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.
Brad Fisher will succeed Greg Mason as president of Edina Realty Title. Mason was recently named president and CEO of Edina Realty Home Services. Fisher has been been the long-time manager of the Edina Realty Plymouth office and has been in the business two decades, including stints in sales, management and training. He signed up with Edina Realty in 1995 as an agent with the Wayzata office, and became manager of the Buffalo, Monticello and Delano offices in 1996.
“I’m very excited for the opportunity to lead Edina Realty Title as we continue to grow our market share,” said Fisher “Our customers can really benefit from the wealth of top-notch products and services offered by the Edina Realty family of companies.”
Fisher served a two-year term as president of the Minneapolis Area Association of Realtors and has been a member of the Professional Standards Committee of the Minnesota Association of Realtors since 2010. Fisher graduated from the University of Minnesota with a bachelor’s degree in economics, and was born in Minneapolis and grew up in several Twin Cities area suburbs. He's lived in Independence for 22 years with his wife and son, where he serves on the Independence city council and as a member of the planning commission.
Here's what you need to know about a handful of interesting mixed-use projects at various stages of development in Minneapolis:
How much salary do you need to buy an average house in the Twin Cities and the other top 25 markets in the nation? HSH.com wanted to find out, so they put together a list that looks at the salary you'd have to earn to afford the principal and interest payment on a median priced home in the top 25 markets nationwide.
The Twin Cities, where a buyer would have to have a $33,800 income to buy a $197,000 house, was No. 12 on the list. The required salary in the Twin Cities fell more than $3,300 from the previous quarter because interest rates and home prices were down slightly.
Cincinatti was No. 1 at $19,435, and not surprisingly, uber-pricey San Francisco was last with a required income of $115,510. Check out the rankings for the other cities by clicking here.
Ever dream of ditching your job in the city and retreating to the woods and water? Here's your chance. The Cascade Lodge on Lake Superior - the largest freshwater lake in North America - is now on the market. For $2.7 million you get a main lodge with 10 rooms and 1 suite, along with 11 cabins, a four-unit motel, a creek chalet, a private residence and a restaurant/pub. The listing includes 13 acres and 500 feet of Lake Superior shoreline.
Bruce Zeller of Lakeplace.com has the listing, click here for a complete photo tour of the property.
Fannie Mae announced a new program today that offers homebuyers in Minnesota and 26 other states up to 3.5 percent in closing cost assistance when they purchase a HomePath property during what's known as the FirstLook period. Here's how Fannie describes the program: