A recent CoreLogic MarketPulse report provides a graphic look at a trend that you'd intuitively expect: Sales of expensive houses rise and fall with the stock market. The chart below shows the relationship between sales of $1 million-plus houses, which now represent about 2 percent of all sales, and the performance of the S & P 500. Not surprisingly, they follow they course. Here's a link to the full March report.
Twin Cities real estate agents say that a shortage of listings and harsh weather put a lid on home sales during March, but with fewer foreclosures in the mix and limited options for buyers in some areas, prices were up compared with last year. And those higher prices helped draw more sellers into the market. All of that is according to a monthly report from the St. Paul Area Association of Realtors. Here's a quick look at the Twin Cities housing market during March:
Warmer weather is expected to bring out the house shoppers this weekend, and agents are at the ready with thousands of open houses in all corners of the metro and in all price ranges.
Here's the top-priced listing that'll be open this weekend: 2400 Cedar Point Drive in Woodland is a private peninsula that's listed at $3.495 million (that's after $1.455 million in price reductions). The property, which includes 1,693 feet of shoreline, is listed by Ellen DeHaven of Coldwell Banker Burnet. The owner, according to county records, is US Bank. Here's a link to the listing. The open house is from 2:30 to 4:30 Sunday.
More than half the homes on the market in seven major American metros are unaffordable, raising the threat of a price bubble in those markets, according to a new Zillow analysis of home price data from across the country. Most of those at-risk markets are not surprisingly on the West Coast, including Los Angeles, San Francisco and San Jose.
No risk of a price bubble anytime soon here in the Twin Cities metro, where 31.8 percent of the houses on the market are unaffordable and 13.6 percent of their income is spent on their mortgage.
Nationwide, one-third of the houses on the market are unaffordable to the people who live in those cities based on the median area income.
The takeaway from the report is that as mortgage rates and home prices rise, affordability will wane, forcing families in those most-expensive markets to forgo buying or move far from the urban core where prices have become the most expensive. And Zillow says that if mortgage rates hit 5 percent, homeownes in the Twin Cities will spend 15.1 percent of their income on their mortgage.
Home builders in the Twin Cities metro are operating at the same pace as they did last year, but there' beena slight decline in requests to build apartments. That's according to a monthly report released today from the Builders Association of the Twin Cities (BATC), which shows that during the past four weeks 360 permits were issued to build 482 units.
Compared with last year, that was about the same number of single-family houses, but an eight percent drop in total units because of a decline in permits to build apartments and other kinds of multi-family housing.
Shawn Nelson, Builders Association of the Twin Cities 2014 president and president of New Spaces, said that buyers are being motivated by several factors.
“Prospective buyers are seeing prices rise, inventories decline, and mortgage interest rates moving upward, all creating a sense of urgency for families to make the decision to buy now,” Nelson said. “Reports from builders in our Spring Parade of Homes have been very positive,” said
Year-to-date, there were 1,028 permits issued for a total of 2,011 units. That's a t 1.5 percent increase in permits and a 20-percent increase in planned units.
Moundsview took over the top spot in permit activity for the month in activity, permitting 99 units in one multi-family building. Blaine and Plymouth both came in second with 30 units permitted, followed by Lakeville with 29 and Medina with 20.
Here's a link to the full report.
Home prices are increasing at a more moderate pace than last year in the Twin Cities and beyond, according to the latest Standard & Poor's Case-Shiller Home Price Index. A national 20-city composite for the month was up 13.2 percent compared with last year; the Twin Cities saw a 9.4-percent gain.
Here are some highlights from the report:
Twelve cities and the 20-city composite saw their annual rates worsen.
The 20-city composite posted its third consecutive monthly decline of 0.1 percent.
Las Vegas had the biggest annual gain (24.9 percent), but is still the farthest from its high set in August 2006.
Cleveland had the lowest annual gain (4 percent)
Here's what David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, had to say about the decline:
“The housing recovery may have taken a breather due to the cold weather....expectations and recent data point to continued home price gains for 2014. Although most analysts do not expect the same rapid increases we saw last year, the consensus is for moderating gains. Existing home sales declined slightly in February and are at their lowest level since July 2012.”