . . .

To read the full story published in REALTOR Magazine

For sale: The nation’s best views

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To view the views go to MSN Real Estate

Twin Cities fare well in monthly home price report

Metro area home prices rose 2.8 percent in May, but a housing recovery is still elusive.

Home prices in the Twin Cities metro area rose faster than anywhere else in the nation -- 2.8 percent -- from April to May, according to the Standard & Poor's Case-Shiller report released Tuesday.

Nationwide, prices rose 1.3 percent for the same period . . .

Read the complete article By JIM BUCHTA, published in the Minneapolis Star Tribune

Pricing forward

Understand "forward pricing.” When pricing your home — the first step in the negotiation process — "don’t simply take what the last home in the neighborhood sold for and make that your price,”

Instead, use forward pricing: If homes in your area are appreciating by, say, 10% annually, and the last comparable home sold six months ago for $300,000, then yours should be priced at $315,000 (half of 10% of $300,000 equals $15,000, which is the amount that should be added to "forward price” for this home).  "That’s pricing it forward to the current market,

What if homes in your area are depreicating?  If the last comparbable home sold six months ago for $300,000 that price is no longer the current market; you should be priced at $270,000.

Both examples are pricing it forward to the current market.

Price Gains Overshadowed by Lagging Housing Demand

May of this year marks the first time since August of 2005 where we've had five consecutive months of year-over-year median price increases. However, pending sales figures declined sharply in May. It is clear that the tax credit party is over and the hangover has truly set in.

The May median sales price for the Twin Cities 13-county metropolitan area was $175,000, a 6.1 percent increase over last May, but the only segment of the market where prices actually increased was the lender-owned (foreclosure) submarket. Traditional and short sales both posted year-over-year price declines.

New listings were down across the board; pending sales were down for every category except short sales—which were up 28.4 percent over May of last year.

The median sales price of traditional homes (excluding foreclosures and short sales) in May was $198,000, down $12,000 or 5.7 percent from the $210,000 figure posted last May. The foreclosure sales price showed a welcome 7.6 percent increase to $125,000, while short sale properties posted a 7.0 percent decline to $143,250.

There were 3,910 signed purchase agreements in May, a decrease of 24.6 percent from last year. That is the greatest year-over-year decrease since April 2006. Seller activity also slowed considerably, with 6,335 new listings posted. This represents a 22.4 percent decrease from last May. In fact, by year-to-date figures, there have been only 23 more pending sales so far this year compared to last.

Like many regions across the country, we saw an uptick in activity as the April 30 federal tax credit deadline approached. When the tax credit ended, buyers seem to have lost interest without the substantial incentive enticing them into the market.

In terms of year-over-year comparisons, housing inventory remained fairly constant in the Twin Cities. The 26,412 active listings for May weighed in at just 1.0 percent under May of last year. The supply-demand ratio increased by 11.0 percent to 5.05. This means that there are about 5 homes available per buyer for June.

 

Weekly Market Activity Report

Remember how we've been saying that the Twin Cities housing market has been getting successively slower in home sales every week since the tax credit ended? Umm, yeah, well that's still happening.

Pending sales for the week ending June 5 were another 57.0 percent behind the pace seen a year ago, dropping from 1,226 in 2009 to 527 today. This is the fifth consecutive week-to-week drop in signed contracts. While activity is down across the board, lender-mediated foreclosures and short sales are slowly increasing their market share of sales because traditional home sales have declined sharply. During this week last year, 37.8 percent of pending sales were lender-mediated; this year the share is 43.3 percent.

Thankfully, new supply is not growing in lock-step. The 1,521 new homes placed on the market for the most recent reporting week were 29.6 percent less than last year at this time. This has helped keep the Months Supply of Inventory metric at 6.9 months, down 9.3 percent from May 2009.

VIEW FULL REPORT | VIEW MORE RESEARCH REPORTS

Home sales contracts leap higher

Due to the extended homebuyer tax credit, the sale of existing homes rose sharply in Februarya widely watched industry report said Monday.

The National Association of Realtors' (NAR) reports Pending Home Sales Index rose 8.2% in February to 97.6 from a downwardly revised 90.2 in January. This is a 17% improvement over last year.

Does this signal the early stages of a second surge of home sales this spring? To read the complete article go to CNNMoney.com