A new national survey by Redfin, a national online real estate brokeage, shows that the number of house tours during September were flat, and that the number of offers made by Redfin clients posted the biggest monthly decline so far this year, falling 3 percent compared with last year.
Here's an explanation of what's happening from Aaron Drucker, Redfin's New York Market Manager:
"Today our clients are concerned about fluctuating mortgage rates as well as the government shutdown and debt ceiling battle. When people feel uncertain about their wealth and the economy, buying a home falls to the bottom of their to-do list.”
While that survey is only a narrow glimpse into what's happening in the broader, there's plenty of evidence that the local market is experiencing a slight slow-down. The latest weekly report from the Minneapolis Area Association of Realtors, which covers the 13-county metro area, shows that pending sales - an indication of future closings - were up a bit more than 2 percent compared with the same time last year. Trouble brewing in the market? Not necessarily, these weekly surveys can be heavily influenced by the weather, and are a reflection of a relatively small sample size.
In a sign of changing fortunes for the once-beleaguered exurbs, Meridian Land Co. received approval from the city of Otsego to revive a portion of a once-stalled housing development called Wildflower Meadows. The group will complete 28 single-family lots, which it will sell to Key Land Homes and Morning Sun Homes for construction of single-family homes. Meridian also plans to sell five finished lots to the builders
The project is near the intersection of Hwy. 101 and 70th Street Northeast in Otsego, an exurban community that suffered mightily during the housing crash.
Meridian acquired the develompent in late 2010 after the project hit the skids in 2009. Plans originally called for subdivision into 254 lots, but it was among 10 subdivisions that were liquidated when its owner, Rottlund Homes, succumbed to the housing downturn and went out of business.
The builders hope to have model homes in that development ready for the Parade of Homes Spring Preview.
If you saw my recent story ("Deep pocketed investor paying cash for hundreds of Twin Cities homes") about Invitation Homes, a division of Blackstone, buying once-distressed houses in the Twin Cities as part of a massive rental portfolio - and a hedge on the housing recovery, you'll be interested in a recent story that says the Oaktree Capital Group is preparing to put its portfolio of 500-plus, fully leased rental homes on the market, suggesting that the group is ready to exit the buy-to-rent business. Oaktree doesn't have any holdings in the Twin Cities, but this move might be a sign of things to come for other investors.
New data suggest that higher mortgage rates are having a very modest impact on home prices in the Twin Cities and beyond.
The oft-watched S&P Case-Shiller Home Price Index, which tracks repeat-sales of the same property in 20 major metropolitan areas across the country, increased 1.8 percent from June to July, and 12.4 percent compared with last year.
For the fourth month in a row all 20 regions posted monthly gains, but 15 regions and the 20-city composite showed that month-to-month price gains have begun to decelerate.
“Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing," said David Blitzer, chair of the Index committee. "The Fed’s announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favorable, impact on housing.”
The Twin Cities, which is often among the standouts in these national reports, didn't fare as well this time - it was among seven regions that saw slower annual growth rates, posting the biggest the largest annual decline in price gains with a 9.5-percent year-over-year increase in July compared with a 11.5-pecent annual increase in June. From June to July, prices in the Twin Cities were up 1.8 percent - in line with the national average.
On a quarterly basis, that index was 7.1 percent higher during the second quarter and 10.1 percent higher than the last four quarters.
In a blog post last week, the group's economist, David Blitzer, said that the report "could show a shift in home prices following the rise in interest rates in May and June."
The latest local market data that's available is from the Minneapolis Area Association of Realtors and its monthly market report. Here's a summary of that data for August:
House prices in the Twin Cities and beyond are on the rise because demand is strong and listings are in short supply, but there's another critical factor at play: Fewer homeowners are losing their homes to foreclosure, and that's reducing the number of heavily discounted properties that are hitting the market. The foreclosures are a serious drag on home prices, and this morning there was a good news on that front.
CoreLogic said that during July the average foreclosure rate in Twin Cities and across the county declined, an that the rate in the Twin Cities is well below the national average.
The average foreclosure rate in the metro was 0.94 percent, a decrease of 0.75 percentage points compared to July of 2012 when the rate was 1.69 percent. The national foreclosure rate, which was 2.43 percent during July, also declined.
The mortgage delinquency rate in the Twin Cities metro - an indication of future foreclosure sales and a measure of how many homeowners with a mortgage were 90 days more more delinquent - fell to 3.03 percent from 4.33 percent last year, representing a decline of 1.30 percentage points.
Here's a look at the national market, according to data released this week by several research groups:
Earlier this month I wrote a story that home sales in the Twin Cities metro increased 8.9 percent, this morning we have a report on the state's housing market during August showing almost-as-strong sales and a similar increase in prices.
The Minnesota Asssociation of Realtors (MAR) said that closed sales statewide during August were up 6.5 percent compared with last year, and with fewer heavily discounted foreclosure sales - and fewer options for buyers - the median price of all closings rose 14.3 percent.
MAR tracks sales in 13 economic development regions thoughout the state, and there were wild variations in sales and prices in each of those regions. In the Arrowhead region, for example, there were 379 sales, a 52-percent increase over last year. By contrast, the Southwest region reported a 24-percent decline in sales.
Such variaions in this report aren't unusual because the sample size in each region can be small and subject to statistical swings.
This pdf includes detailed reports on each of those 13 regions. And if you're really interested in how things are going statewide, be sure to check out the year-to-date profile of each of those regions. The YTD numbers include a much larger sample size and thus fewer statistical variations.
And if you're interested in what's happening across the U.S., the National Association of Realtors released its August report showing a 1.7-percent increase in sales (seasonally adjusted) - the highest level in 6.5 years. Here's a link to that story.
On Thursday at 11 a.m. the Builders Association of the Twin Cities and the University of Minnesota's Cold Climate Housing program will unveil the Department of Energy Challenge Home, the first of its kind to be built the rigorous green standards set forth in the new DOE Challenge Home program.
The Cold Climate Housing program's Pat Huelman - he was also the Challenge Home facilitator - along with the home's builder, Amaris Custom Homes, will be on hand.
The house is #307 on the Parade of Homes Fall Showcase; it's at 1017 Oak Bluff Circle in St. Paul. Or click here for details about what makes this house special.