Brutal weather and a dramatic decline in foreclosure and short sale listings put the brakes on homes sales in the 13-county metro area last month, according to a new report from the Minneapolis Area Association of Realtors. Here are the highlights:
The quote that sums it all up: “It was an interesting month,” said Emily Green, president of the Minneapolis Area Association of Realtors. “While the market shifts back toward where it was before the bubble, we expect to see foreclosures and short sales become less prevalent, which can dilute overall numbers. Then you have the weather.”
Rising home prices have put a serious dent in the number of people who owe more than their house is worth in the Twin Cities and beyond. During the fourth quarter of last year 10.2 percent of all people with a mortgage were underwater, according to CoreLogic, a national real restate research firm. That's down from 16 percent last year, but up very slightly from the previous quarter.
Nationwide, nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity territory at the end of last year.
Negative equity happens when house prices decline and/or when mortgage debt increases. Across the country,the national aggregate value of negative equity was $398.4 billion for fourth quarter 2013, compared to $401.3 billion for third quarter 2013, a decrease of $2.9 billion.
Here's Mark Fleming's, CoreLogic's chief economist, take on the situation: "The plight of the underwater borrower has improved dramatically since negative equity peaked in December 2009 when more than 12 million mortgaged homeowners were underwater," he said "Over the past four years, more than 5.5 million homeowners have regained equity, reducing their risk of foreclosure and unlocking pent-up supply in the housing market."
After years of legal limbo and rumors about its fate, the unusual 22,000 square-foot house built by Jimmy "Jam" Harris is one step closer to a new beginning. Several weeks after a live auction that elicited multiple bids, JPMorgan Chase approved the winning bid of $2.6 million. Harris sold the Minnetrista house to Christopher and Sandra Hintz for $7 million in 2007 and soon after they stopped making their payments. The house, which is on 2.5 acres and is on Lake Minnetonka, went through the foreclosure process and had recently been on the market for several months for $4.49 million.
Listing agent, Scott Stabeck of Lakes Sotheby's International Realty in Wayzata, said that while he won't reveal the identity of the buyers, he said they plan to move into the house and fix it up as necessary. The deal is expected to close within 30 days.
Here's a link to a story about the auction and a link to a video tour of the house.
I recently reported that foreclosure rates in Minnesota had fallen dramatically last year, this morning CoreLogic is out with a new report that compares the Twin Cities to the rest of the nation. The news is good. During December the foreclosure rate in the Twin Cities metro fell to 0.70 percent from 1.28 percent last year compared with 2.09 percent nationwide.
Mortgage delinquencies, loans that were 90 days or more late, represented 2.70 percent of all outstanding mortgages compared with 3.93 percent last year.
Experts have largely attributed the gains to a lower unemployment rate, rising home prices and an increase in efforts to help struggling homeowners. While the news is good, foreclosure rates are still way above the national average, but expected to return to more normal levels in just a few years.
- Jim Buchta
Today the Mortgage Bankers Association’s (MBA) National Delinquency Survey showed that the percentage of loans in foreclosure nationwide has fallen for the seventh consecutive quarter to just 2.86 percent - the lowest level in six years.
Last week I reported that in Minnesota the foreclosure rate had fallen to the lowest level since 2005, accoridng to the Minnesota Homeownership Center. That's great news, but there are still parts of the state are still suffering mightily - especially some of the counties along the northern fringe of the 13-county metro. Here's a list of the top 5 counties - those with the highest percentage of foreclosures - over the past three years:
Sherburne Mille Lacs
Frigid temps and a shortage of listings helped keep home buyers on the couch last month, according to new data released this morning by the Minneapolis Area Association of Realtors. During January there were 2,536 home sales, a 12.8-percent decline compared with last year. Despite that decline, the median price of those sales increased 12.4 percent to $179,900 because there were far fewer foreclosure sales but a healthy increase in upper-bracket sales.
Though the slowdown in sales might suggest that buyer demand is stumbling, there are reasons to suggest otherwise. New listings last month fell 11.5 percent, leaving buyers with a dwindling number of choices. Sellers are still getting a high percentage of their asking price and houses are selling faster than they were last year - on average houses sold within 93 days , a 12.3 percent decline compared with last year.
“Would-be sellers have an opportunity to benefit from inventory levels and get ahead of the spring market if they list their property,” said Michael Hunstad, president of the Saint Paul Area Association of Realtors. “Buyers can also be ready to act on a purchase while good deals are available.”
We'll have a complete story in the Thursday paper.
- Jim Buchta