Just Listed brings you the latest news and information from the Twin Cities-area commercial and residential real estate market and beyond from veteran reporters Jim Buchta and Janet Moore.

Posts about Foreclosures

Minnesota is a hot bed for house flipping

Posted by: Jim Buchta Updated: January 31, 2014 - 9:48 AM

Minnesota was a hot bed for house flipping last year, according to a new year-end survey by RealtyTrac. The report shows that 6.6 percent of all sales last year were flips, which grossed those flippers an average of $62,000. Nationwide, 4.6 percent of all sales were flips with a gross of $58,000.

Minnesota was also one of several markets that posted the biggest declines in flipping from 2012 to 2013, with flips falling 9 percent; nationwide flips increased 16 percent last year.

A flip, by the way, is defined as a single-family home that is bought and subsequently resold again within six months.

The report also shows that the biggest increases in flipping happened on homes with a flipped price of $400,000 or more, with flipping on homes that sold for more than $400,000 increasing 36 percent from 2012.

 The average time to complete a flip nationwide was 84 days in 2013, down from 86 days in 2012 and down from 100 days in 2011.

Here's what Daren Blomquist, vice president of RealtyTrac, had to say about the situation: “Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase....for the year 21 percent of all properties flipped were purchased out of foreclosure, but that is down from 27 percent in 2012 and 32 percent in 2011. Meanwhile flipped homes were still purchased at an average discount of 13 percent below market value in 2013, the same average discount as 2012, indicating that investors are finding discounted buying opportunities outside of the public foreclosure process — particularly in those markets with the biggest increases in flipping for the year.”

Mortgage foreclosures & delinquencies in the Twin Cities continue to decline

Posted by: Jim Buchta Updated: January 22, 2014 - 11:15 AM

The foreclosure rate in the Twin Cities metro during November fell to 0.76 percent of all outstanding mortgage loans from 1.33 percent last year, according to CoreLogic. Nationwide, the foreclosure rate fell to 2.18 percent.

In addition, with the unemployment rate below the national average and home prices rising, fewer Twin Citians are having trouble paying their mortgage. The number of homeowners who are 90 days or more behind on their mortgage payment slipped to just 2.74 percent of mortgages compared with 4.02 percent last year - about half the national average.

At $3.8 million, no buyers for 'Jimmy Jam house,' so it's headed to auction block

Posted by: Jim Buchta Updated: January 14, 2014 - 2:09 PM

The house that's unofficially known as the "Jimmy Jam house" is headed to the auction block. The 22,000-plus square-foot house on Hardscrabble Circle went into foreclosure (Jam was NOT the previous owner) and has been on the market for four months. Listing agent, Scott Stabeck of the Stabeck Group at Lakes Sotheby's Realty in Wayzata, said that although the one-of-a-kind house (some say it would sell faster if on a California cul-de-sac during the early 1990s) has been a hot ticket for house shoppers - there were nearly 40 showings and two serious, but unsuccessful offers during those four months - JP Morgan/Chase has now decided it's time to get rid of it, and quickly.

The house that's unofficially known as the "Jimmy Jam house" is headed to the auction block. The 22,000-plus square-foot house on Hardscrabble Circle went into foreclosure (Jam was NOT the previous owner) and has been on the market for four months. Listing agent, Scott Stabeck of the Stabeck Group at Lakes Sotheby's Realty in Wayzata, said that although the one-of-a-kind house (some say it would sell faster if on a California cul-de-sac during the early 1990s) has been a hot ticket for house shoppers - there were nearly 40 showings and two serious, but unsuccessful offers during those four months - JP Morgan/Chase has now decided it's time to get rid of it, and quickly.

"People are intrigued by the house, and it will obviously be a deal," said Stabeck. "The land is worth $3 million alone, so it will basically be a free house."

The bank has hired Hudson & Marshall, a Dallas-based auction company, to work with Stabeck to host an on-site auction on Thursday, February 6. Bret Richards, sale manager for Hudson & Marshall (here's a link to the auction flyer), said that there is a reserve amount, but that's not public.

"The goal is not to give the property away, but to sell it at a fair price," said Richards.

What's fair will be determined by the bank that owns the house, and prospective buyers will have to arrive with a $2,500 cashier's check just to bid. The house will be sold as-is and there will be no financing contingencies allowed. The house is now listed at $3.8 million, but most recently sold for $7 million in June 2007. Its estimated market value is $6.4 million and annual property taxes alone are $95,000.

