The number of Twin Cities-area homeowners who have a mortgage that exceeds the value of their house continues to fall. At last count, a bit more than 17 percent of all homeowners with a mortgage were underwater during the fourth quarter 2012. That's a slight decline from both the previous quarter and the same quarter 2011, according to CoreLogic, which tracks house prices throughout the country using public records. Here's a link to the full report.
The declines are a sign that rising home prices are reducing the number of underwater homeowners, a key step in unlocking more inventory and moving the market into balance.
At 17.6 percent, the Twin Cities was among the 10 metro areas with the lowest percentage of underwater homeowners. Across the country, 21.5 percent of all mortgaged houses were in negative equity territory, down slightly from the previous quarter. (Roughly a third of all homes do not have a mortgage).
While slight, that quarter-to-quarter decline has big implications for the broader market, meaning that about 200,000 properties returned to positive equity.
Values in the Twin Cities are improving better than average because the region's unemployment rate is falling faster than the national average. Income growth will bolster those gains.
Elevated levels of negativity equity have been a barrier to a stronger recovery, but they've also contributed to price gains. Homeowners who owe more than their house is worth are often unable to sell their home unless they're willing to agree to a short sale, or bring cash to the closing to make up the difference between what the owe and what a buyer is willing to pay. That's one of the reasons inventory is at the lowest level in a decade. At the same time, tight inventory means stiff competition, forcing many buyers to pay more than they might otherwise.
Twin Cities-based HomeServices of America took another step this week towards launching its new Berkshire Hathaway HomeServices (BHHS) brand by unveiling a new logo and sign. BHHS is a new a national real estate mega-franchise that is the product of a joint venture between HomeServices of America, Inc., the parent company of Edina Realty, and Brookfield Asset Management.
Along with Prudential Real Estate and Real Living, BHHS will be will be operated by a separate entity. While it’s the first time that Berkshire Hathaway’s Warren Buffett has lent his company’s name to a real estate brand, don’t expect to see the signs on lawns in the Twin Cities anytime soon.
The company will begin to roll out the brand later this year. HomeService’s Ron Peltier said that the cabernet and creme logo “embodies the spirit of Berkshire Hathaway.”
For the first time in several months, monthly home sales fell slightly in the Twin Cities metro. During February there were 4.7 percent fewer closed sales compared with last year, but pending sales - an indication of future closings - were up slightly. That's according to a monthly report from the Minneapolis and St. Paul Area Associations of Realtors.
Agents say that near-record low inventory - there was just a 2.9-month supply during February - has stifled sales by making it difficult for prospective buyers to find suitable listings.
Other highlights from the report:
Bonnie Velie is the new director of Coldwell Banker Burnet’s Previews-Distinctive Homes division.Velie, a longtime sales agent for the division, will replace Linda Blyth, who had been in the position for a decade.
Blyth, a 23-year veteran of the company, will retain her license, but plans to spend more time with her family. Velie will be responsible for the marketing, training and market analysis for CBB agents who list and sell properties priced at more than $500,000. She’s a former director of merchandising for Marshall Field’s/Target and has been an agent in the company’s Wayzata office since 2003.
With longtime top sellers including Barry Berg, Bruce Birkeland and Meredith Howell in its stable, the division is a powerhouse for the company. For CBB and other brokerages, the upper-bracket market has made serious sales gains in recent months
House price gains in the Twin Cities metro last year were among the best in the nation, according to the latest Case-Shiller house price index, which showed a 12-percent increase in the Twin Cities during December. That was the fifth-biggest among the 20 major metropolitan areas tracked by the group, and another indication that the recovery in the Twin Cities has been one of the strongest in the nation. Phoenix, where investors are driving the recovery, posted the biggest increase, while New York posted a slight decline. We're working on story for the Wednesday paper, but you can click here for the full report.
Also today, the Commerce Department released a report showing that new home sales during January were the best in nearly eight years. Here's a link to that report.
After a downward revision during December, national home sales posted a 0.4 percent increase during January for annualized rate of 4.92 million deals, according to data released Thursday morning by the National Association of Realtors. The report, which takes into account the seasonality of the market, said that the median price of those sales was up 12.3 percent to $173,600.
Economists were generally pleased. Here's what the experts from Wells Fargo Securities had to say this morning: "With a favorable outcome in looming fiscal issues, we continue to expect increased sales activity this year. indeed, this spring home buying season could surprise to the upside."
The trends were similar locally, but the gains were much stronger. Earlier this month we reported that the number of home sales during January increased 11 percent while the median price rose 14 percent to $160,000, according to a monthly report from the Minneapolis Area Association of Realtors.
In the Twin Cities and beyond prices are getting an unseasonable in some submarkets because inventory is tight. Locally, there was a 2.9-month supply of listings compared with 4.2-month supply nationally.
Stay tuned for the February report, which we'll tell you about on March 12.