Home prices in the Twin Cities and beyond continue to rise, but at a much slower pace. The latest S&P/Case-Shiller 20-city composite home price index showed home prices during November fell 0.1 percent from the previous month, but rose 4.7 percent compared with last year.
Prices in the Twin Cities metro fell 0.7 percent from October to November, but were up just 1.5 percent from November 2013 to November 2014.
This natonal report paints a more dour picture of house prices than the local report, which has shown annual median prices increases of 5 to 8 percent depending on the month. The discrepancy is all about statistics. Case-Shiller is an indexed, three-month average that compares repeat sales of the same house. The local report is a median based on all sales that happened during the month.
There was better news today about new home sales. A national report showed that new home sales in December rose to the highest level in more than six years, increasing nearly 12 percent from November to December. Here's a link to that report from the U.S. Census Bureau.
The Fifth Street Towers in downtown Minneapolis have been sold for $154 million, marking the first major real estate sale in the city this year.
The buyer is a limited liability company of California-based PIMCO, a global investment firm. The seller, a Texas-based LLC joint venture between Zeller Realty and Invesco, finalized and filed the sale Friday, according to a certificate of real estate value.
Built in 1984 and 1988, the towers stand 25 and 36 stories tall, respectively. The two towers include more than 1 million square feet of skyway-connected space.
Hennepin County values the property at $112.3 million, according to tax information.
The last private sale of the property was in 2007 for $186.4 million, according to Hennepin County records.
PIMCO has not yet returned phone calls.
Mortgage interest rates fell for the third consecutive week, and borrowers have taken note - mortgage applications surged last week mostly because of an increase in refinancing activity. The 30-year fixed-rate mortgage averaged 3.66 percent during the week ending Janary 15, the lowest level since May 2013 when it averaged 3.59 percent, according to Freddie Mac's Primary Mortgage Market Survey. It was also the first time the 15-year fixed rate mortgage dipped below 3 percent since the week ending May 30.
Lower rates are helping keep mortgage lenders busy, mostly with refinancings. Mortgage applications last week increased 49 percent from the previous week, according according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 9. That was the largest weekly gain since November 2008 with the refinance index increasing 66 percent to the highest level since July 2013.
Home sales in the Twin Cities metro sagged last year, but all other indicators improved. That's according to year-end data released this morning by the Minneapolis and St. Paul Area Associations of Realtors. Here are some of the highlights:
Month by month, here are the total sales going back to 2010:
Fewer of those sales in the same timeframe have been from foreclosures or short sales:
Finally, here’s the monthly change in the median sales price for homes since 2010.
Stay tuned for more details later today at www.startribune.com.
Americans love a bargain, but when it comes to buying a house, they don't always get the best deal. Only 47 percent of all Americans compared lenders when shopping for a mortgage, according to a surveyof 2013 mortgage applicants by the Consumer Financial Protection Bureau.
The group found that even seemingly insignificant variations in mortgage rates can make a big difference in a family's finances. The esearch showed the rate on a 30-year fixed rate conventional loan could vary by as much half a percent point. The difference, for example, between a 4.0 percent and 4.5 percent interest rate translates into a savings of about $60 per month. Over the first five years of the mortgage, that saves about $3,500 in mortgage payments. And the lower interest rate also means that you’d pay off an additional $1,400 in principal in the first five years. Always smart to remember that the cost of a mortgage goes beyond the rate, there are closings costs and other fees to consider. Here's a link to a helpful guide to shopping for a mortgage.
Have you recently attempted to comparison shop for a mortgage? If so, send an email to my colleague, firstname.lastname@example.org.
- Jim Buchta
Knollwood Mall is in the midst of renovation, which may have been just what the shopping center needed to attract a new suitor.
Heitman, a real estate investment management firm in Chicago, is purchasing the 60-year-old shopping center, according to St. Louis Park city officials. The chief executive of New York-based Rouse Properties revealed the sale's pricetag of $106.7 million during its third-quarter earnings report in November, but didn't reveal the buyer's name.
Knollwood was Rouse's only Minnesota real estate investment.
The mall, which sits near the northeast corner of Highways 7 and 169, is in the final stages of its $32-million makeover that is transforming it from an indoor to outdoor shopping center.
"We have executed a contract to sell Knollwood Mall upon completion of our redevelopment, demonstrating the value we are creating throughout our portfolio while recycling capital to reinvest in higher yielding growth opportunities," said Andrew Silberfein, Rouse's president and chief executive officer, in its third-quarter earnings statement.
Built in 1955, the shopping hub has survived multiple owners and disruptive trends in the Twin Cities retail market. The viability of the location is bolstered by its busy commercial neighborhood where the average household income is $93,000.
The property sale is expected to close this month, and possibly as early as this week, said St. Louis Park officials. Rouse and Heitman did not return phone calls.
Construction at the Knollwood shopping center has gutted the interior of the building. Knollwood Mall is undergoing a much-need facelift that involves converting the mall into a power-center, with stores accessible form the parking lot. Photographed on 6/20/14 by Bruce Bisping/Star Tribune.