Brutal weather and a dramatic decline in foreclosure and short sale listings put the brakes on homes sales in the 13-county metro area last month, according to a new report from the Minneapolis Area Association of Realtors. Here are the highlights:
The quote that sums it all up: “It was an interesting month,” said Emily Green, president of the Minneapolis Area Association of Realtors. “While the market shifts back toward where it was before the bubble, we expect to see foreclosures and short sales become less prevalent, which can dilute overall numbers. Then you have the weather.”
To commemorate National Grammar Day (it was March 4), Redfin teamed up with the grammar experts at Grammarly, an automated online proofreader, to see if grammar mattered to home buyers. Here's what they found:
Here's what Seattle Redfin agent Chad Dierickx had to say about the survey: “When buyers are browsing homes for sale, everything about the listing has an impact on their experience,” he said. “Photos grab your attention, but the listing description fills in the gaps by helping a buyer understand what photos can’t."
And Allison VanNest at Grammarly, : “A home listing filled with misspellings or grammar errors sends a signal to potential buyers that details are not important.”
Here's a link to the complete survey, but I'm interested in the funniest/worst real estate listing misspellings you've run across. Include them in the comments section of the blog.
An Eagan office tower that used to be the home of Blue Cross and Blue Shield of Minnesota is about to get a major make-over. St. Paul-based Interstate Partners has the 10-story tower and adjacent parcels under contract, and they plan to convert the tower into 112 rental apartments. Phase Two of the project will be construction of an additional 90 apartments and 30,000 to 40,000 square feet of retail along Yankee Doodle Road near Town Centre Drive, according to Interstate Partners partner, Lonnie Provencher.
The project received the first of three city approvals last night - a comprehensive guide plan amendment. The property is now owned by Open Space LLC. Provencher said that he hopes to begin construction by the second quarter. Conversion of commercial space into housing isn't unusual, but very fewer office tours are suitable for such conversion. Provencher said that this building is perfect for such use because it has big windows, appropriately located elevators and "amazing" views of downtown Minneapolis and St. Paul. The most notable example of such a conversion was the transformation of a high-rise office building in Minnetonka into the Cloud 9 Sky Flats in 2006.
Redfin, a Seattle-based real estate brokerage, hopes to woo Twin Cities home buyers and sellers with a
discounted commission structure and a focus on customer service. The company said today that it has officially opened up shop in the Twin Cities, but at least in the short term will function without a bricks-and-mortar operation. The company has already been working with several Twin Cities-based "referral agents" who work for other brokerages, but announced the hiring of Chris Prescott, who has worked the real estate market in the Twin Cities for more than 20 years.
Prescott will be Minnesota market manager, and was most recently a partner in a local company that created marketing and social media programs for more than 200 local and national real estate agents. "When I heard that Redfin was coming to Minnesota, I knew that I had to be part of their mission to change real estate here in the Twin Cities," Prescott said. "After being in the business for 20-plus years, I am very excited about the opportunity to change the way real estate is done and make it better for buyers, sellers and agents."
Stay tuned for a story in the Wednesday Business section.
A new report adds more evidence to what we already know: Twin Cities home buyers hit the brakes towards the end of 2013. After several months of double-digit gains, the latest Standard & Poor's Case-Shiller Home price index for the Twin Cities posted a 9.7 percent annual increase during December.Though prices are on the rise, they increased at a much more moderate pace than they have during much of the year.
The Twin Cities index, which tracks repeat sales of the same house for a rolling three-month average, stood at 138.14, which means that housing prices have increae just over 38 percent since January 2000.
Across the country, the housing recovery lost momentumThe report's 20-city composite increased 13.4 percent - 30 basis points lower than the November rate - with sand belt states posting the biggest increase. Las Vegas, for example, posted a 25.5 percent year-over-year increase.
Here's what David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, had to say about the report: "The S&P/Case-Shiller Home Price Index ended its best year since 2005,” he said. “However, gains are slowing from month-to-month and the strongest part of the recovery in home values may be over. Year-over-year values for the two monthly Composites weakened and the quarterly National Index barely improved. The seasonally adjusted data also exhibit some softness and loss of momentum."
In mid January I reported that home prices in 2013 posted the strongest gains in five years, but that in December sales slowed dramatically. Many experts blame the slowdown on wintery weather that's made buying and selling less than appealing.
The latest report on declines in existing home salesduring January is just one of several indicators suggesting that the house market is slowing, raising concerns about the health of the market. Here's one perspective on that topic from a well-known national source, Jonathan Smoke, who is chief economist at Metrostudy:
"Economists were expecting a 4 percent decline in existing home sales released this morning by the National Association of Realtors (NAR), but the decline was worse at 5.1 percent. Some are saying that weather likely was responsible for at least 1 percent of the decline. Regardless of whether or not you buy into the weather causing some of the decline, the existing home market is looking healthier and healthier. Put another way—I’m not worried about the year ahead based on this data. We have more of a cushion going into the spring selling season than the US Women’s Hockey Team had in the final minutes of the third period yesterday. NAR has data on single family existing sales back for more than 45 years, and that long-term average is a monthly annualized rate of 3.52 million; January’s rate is 15 percent over that level. The abnormal level of investor activity is roughly 10 percent of the volume, so take away that and we still would be at least 5 percent above average in volume. A key underlying trend is that the existing home market continues to move towards a healthier mix as non-distressed, regular resales gain market share. Resales gained 10 percent in share over the course of 2013, rising from 66 percent of total existing home transactions to 72 percent at the end of the year as both foreclosures and subsequent REO sales declined. 2014 is seeing that trend continue as non-distressed regular resales now make up 74 percent of all existing home sales. Even if volumes decline with investors retreating, prices will get support from fewer and fewer heavily discounted distressed sales. When I couple that mix trend with demand shifting towards more established buyers and therefore higher price points, I wouldn’t bet on prices declining. And what did the January report tell us? Median existing home prices were up almost 11 percent over January 2013. When the decline in volume is mainly in the type of transactions you don’t want (distress), the decline is a good thing. Also, please resist the temptation to make the lazy observation that rising mortgage rates have hurt the housing market. I continue to believe that the rise in mortgage rates we have experienced is not having an outsized negative impact. Higher rates and continued tight credit, now potentially worse due to QM implementation, is no doubt limiting demand by shifting more of the market towards higher income and older buyers away from first time and entry level. But, remember this shift is going on while sales remain well above historical standards. The 30 year rate is up a full percentage point over last year, but the bulk of the increase came last spring and summer in fear of the taper. Since the taper actually began, the 30 year rate essentially hasn’t moved. What has moved? A higher share of home purchases made in cash and a higher share of mortgages with an adjustable rate. This shift to more adjustable mortgages combined with a profile of increasingly more credit-worthy, established buyers supports the finding that actual average mortgage rates on home purchases are up only 10 basis points over last year. So much for the headline 30 year rate rise wreaking havoc.