Furthering a trend that begin in early 2011, new home sales across the country increased to a 454,000-unit annualized pace last month, with year-over-year prices posting the strongest rate on record, according to new data from the U.S. Census Bureau.
Economists at Wells Fargo Securities say that a 2.3 percent increase in sales from March to April exceeded analyst expectations. On a year-over-year basis, sales were 27 percent higher last month.
Here's the take from Wells: "Lean inventory levels and lessening competition from distressed properties continue to be a positive development to new home prices, which surged to a record-high and are up 14.9 percent year-over-year. Moreover, this impressive price gain also reflected the increase in sales of homes costing $400,000 or more as the purchases of homes priced less than $300,000 fell on the month."
The U.S. report doesn't include local or statewide new home sales data, but here's what Ryan Jones of the Twin Cities office of Metrostudy had to say about the state of the local construction industry in his quarterly report (reported here at JustListed earlier this month): The Twin Cities area started 1,135 new homes in 1Q13, down 13 percent from 4Q12, but up 53 percent from 1Q12 when just 740 homes were started.
"For the fourth straight quarter the Twin Cities housing market surpassed 1,000 new home starts for the quarter," said Jones.
The rate of annual new home starts for single-family and townhome units across the Twin Cities area is at 5,022 new units. This is an increase of 56 percent compared to 2012 and represents the highest annual starts pace since 2008. "The new home market is continuing to show consistent growth with annual increases in new home demand occurring in each of the last seven quarters, "said Jones.
Home sales in Minnesota and across the country are being stifled by a shortage of inventory, though sale prices continue to rise, according to a pair of state and national reports released this morning.
In Minnesota, existing home sales increased only 0.3 percent from April 2012 to April 2013, according to the Minnesota Association of Realtors. The median price of those sales increased 12 percent to $165,000 largely because of a decline in foreclosure and short sales, and growing competition in some markets.
The National Association of Realtors said that across the country home sales during the month increased 0.6 percent to a seasonally adjusted annual rate of 4.97 million from March, but were 9.7 percent higher than last year. The median price of those sales was $192,800, up 11 percent from last year.
Though national sales are the highest pace since November 2009, it was a disappointing report considering the strength of the recovery. In Minnesota and beyond, buyers have become increasingly active - and aggressive. Mortgage rates remain near record lows, and a shortage of listings is causing an outbreak of bidding wars in some of the most popular markets.
However, sellers haven't kept pace with buyers. New listings across the country fell 13.6 percent short of last year, while the overall inventory of houses for sale was up 11.9 percent by the end of April. Supplies of inexpensive, entry level houses are extremely tight.
“The robust housing market recovery is occurring in spite of tight access to credit and limited inventory," said Lawrence Yun, NAR's chief economist. "Without these frictions, existing-home sales easily would be well above the 5-million unit pace."
In Minnesota, new listings rose only 0.8 percent, while total inventory fell nearly 14 percent.
Moss & Barnett, a longtime Minneapolis law firm, has signed a long-term lease in Fifth Street Towers.
About 160 employees will move from Wells Fargo Center in downtown Minneapolis to the new digs at 150 S. Fifth St. T The new lease begins August 2014, although more-detailed terms were not released.
Fifth Street Towers was sold for $111 million last year to a joint venture formed by Zeller Realty Group of Chicago and Invesco Real Estate, in Atlanta. Since then, the 1980s-era buildings have been renovated.
The move will permit the 100-year-old law firm to design space that better suits its office needs, said Thomas Shroyer, its president and CEO, in a statement.
“We designed our existing space over 25 years ago, when we had a much higher ratio of support staff to attorneys, when commercial use of the Internet was just a rumor and when there was little opportunity for lawyers to work remotely,” Shroyer said. “Technology has permanently changed the workflow in a law firm and reduced space needs. We will use about 30 percent less space while providing the same level of excellent service to our clients.”
In the past three years, Moss & Barnett has seen strong growth in its core practice areas and some of the best financial results in its history, Shroyer said.
“We expect that the favorable terms of this new lease will provide a strong foundation for continued success,” he added.
Tina Hoye and Russ Nelson of Nelson, Tietz and Hoye represented Moss & Barnett in the lease negotiations.
Janet Moore covers commercial real estate for the Star Tribune.
It's been a busy week, and a few things piled up. Here are some items from your blogger's email bag:
Minneapolis-based RJM Construction recently began renovations for the Bush Foundation and for Minnesota Philanthropy Partners in St. Paul's US Bank Center. Work on the 32,000-square-foot office space, located at 101 E. Fifth St., will be complete by August.
RJM will rehab the 23rd floor for Minnesota Philanthropy Partners' 65 employees, and the 25th floor for the Bush Foundation's 50 employees. The 24th floor will be renovated as shared space for the two.
Other project partners include property manager Cassidy Turley and architect HGA.
A 27-building portfolio of industrial properties in the Twin Cities has been listed by Colliers International.
The properties are located in a seven-city area, including Edina, Minnetonka, Eagan, Burnsville, Bloomington, New Hope and Fridley. They can be purchased as a complete portfolio, in groups, or individually. Each property is worth an average of $2.3 million.
Tim Prinson, senior vice president for Colliers in Minneapolis-St. Paul, said in a statement that the portfolio has "only been available as a whole, something only large investors would be able to acquire. Now that they're available individually, smaller, local investors can take advantage of these great properties in outstanding locations."
Another project that has broken ground is the Deephaven Woods Senior Living complex. Located on the campus of the Church of St. Therese in Deephaven, the two-story development consists of 78 unites of independent, assisted living, memory care and care suite apartments, with on-site amenities that include a chapel, heated underground parking, outdoor patios, porches, gardens and walking paths.
The church has partnered with Ebenezer Society to form a joint venture to build Deephaven Woods. It is being constructed by Minneapolis-based Kraus-Anderson.
Janet Moore covers commercial real estate for the Star Tribune.
Among the many, many real estate tid-bits that come my way from Zillow, here's one that's worth a second look:
Zillow said that in Twin Cities metro, buying is a better financial decision if you plan to live in the home for at least 2.6 years. That's a metro-wide average, and the decision varies dramatically from community to community based on housing expenses. For example, the break-even point ranges from a high of 4.6 years in North Oaks to 2 years in Brooklyn Center, with 87 percent of cities only requiring you to live in the home for 3 years or less before buying becomes more financially advantageous than renting.
Here's a link to the full report, which you can search by metro area, city and zip code.
It's been a challenging eight years to be a real estate agent, and thousands across the country have left the industry or taken on part-time work to help supplement income lost when the housing market crashed. A new report, however, shows that with home sales on the rise, agents are finally earning more.
The median gross income for the average Realtor last year was $43,500 - a 25 percent from 2011, according to new data from the National Association of Realtors (NAR). During the same period, the median sale price of all closings in the metro was just shy of 12 percent. For agents, that was the second year of gains after nine consecutive years of declines.
Do these figures seem to surprising? Should agents earn more? Less? Share your thoughts, but be civil.