Just Listed brings you the latest news and information from the Twin Cities-area commercial and residential real estate market and beyond from veteran reporters Jim Buchta and Janet Moore.

Posts about Foreclosures

House flipping fading fast, but highly profitable in Minnesota

Posted by: Jim Buchta Updated: August 22, 2014 - 10:23 AM

House flipping is fading fast. Across the country only 31,000 single family homes were flipped — purchased and resold within 12 months — during the second quarter, accounting for just 4.6 percent of all U.S. home sales, according to RealtyTrac. That's down from 5.9 percent in the first quarter and 6.2 percent during the same period last.

In Minnesota, 3.2 percent of all closings were flips, down from 4.3 percent during the previous quarter and 10.9 percent last. Those flips garnered an average $83,000 gross profit, an above average 51.9 percent return.

Nationwide, investors averaged a gross profit of more than $46,000 per flip, a 21 percent gross return on investment. That's down from 24 percent during the previous quarter and 31 percent last year - the peak in percentage return on flips since RealtyTrac began collecting their data.

“Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013,” said Daren Blomquist, vice president at RealtyTrac. “Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to.”

Flip tid-bits:

  • Flips took an average of 187 days to complete.
  • High-end homes represented an increasing share of homes flipped in the second quarter. Homes with a flipped sale price of $750,000 or higher represented 4.10 percent of all homes flipped during the quarter, up 21 percent from a year ago, while homes with a flipped price of $400,000 to $750,000 represented 12.66 percent of all flips, up 10 percent from a year ago.
  • Flips on homes priced below $400,000 declined as a share of all flips from a year ago.
  • The best returns on homes flipped in the second quarter were on homes with a flipped sale price between $750,000 and $1 million, yielding a 41 percent average gross return on investment.
  • Homes in the $50,000 to $100,000 range had the second best return at 37 percent, followed by homes above $1 million at 35 percent.
  • Flips happened most often in Phoenix (1,438 flips), Los Angeles (1,371 flips) and Miami (1,290 flips). Miami was the only one of the three metro areas to see its home flipping share increase from a year ago.
  • Markets with the best return on flips: Pittsburgh (106 percent), New Orleans (76 percent), Baltimore (73 percent), Virginia Beach, Va. (66 percent) and Daytona Beach, Fla. (63 percent).

Twin Citians falling behind on mortgage payments at less than half the national rate

Posted by: Jim Buchta Updated: July 23, 2014 - 9:05 AM

As I reported in a story in the Sunday paper, mortage foreclosures are nearing pre-recession levels, giving house prices a major boost. This week, CoreLogic gives us another glimpse into the situation with a report on mortgage delinquencies, which have been steadily falling since the beginning of the economic recovery. In May, the delinquency rate was nearly a full percentage point lower than last year and nearly half the national average - just 2.37 percent of all mortgages were 90 days or more late compared with 4.44 percent nationwide.  

Minneapolis-St. Paul-Bloomington, MN 90+ Day Delinquency Rate Foreclosure Rate
May 2014 2.37% 0.52%
April 2014 2.43% 0.53%
March 2014 2.49% 0.55%
February 2014 2.60% 0.61%
January 2014 2.67% 0.66%
December 2013 2.73% 0.72%
November 2013 2.75% 0.78%
October 2013 2.82% 0.81%
September 2013 2.88% 0.85%
August 2013 2.90% 0.87%
July 2013 3.06% 0.95%
June 2013 3.16% 1.01%
May 2013 3.22% 1.05%
April 2013 3.36% 1.08%
March 2013 3.53% 1.15%
February 2013 3.68% 1.16%
January 2013 3.83% 1.21%

Source: CoreLogic.

The lowdown on the upswing in Minneapolis development

Posted by: Jim Buchta Updated: July 16, 2014 - 12:47 PM

As the numerous construction cranes that dot the Minneapolis skyline suggests, the city is in the midst of a development boom fueled by a steady economic recovery. If you're interested in getting a better understanding of the many facets of the city's economy, click here to see "Minneapolis Trends," a 44-page quarterly review of socioeconomic and housing data. Below is an exerpt that focuses on housing.

Minnesota's busiest real estate agents sold foreclosures and dream homes

Posted by: Jim Buchta Updated: July 9, 2014 - 11:18 AM

Dream homes and distressed sales helped propel Minnesota's busiest real estate agents to the top of their class last year, according to an annual survey by Real Trends, a Denver-based real estate research company, and Trulia.com. That survey is completely voluntary, but is vetted to make sure that agents aren't over-reporting sales. Here's a link to the complete list of top agents/teams in Minnesota, but here are top three in each category.

