Tuesday, October 17, 2017

Where Are the Home Prices Heading in the Next 5 Years? | Simplifying The Market

Where Are the Home Prices Heading in the Next 5 Years?

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.4% over the course of 2017, 3.4% in 2018, 2.8% in 2019, 2.7% in 2020, and 2.8% in 2021. That means the average annual appreciation will be 3.22% over the next 5 years.
Where Are the Home Prices Heading in the Next 5 Years? | Simplifying The Market
The prediction for cumulative appreciation fell from 21.4% to 17.3% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 6.3%.
Where Are the Home Prices Heading in the Next 5 Years? | Simplifying The Market

Bottom Line

Individual opinions make headlines. We believe this survey is a fairer depiction of future values.

Monday, October 09, 2017

For the moment, at least, some Twin Cities home sellers are being forced to cut prices More sellers cutting their asking prices as the winter slowdown approaches.

By Jim Buchta Star Tribune October 7, 2017 — 11:04pm Twenty percent of all house listings in the Twin Cities metro had a price reduction as of August, twice as many as in the spring. The bulk of the markdowns are in the upper-bracket market. For five long years, the owners of a house at 2104 Kenwood Parkway — known for its appearance in the opening credits of “The Mary Tyler Moore Show” — waited for a buyer. Though the Minneapolis house was in perfect condition, exquisitely staged and on a picture-perfect street in a prime neighborhood, there was only one thing the seller could do to entice a buyer: Reduce the price. After nearly $1.5 million in markdowns — about half of the original list price — the seller finally hit the sweet spot and got not one, but two offers. The sale closed late last month. The Twin Cities home market is closing in on a record year of sales even while supply is extremely tight, giving sellers an advantage over buyers. But with winter just around the corner, the competition among shoppers is waning, making it the best time of year to be a buyer. That change is visible in the growing number of sellers who are cutting prices. Last week, sellers around the metro area offered discounts ranging from a $500 reduction on a $47,000 condo in north Minneapolis to a $505,000 discount on a $2 million architect-designed house on Sunfish Lake. In August, nearly 20 percent of all house listings in the Twin Cities metro had a price reduction, twice as many as this spring and the highest monthly share in two years, according to an analysis of local listing data. “It’s price or patience,” said Nick George, a sales agent. “The one thing we can change is price.” The bulk of the markdowns are happening in the upper-bracket market, where there’s the deepest supply of listings and the smallest buyer pool. Discounts are less common among the most affordable listings, which are most scarce. At the current sales pace, there are still only enough listings priced from $190,000 to $250,000 to last less than two months. And while a greater share of sellers offered a discount last month, those markdowns are slightly smaller than last year largely because buyers this fall have far fewer options than they did last year, putting buyers on the sidelines and stifling sales. During the peak spring buying season this year, buyers were essentially paying sellers all of their original asking price or more, according to data from the Minneapolis Area Association of Realtors. But last week George, who works on the east side of the metro, advised the owner of a townhouse in Oakdale to drop the asking price by $5,000 to $175,000 after it had been visited by 24 prospective buyers without getting an offer. He also had the owners of a two-story house in Woodbury cut the price from $460,000 to $450,000. “I’m not a fan of discounts,” George said. “I’m a fan of pricing a house right.” During the spring, both properties would have sold instantly at their original prices, he said. This fall, however, properties have to be in perfect condition, thoughtfully staged and professionally photographed to get the kind of price they might have commanded before the Fourth of July. While the trend might be troubling for sellers, this seasonal correction is a healthy hedge against another housing price bubble. “People are pulling back a bit; they’re saying ‘I’m going to wait this out,’ ” said Skylar Olsen, senior economist
. “The slowing down is a good sign.” Olsen said while homes in the bottom price tier are appreciating far faster than the top tier — which is why they are less likely to see price cuts this fall — there’s evidence that rising prices in the Twin Cities are slowing slightly after three years of unusually strong gains. The latest S&P CoreLogic Case-Shiller Minneapolis Home Price NSA Index, for example, still hasn’t exceeded the previous high set in 2007. That’s in contrast to the national index, which hit a new high last summer. “Sellers can still be confident, but be aware when you’re listing your home that there might not be the fervor that there was in the main selling season,” Olsen said. “Hopefully this a sign of more sane times to come.”

Monday, November 28, 2016

Millennials Still Chasing American Dream Despite Hurdles Posted on Nov 21 2016 - 11:07am by Housecall Surprising to some, millennials are all about chasing the American dream and owning a home of their own despite current market and economic setbacks. This infographic from FirstTimeHomeFinancing.com explains what's keeping millennials from pursuing their home-ownership dreams and outlines several programs that could help them achieve their goals.

Monday, July 06, 2015

Twin Cities Real Estate Update 1st half 2015

After nearly 10 years, home prices are within 6.3 percent of their record high seen in June 2006. We have been here before, but we are in a different environment these days. The labor market has benefited from the longest stretch of private job growth on record, the stock market is at all-time highs, corporate balance sheets have seldom looked this good, we have a more regulated lending environment, consumers are deleveraged, our population has grown and consumers are more cautious this time around. As we near “peak” pricing, there are several important items to bear in mind. First, this is not a brand new high in some foreign land, it is a return to where the market was 10 years ago but with better fundamentals (see above). Second—and as the chart suggests—if you assume that prices had followed their long term trend of increasing at 5.0 percent per year (nominal, not adjusted for inflation) as they have, we are still not back to where we would be assuming that rate of increase over the last 20 years. Third, this market is not fueled by irrational, unjustified speculation and exuberance—a leading cause of bubble-itus. Rather, it is fueled by low interest rates, rising rents, job growth, a diverse and robust local economy and slowly rising incomes. Those who remember paying $0.05 for a cup of coffee or a candy bar like to remind us: prices will rise. It is inevitable. To expect home prices not to follow that trend is unrealistic. Once home prices began recovering, it was only a matter of time before they surpass their previous peak. Given all the improvements we have seen in the market and economy, it is no surprise we are back to where we were. But this time, under much better circumstances. 13 6

Wednesday, November 13, 2013

Minneapolis St. Paul Housing Market November 2013

Minneapolis, Minnesota (November 12, 2013) – The Minneapolis-St. Paul metropolitan housing market continued along the path toward recovery in October. While some measures suggest a slowing in the pace of recovery, this deceleration is primarily the result of a healing distressed segment. Sellers felt more confident as new listings rose 15.1 percent to 6,102, marking the seventh consecutive year-over-year increase in monthly seller activity. Buyers closed on 4,495 homes, a modest 1.9 percent increase over last October. Consumers have 15,556 properties from which to choose – or just 3.7 percent fewer than last October, but 19.2 percent more than in January 2013. The market-wide median sales price was unchanged from September 2013 at $195,000, but was up 11.4 percent compared to October 2012. In October 2011, foreclosures and short sales together comprised 46.2 percent of all closed sales. In October 2013, these two segments made up only 21.5 percent of all sales. For new listings, the same October figure dropped from 42.4 percent in 2011 to 19.5 percent of all new listings in 2013. “The slight decrease in pending sales activity is entirely attributable to declines in the number of contracts signed on foreclosure and short sale properties,” said Andy Fazendin, President of the Minneapolis Area Association of REALTORS® (MAAR). Traditional pending sales activity was up 19.7 percent while foreclosure and short sale contracts were down about 33.7 and 50.8 percent, respectively. Closed sales increased 1.9 percent overall, but traditional closed sales rose 23.6 percent. Foreclosure sales and short sales were down 32.9 and 50.0 percent, respectively. New listings rose 15.1 percent overall, but traditional seller activity increased 39.0 percent higher as foreclosure and short sale new listings fell 24.4 and 50.1 percent, respectively. On average, homes are spending 75 days on the market – the quickest October pace in seven years. Sellers are receiving an average of 95.8 percent of their original list price – the highest October ratio since 2006. The Twin Cities metro now has 3.5 months’ supply of inventory, which suggests sellers are regaining their leverage. “We are within the final phases of market recovery,” said Emily Green, MAAR President-Elect. “Supply levels are stabilizing and regenerating, which means buyers have more choices and balance is being restored.” All information is according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from NorthstarMLS. MAAR is the leading regional advocate and provider of information services and research on the real estate industry for brokers, real estate professionals and the public. MAAR serves the Twin Cities 13-county metro area and western Wisconsin. 10K Research and Marketing, LLC is a wholly owned subsidiary of MAAR.

Monday, April 29, 2013

Less supply, more demand and rising prices are being seen in residential markets across the country. News about the housing recovery's fragility, housing trends have remained positive for well over a year now, and the road ahead looks bright with better lending standards in place. Ominous headlines may benefit advertisers and search engine optimization, but local consumers informed of local situations are in a better position to leverage the market. In the Twin Cities region, for the week ending April 20: • New Listings decreased 4.5% to 1,601 • Pending Sales increased 9.7% to 1,337 • Inventory decreased 28.4% to 13,258 For the month of March: • Median Sales Price increased 17.8% to $176,575 • Days on Market decreased 24.3% to 109 • Percent of Original List Price Received increased 3.1% to 95.0% • Months Supply of Inventory decreased 38.0% to 3.1 As I've been saying for the past 12 months, now is the time to buy with prices bottomed out and interest rates at an all time low. Regardless of whether you're financing or not, prices are expected to rise and a market correction could be occurring now. For any assistance with Real Estate in Minneapolis / St Paul or around the country, contact The Basil Group, Dan & Lisa Basil at (612) 280-5046. www.thebasilgroup.com

Friday, July 20, 2012


There’s a lot of good news that affects the housing market. Let’s take a look at the positive trends that impact residential real estate’s growth. Unemployment is Dropping - “We're actually seeing some better news on the U.S. jobs front,” said Jennifer Lee, an economist at BMO Capital Markets, in a note to clients. Unemployment aid applications have fallen for two straight weeks and is the largest two-week decline since February, she noted. ASSOCIATED PRESS, JULY 5, 2012 Interest Rates are at Record Lows - The average U.S. rate on the 30-year fixed mortgage stayed this week at the lowest level on record. Freddie Mac says the average on the 30-year loan was 3.66 percent and the lowest since long-term mortgages began in the 1950s. ASSOCIATED PRESS, JUNE 28, 2012 Rents are Rising - As rents continue to rise, owning a home is making more financial sense, according to recent surveys that show it’s cheaper to own a house than rent in the majority of metro areas nationwide. The National Association of Realtors (NAR) estimates that rents will rise 4 percent, on average, this year and another 4 percent in 2013. DAILY REAL ESTATE NEWS, JUNE 25, 2012 Home Affordability Index is at Record High - Housing affordability conditions for all buyers reached a milestone. The quarterly Housing Affordability Index rose to a record high of 205.9 in first quarter, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. This is the first time the quarterly index broke the 200 mark; record keeping began in 1970. NAR, MAY 16, 2012 First Time Buyers Get off the Fence - Low interest rates are prompting some first time home buyers to purchase sooner than they planned. Sellers are being more realistic with pricing, making it easier for buyers to get into areas that would normally be off limits. WASHINGTON POST, JUNE, 25, 2012 Inventory Levels are Down - As sales go up, inventories go down. New listings came in slower than last year but buyer activity has increased over year-ago levels. Buyers are confident in the current affordability picture, and some rents have increased to levels above comparable mortgage payments. Absorption rates, negotiating leverage and market times are all still metrics worth watching carefully. Some agents are reporting that more than half of their clients are in multiple offers. MAAR, JULY 2, 2012 Sales up, Prices Rising, New Construction Up • The housing market is looking better. Home sales are up from last year, home prices are rising in most cities and homebuilders are planning to break ground on more projects in the next 12 months. ASSOCIATED PRESS, JUNE 28, 2012 • Pending home sales climbed 5.9% in May 2012 and was 13.3% above May 2011 levels. MARKETWATCH, JUNE 27, 2012 As always, we appreciate your business and your trusted referrals of friends, family and business associates. www.thebasilgroup.com ~ Dan & Lisa Basil