So here's a little more about the house: It is on 3.5 acres with 300 feet of Lake Minnetonka shoreline and has a 12-car garage, seven bedrooms and a sprawling home theater. The auction will be Thursday, February 6 at noon at the house. But there will be two open houses on February 1 and 2 from 1 to 3 p.m.

Minnesota, national home sales post big declines in November

Posted by: Jim Buchta Updated: December 19, 2013 - 11:05 AM

Home sales in Minnesota and across the country posted bigger than expected declines last month, according to two reports released this morning. 

In Minnesota, closings were down 9 percent compared with last year, according to the Minnesota Assocation of Realtors, and the National Association of Realtors said that seasonally adjusted sales across the country fell 4.3 percent compared with the previous month.

Despite those declines, the median sale price of all closings during the month increased 9.7 percent in Minnesota and 9.4 percent nationwide.

Check the Friday paper for a full report, or check out sales activity for all 13 economic development regions tracked by the state association by clicking here.

One in 10 Twin Cities homeowners owe more than their house is worth

Posted by: Jim Buchta Updated: December 17, 2013 - 12:16 PM

One in 10 Twin Cities homeowners with a mortgage owe more than their house is worth, but that's a significant improvement compared with earlier this year. That's according to the latest data from CoreLogic, which says that because of higher home prices, nearly 791,000 more residential properties nationwide returned to a state of positive equity during the third quarter of 2013, and the total number of mortgaged residential properties with equity currently stands at 42.6 million.

Still, nearly 6.4 million homes, or 13 percent of all residential properties with a mortgage across the country, were still in negative equity at the end of the third quarter of 2013. That's down from 7.2 million homes, or 14.7 percent of all residential properties with a mortgage, at the end of the second quarter of 2013.

In the Twin Cities metro, 9.9 percent, or 55,773, of all homes with a mortgage were in negative equity as of the third quarter 2013 compared to 13.3 percent, or 72,911 properties during the previous quarter of 2013. Of the top 25 metros in the country, homeowners in the Orlando metro-area are faring the worst, with nearly 33 percent of homes in negative equity.

Here's link to the full report.

Mixed messages about housing abound

Posted by: Jim Buchta Updated: November 26, 2013 - 11:43 AM

These are confusing days for anyone for clear signals from the housing market. A flurry of reports released this week shows what appears to be conflicting trends. Here's a summary of those reports:

  • The Case-Shiller house price index released Tuesday morning showed that home prices in 20 U.S. cities rose 13.3 percent during September following a 12.8-percent gain during the previous month. Nationwide, that was the biggest gain since February 2006. The Twin Cities index for September was up 10.1 percent year-over-year, and 0.8 percent over August. Compared with the other 20 cities, that was a moderately strong gain.
  • Also, Tuesday, the U.S. Census bureau said this morning that the number of building permits issued during October increased 6.2 percent to a seasonally adjusted annual rate of 1.03 million units, the highest since June 2008. Permits were up 13.9 percent compared with last year.
  • Another Tuesday report from CoreLogic said that foreclosure rates in Minneapolis-St. Paul-Bloomington decreased during September decreased 0.72 percentage points compared last year. That puts the rate of Minneapolis-St. Paul-Bloomington area foreclosures among outstanding mortgage loans at 0.83 percent compared with 1.55 percent last year. Foreclosure activity in region was lower than the national foreclosure rate, which fell to 2.29 percent.
  • On Monday, the National Association of Realtors said that pending sales - an indication of future closings -  dipped 0.6 percent during October. That was the fifth straight month of declines and the lowest level since December. There is generally a one- to two-month lag between a signed contract and a completed sale, suggesting that closings could continue to fall.

With pending sales falling, home prices rising and home building on the upswing, what's a news junkie to make of these numbers? The housing market is in the midst of a seasonal slow-down exacerbated by the government shut-down and higher mortgage rates. Indeed, low inventory is putting upward pressure on home prices - and the demand for new houses. But the unusually strong price gains are more a reflection  reflection of mid-summer investor purchases and big declines in foreclosure sales.

Here's a very good summary of the situation from David Blitzer, chairman of the index committee for Case-Shiller:  "Housing continues to emerge from the financial crisis: the proportion of homes in foreclosure is declining and consumers’ balance sheets are strengthening. The longer run question is whether household formation continues to recover and if home ownership will return to the peak levels seen in 2004.”

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