Top agents by volume

  1. George Stickney, a Coldwell Banker Burnet agent who specializes in luxury listings in the western suburbs and Lake Minnetonka, sold $74 million.
  2. Chad Schwendeman, an EXIT Lakes Realty Premier agent who sells in the Baxter, MN area, sold $49 million - a good share of that was lakeshore.
  3. Bruce Birkeland, a Coldwell Banker Burnet agent who specializes in upper-bracket houses in the Minneapolis lakes neighborhoods, sold $43 million.

Top agents by transactions

  1. Jeremy Peterson of ReMax Results specializes in the south metro and had 256 sides.
  2. Jeremy Chubb, a 25-year old who sells for Epic Real Estate Services in Anoka, had 211 sides.
  3. Chad Schwendeman of EXIT Lakes Realty Premier had 210 sides.

Top teams by volume

  1. The Minnesota Real Estate Team, which has more than 50 agents working with Re/Max Advantage Plus, sold $250 million.
  2. John Schuster Team of Coldwell Banker Burnet, which has about a half-dozen agents who specialize in foreclosures, sold $93 million
  3. Brace Helgeson Team, which has about a dozen agents who specialize in the southwest suburbs for Coldwell Banker Burnet, sold $85 million

Top teams by transactions

  1. The Minnesota Real Estate Team of Re/Max Advantage Plus had 1,278 sides.
  2. John Schuster Team, which includes about a half-dozen agents with Coldwell Banker Burnet, had 490 sides.
  3. The Bruce McAlpin team, which includes two agents who specialize in Sherburne, Wright and Stearns counties for Edina Realty, had 455.5 sides.

A deluge of housing data

Posted by: Jim Buchta Updated: June 24, 2014 - 10:33 AM

After months of discouraging signals, a flurry of monthly reports released this morning offer some positive news for the housing market. Here's a summary:

  • The S & P Case-Shiller report says that house prices are rising, but at a more moderate pace. The group's 10-city and 20-city composites posted annual gains of 10.8 percent, significantly lower rate when compared to last month. Nineteen of the 20 cities saw lower annual gains in April than in March, but California (Los Angeles, San Diego and San Francisco) saw returns worsen by approximately three percentage points. Boston was the only city to see its annual rate improve. In the Twin Cities metro, year-over-year prices were up 9.4-percent and 1.1 percent from March. Here's the full report.
  • Sales of new single-family houses during May surged, according to a joint joint report from the U.S. Census Bureau and the Department of Housing and Urban Development. New homes sold at a seasonally adjusted annual rate of 504,000, 18.6 percent above the revised April rate of 425,000 and 16.9 percent above the May 2013 estimate of 431,000. The median sales price of new houses last month was $282,000. The seasonally adjusted estimate of new houses for sale at the end of May was 189,000. This represents a supply of 4.5 months at the current sales rate.
  • Fewer homeowners are falling behind on their mortgage payments. CoreLogic said this morning that in the Twin Cities metro the foreclosure rate among outstanding mortgage loans was 0.53 percent during April, a decrease of 0.55 percentage points compared to last year when the rate was 1.08 percent. Nationwide, the foreclosure rate stood at 1.77 percent. Also in the Twin Cities, the mortgage delinquency rate (mortgage loans that were 90 days or more delinquent) fell to 2.43 percent compared with 3.36 percent for the same period last year, representing a decrease of 0.93 percentage points.

How Twin Cities home sales during May compared with today's national report

Posted by: Jim Buchta Updated: June 23, 2014 - 2:40 PM

Long-awaited good news for the housing recovery: After several months of declines, existing home sales across the country rose 4.9 percent from April to May  - a stronger-than-consensus gain, according to a monthly report from the National Association of Realtors and Wells Fargo Securities. Sales were down five percent compared with last year.

That national report, which is seasonally adjusted, doesn't include local data, but earlier this month we reported that home sales (not seasonally adjusted) in the Twin Cities increased nearly 26 percent from April to May, though May sales were11 percent lower than last year.

Trends of note:

  • Single-family home sales have been gaining steam, rising 5.7 percent across the U.S.
  • Distressed sales - mostly foreclosures - have been dwindling, accounting for only 11 percent of all U.S. sales last month. Distressed transactions fell to 11 percent of total purchases, the lowest share since at least 2008. (Short sales accounted for 3 percent and foreclosures for 8 percent).
  • With more traditional buyers in the market and inventory still tight in most large metros, prices continue to rise. The median price of all sales last month was $213,400, a 5.1-percent increase over the previous year.
  • A shortage of entry-level houses and a tough mortgage market are making it keeping many first-time homebuyers out of the market, they accounted for only 27 percent of total sales.

We'll have the latest local data on July 14 when we report the June homes sales for the Twin Cities metro.

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