After months of discouraging signals, a flurry of monthly reports released this morning offer some positive news for the housing market. Here's a summary:
Long-awaited good news for the housing recovery: After several months of declines, existing home sales across the country rose 4.9 percent from April to May - a stronger-than-consensus gain, according to a monthly report from the National Association of Realtors and Wells Fargo Securities. Sales were down five percent compared with last year.
That national report, which is seasonally adjusted, doesn't include local data, but earlier this month we reported that home sales (not seasonally adjusted) in the Twin Cities increased nearly 26 percent from April to May, though May sales were11 percent lower than last year.
Trends of note:
We'll have the latest local data on July 14 when we report the June homes sales for the Twin Cities metro.
With home prices on the rise, fewer homeowners owe more than their houses were worth. A new CoreLogic report says that during the first quarter one in 10 Twin Citians, or 12.7 percent of all properties with a mortgage nationwide, were upside down on their mortgage. That's about 6.3 million homes compared to 6.6 million homes, or 13.4 percent, during the previous quarter. As a year-over-year comparison, the negative equity share was 20.2 percent, or 9.8 million homes, last year.
"Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year," said Anand Nallathambi, said CoreLogic's president and CEO. "An additional rise in home prices of 5 percent, which we are projecting will occur over the next 12 months, will lift another 1.2 million properties out of the negative equity trap."
The foreclosure crisis in Minnesota is nearing an end, but communities of color are still struggling to keep pace with the recovery. That's according to an annual report released this morning by the Minnesota Homeownership Center, which provides homeownership counseling, foreclosure prevention service and other support to Minnesota homeowners.
For example, in North Minneapolis prices have fallen so far that a homeowner who bought in 2006 at the neighborhood’s median price would need to see their 2013 home value increase by 85 percent to return to its purchase price. On the other hand, in Southwest Minneapolis, house prices have risen to pre-crash levels.
“This report gives us a clear understanding of how homeownership impacts communities – from safe neighborhoods and engaged citizens, to better educational achievement and health – as well as the barriers and opportunities that will influence our next generation of homebuyers,” said Julie Gugin, executive director of the Minnesota Homeownership Center.
This June, the Minnesota Homeownership Center and its network of nonprofit partners, the Homeownership Advisors Network, will offer free homebuyer education to potential homebuyers
Click here for info.
Is the housing market crashing? (Again?). In recent months there's been considerable and growing concern about whether weak year-over-year home sales in the Twin Cities and beyond portends an end to the housing recovery.
This week, in the latest weekly home sales summary from the Minneapolis Area Association of Realtors (MAAR), I spotted a bit of data that suggests otherwise: After six months of monthly, year-over-year declines in closings, there was a 0.1-percent increase in pendings for the week ending 5/10/14. That followed a a 0.7-percent gain for the week ending 4/12/14. Though not every inked deal makes it to the closing table, pending sales are an important indicator of future closings.
MAAR's data contains other clues that market fundamentals are improving in a quiet, but meaningful way. Specifically, the decline in closings is the result of dramatic weakness in foreclosures and short sales at a time when traditional buyers are stepping into the market at increasingly brisk pace. MAAR's data guru, David Arbit, said that during May, for example, traditional pending sales have been 21 percent higher over the past 12 months, while there has been 32 percent fewer foreclosure sales and 44 percent fewer short sales. The same thing happened during April.
The decline in foreclosure sales has triggered another interesting trend: There's been a dramatic decline in sales of homes priced under $150,000 and substantial increases in home sales priced above $150,000. Arbit said there were nearly 4,300 fewer pending sales priced under $120,000 during the 12-month period ending April 2014. "When you take out that many sales (many of which were distressed), the overall sales pie can shrink. But those sales represented a bitter and unwanted slice of the pie to begin with. Even so, when you get rid of that rancid slice, the overall pie does shrink but it also becomes a better, healthier pie." Anyone hungry?
Fast-fashion retailer H&M (short for Hennes & Mauritz) is opening a new store in Burnsville Center. Look for it this fall. The opening is part of a broader expansion by the Swedish company “in the North,” according to a news release Monday.
The 18,000-square-foot Burnsville store will feature clothing for women, men, young women and young men (or “young ladies and young men,”) kids, and a stores-within-the store for accessories, lingerie, maternity and plus-size. Since opening its first state-side store on Fifth Avenue in New York 14 years ago, H&M has expanded rapidly with some 311 stores nationwide.
Stores locally include Mall of America, Calhoun Square, Southdale, Maplewood, Woodbury Lakes and Ridgedale.