A new monthly report shows that house prices in the Twin Cities metro, including foreclosures and short sales, increased by 9.0 percent in March 2014 compared with last year,according to CoreLogic's House Price Indicator. From February to March house prices in the Twin Cities increased by 0.7 percent.
That was the ninth-biggest year-over-year gain among the nation's largest metro areas and only slightly below the national average, which stood at 11.1 percent.
CoreLogic's HPI is a unique look at what's happening to house prices because it tracks repeat-sales of the same homes over time, including single-family attached and single-family detached homes. Stay tuned for the April sales report from the Minneapolis Area Association of Realtors, which we'll publish here on May 12. That report will include closings, pending sales and a detailed look at what's selling in this area.
With house prices on the rise, the number of homeowners who owe more than their house is worth has been steadily declining - good news because more people are able to sell their houses without taking a loss. In Minnesota, only 9 percent of all homeowners with a mortgage are still "seriously underwater," which means the debt on the property is exceeds the property's estimated market value by 25 percent higher, according to a first-quarter report from RealtyTrac. That's compared with 17 percent nationwide and much higher averages in Sunbelt states, including Las Vegas, where the negative equity rate was 37 percent.
The report also reveals a somewhat troubling and surprising trend: 35 percent of all homeowners nationwide who are in foreclosure have equity in their home, a slight increase from last year and the previous quarter. Minnesota tied with the Boston metro-area for the highest level of foreclosures, topping out at 58 percent. RealtyTrac's Darren Blomquist's speculates that foreclosure equity is on the rise because homeowners aren't aware that they have any equity at all, so fail to attempt selling the house before it's too late.
“Many distressed homeowners with equity may not realize they have equity and in some cases have vacated the property already, assuming that foreclosure is inevitable,” he said.
I recently wrote that with home prices on the rise and the economy on the mend, the foreclosure crisis in Minnesota was nearing its end, and today there's more evidence that fewer Minnesota homeowners are headed towards that terrible fate. The Minnesota Homeownership Center issued a new report that says the number of preforeclosure notices sent during the first quarter fell 41 percent compared with last year. Though foreclosures are still happening all too often in Minnesota and beyond, the decline in notices is important because it's an indicator of how many houses will end up being sold at sheriff's sales.
Here's a graphic look at what happened:
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:
Twin Cities homeowners appear to be in far better financial shape than they were last year.
CoreLogic, a national real estate research firm, said that the foreclosure rate in the metro was 0.63 percent during January, a decrease of 0.58 percentage points compared to January of 2013 when the rate was 1.21 percent. Nationwide, the foreclosure rate dipped to 1.97 percent.
In many parts of the country house prices are rising faster than rents, making it difficult to find investment opportunities that will cash flow. A new analysis by RealtyTrac takes a closer look at where median home prices and average rental rates make for good — and not so good — returns on rental properties. That rental return, by the way, for each county is the gross rental yield, calculated by taking the 2014 fair market rent for a three-bedroom home multiplied by 12 (months) and then dividing that 12-month total by the median sales price of residential properties in the county. Here's what they found: