Here's a first look at the condo tower Jim Stanton of Shamrock Development wants to build at 8th St. and Portland Avenue in downtown Minneapolis. Stanton, always willing to take a chance, now owns the quarter-block site in the Eliot Park neighborhood just a couple blocks from the new Vikings Stadium where he plans to build a tower (designed by Oertel Architects Ltd in St. Paul) with about 15 floors and about 110 units.Though thousands of apartments are under construction in the city, only a couple solid proprosals have been presented. Stanton's plan has yet to make its way through the city and community approvals process, but Stanton is confident it will move forward this fall. He was the first developer to build new condos post-Recession in Minneapolis and the market responded favorably. At StoneBridge Lofts, which is along Gold Medal Park in the Mill District neighborhood along the Mississippi River, all but eight of the 164 units sold less than a year after the building was finished. Stay tuned for a full story in the Friday paper.
House prices in the Twin Cities and nearly every major metro in the country increased at a much more moderate pace during June, according to the latest S&P/Case-Shiller Home Price Indices.
In the Twin Cities metro, prices were up 6.7 percent compared with last year and just 0.6 percent compared with the previous month. On a seasonally adjusted basis, prices were down 2.3 percent from May to June.
A composite index of 20 metropolitan areas shows that from May to June prices increased 1 percent, but declined 0.2 percent on a seasonally adjusted basis. That index was up 8.1 percent compared with last year, but just 6.7 percent across the U.S.
It was the first time since February 2008 that all cities showed lower annual increases than the previous month, but the numbers were in line with expectations. Analysts say that more moderate price gains are a positive influence for the market because of the diminishing risk of a price bubble.
The closely watched report uses public records to track prices of single-family homes by comparing thousands of repeat sales of the same houses in each region.
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.”
Mortgage rates across the country dipped to the lowest level this year. Freddie Mac said today that the average 30-year fixed-rate mortgage averaged 4.10 percent for the week with an average 0.5 point compared with 4.58 percent last year, according to its weekly Primary Mortgage Market Survey. The previous 2014 low was 4.12 percent. Other rates this week:
Low mortgage rates have certainly helped boost home sales. The National Association of Realtors said today that existing-home sales last month increased 2.4 percent to a seasonally adjusted annual rate of 5.15 million in July from a slight downwardly-revised 5.03 million in June. Sales are at the highest pace of 2014 and have risen four consecutive months, but are still 4.3 percent below the 5.38 million-unit level from last July, which was the peak of 2013.
Here's what Lawrence Yun, NAR's chief economist, had to say about the situation: “The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market...more people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.”
In the Twin Cities metro, home sales have been down compared with last year. Closings during July were down nearly 10 percent (not seasonally adjusted), according to the Minneapolis Area Association of Realtors. Pending sales - an indication of future closings - for the week ended August 9 were down 1.3 percent compared with last year.
Cash sales in made up 34.4 percent of all home sales in the U.S. during May, the lowest share since May 2010 and down from 37.4 percent from the same month a year ago, according to CoreLogic. In Minnesota, cash sales represented 25 percent of all closings.
Those cash deals been falling since January 2013. But prior to the housing crisis, the cash sales share of total home sales averaged about 25 percen after peaking in January 2011 when cash transactions made up 46.2 percent of total home sales.
Who's paying cash? Buyers of real estate owned (REO) listings were most likely to pay cash, the represented about 55 percent of all deals. Buyers of existing houses paid cash 34 percent of the time and short sales represented 32.8 percent of all deals. New home buyers paid cash only 16.8 percent of the time.
Here's where cash sales were most common:
With house prices on the rise there were more home sellers than buyers in the Twin Cities metro during July, according to a monthly report from the Minneapolis Area Association of Realtors. Here are the highlights of that report (we're working on a full story for the Wednesday paper):