Housing Double Dip Is Coming
Twin Cities Housing Is Hurting:
Meredith Whitney, CEO of Meredith Whitney Advisory Group, LLC recently summarized the housing market to CNN as a mess, with lower prices on the way shortly.
I've consistently said that housing in the Twin Cities of Minneapolis/St. Paul and surrounding areas will decline 10-15% over the next 1 to 2 years. Ms. Whitney said housing will dip another 10% over the next 6 months. I believe this to be a comment regarding the national average. The Twin Cities of Minneapolis/St. Paul are typically above the national average when it comes to housing. Here are the reasons behind her comments:
1.) Banks have started releasing their inventory. This is the first time this has happened in the past year. More inventory comes back to the supply vs. demand simple economic outlook. More supply, less demand, lower price points.
2.) When it was reported that housing prices were up for the first half of 2010, it was not reported that 45% of the market was first time home buyers cashing in on the government first time home buyer tax credit. Those buyers are now gone.
3.) The mortgage market has had it's 9th consecutive month of shrinking volume. This statistic alone shows that not as many buyers are buying.
4.) Consumer credit is getting tighter. If buyers cannot be financed for a new home loan, they cannot buy.
5.) Unemployment is now the leading cause of mortgage defaults. In recent years, it was bad loans that restructured themselves that hurt homeowners. Now it is the unemployment that is causing homeowners not to be able to afford their homes.
6.) State and Local Government are actually cutting jobs. In years past, it was the State and Local Governments that would be hiring when the recession is close to an end. Since they are cutting, we can assume that they are not as optimistic as the current administration contends.
All said, there are many negative signs in our economy that are hurting the housing market. Until unemployment is solved, until the majority of the REO/Foreclosure homes are sold, and until there are some more lenient lending guidelines, the housing market it in for a plunge.
Twin Cities First Half Sales & Median Price Index
2010 First Half Sales Reported for the Twin Cities
The St. Paul Association of Realtors recently published the home sales data for the Twin Cities of Minneapolis and St. Paul. The following county home sale numbers and median home values can be found for the first half of 2010.
Dakota - Scott - Goodhue Counties
The most interesting fact when taking into account the numbers published in these reports is almost all areas saw an increase in the median home sales price (equal numbers of homes sold above and below the median price). I am a firm believer that these numbers are skewed because of the first time home buyer tax credits that have come to an end (The Military Tax Credit is still good). Recently published housing reports by MSNBC showed a huge dip in home sales starting in May, a month after the tax credit ended. These low home sales numbers most likely would not have closed by the dates the reports published by SPAAR above came out.
It will be interesting to see in mid January the final numbers for 2010. I would say that housing numbers will be lower than 2009, an indication that the Twin Cities Housing Market is still in a decline.
Tax Credit Closing Date Extended
Federal Tax Credit Closing Date - $8000 Credit:
Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed. The legislation is designed to create a seamless extension the new closing deadline for eligible transactions is now September 30, 2010. There is will be no gap between June 30 and the date the President signs the bill into law.
This will help many buyers in the Twin Cities and also nationwide who had an executed contract before April 30, 2010 that could not close by June 30, 2010. Many reasons could cause delay but most noted and probably the cause of most delays, are the short sales.
How Do Sellers Find A Realtor?
Sellers Are Finding Realtors In The Digital Age:
It was recently reported that nearly 25% of people in the market to sell a home find their agent on the Internet. This statistic is published by the St. Paul Association of Realtors. If you are reading this blog, you most likely found us at our Twin Cities Short Sale Realtor website. Many buyers also come here for news and resources on the Short Sale industry in the Twin Cities. We'd enjoy the opportunity to work with you and answer any questions that you have. Please contact us today!
25% of Sellers find their Realtor Online
Low Home Sales Reported
MSNBC Confirms June 17th Blog Post:
As I wrote on June 17, 2010, I believe home sales are headed even lower than they already are. As I watched the nightly news on NBC with Brian Williams, it was reported that new home sales in May hit a record low. In fact, new homes sales in May 2010 were down 33%. This can be attributed to the lack of potential buyers possibly due to the end of the government tax credit. It could also be due to the fact that the ecomony is poor right now. We have high unemployment and on the flup side, slow job growth.
As the inventory of homes in the Twin Cities remains relatively stable, the demand for homes is down. This will most certainly cause the prices to plumet even more. As more and more people find themselves in a predeicament with mortgage payments and either reductions in pay or job loss all together, short sales and eventually REO/Foreclosure homes will lead the charge of what sales there are.
If you'd like to discuss your options, please don't hesitate to contact us at the Twin Cities Short Sale Realtor.
Extremely Fast Short Sale Approval
Short Sale Submitted, Reviewed & Approved In 2 Weeks!
The Twin Cities Short Sale Realtor recently received an offer, compiled the short sale package, submitted the offer to the lender, and received a full approval within 14 days! The approval required no cash out of the owner's pocket and is a full satisfaction of lien, where no deficiency judgment will be pursued.
This is of course great news for the homeowner (seller) involved. The short sale process is typically much longer and these results are far better than the norm, even for the Twin Cities Short Sale Realtor.
Please contact us if you would like to discuss your current situation.
Twin Cities Short Sale Realtor Website Launched
TwinCitiesShortSaleRealtor.com was created to be your one stop resource if you're interested in short sales, or you would like to sell your home on a short sale. Throughout this website, you will find answers to your common real estate questions, external real estate resources available to you, and expert short sale knowledge that you expect and deserve.
One of the common misinterpretations of a real estate short sale is that if you list your home and get an offer, the lender will automatically take it. That couldn't be further from the truth. There are many steps required to request a short sale from your lender. To simply put it, we're the expert real estate agents that specialize in short sales and we can help you navigate the tricky waters of requesting a short sale from your lender.
We work in all areas of the Twin Cites of Minneapolis and St. Paul. If you're looking for answers to your short sale questions, or are looking to sell your home in any of the following areas, feel free to contact us today!