Slides provided by real estate research firm 10K Research.

2009 Real Estate Residential Activity Report

Let’s be honest with ourselves on this one, home prices are still going to fall.

Les Christie from CNN throws out three basic reasons why home prices are heading lower: more foreclosures, rising interest rates and the home buyer tax credit coming to an end.

Here’s the proof in case your not a regular reader:

I have these live charts over on the side bar and you can view more cities here. Few cities are on the up and up by the way.

It’s been going on for a little over a year.

The Case-Shiller home price index came out for October, prices in Minneapolis dropped just a tick by a 1/2%, but overall the index increased for the 5th consecutive month. Weakness in the midwest region.

Take it for what it is, the data lags by 2 months. Will be interesting to watch over the next six months as the tax credit comes to an end, again.

At a quick glance, it looks like the days of throwing out an offer on a bank owned home with the hopes of them biting on a low ball purchase agreement are gone. List to sale price on these homes are now higher than traditional home sales and it just shows how competitive that segment of the market is right now. Days on market are also lower.

Inventory is also low, real low for foreclosures. Less than a 2 month supply of homes on the market in the Twin Cities.

Twin Cities Foreclosures & Short Sales Ocotober 2009

Not that I have been lazy with updating in the past week, just working on bootstrapping some other real estate related sites togtether which should be launched soon.

So I dug up last month’s skinny video courtesy of the Minneapolis Association of Realtors for a ‘hold me over’ post.

Alright, I’ll bite on the good news and rally ’round the cage like so many do when it comes to the barrage of ‘good’ news for the housing industry. Including but not limited to: home sales up and new home housing starts surprise increase.

One major metric was released in the past week and that was the S&P/Case Shiller Index in which 18 out of 20 metro areas saw an increase month over month. If your keeping track, that’s the first increase in over 3 years.

The Nuts For Minneapolis

June 2009

Month to Month: Up 3.14% (Good Enough For 3rd best!)

Year over Year: Down 19.82% (Not so good… 5th worst )

Remember that the index only looks at 20 metro areas and has a 2 month lag in data so it isn’t the best way to track data but it’s what everybody seems to go by these days. So next time we see this release, the numbers should look better.

So I guess the question is this, if you are a home buyer/investor… was the bottom missed?

Will have to wait for the next few months and the real sign will be after the housing tax credit expires. If this creates a rush for home sales, this type of activity that will push the market higher. Good for sellers finally but bad for buyers.

Usually around this time of year, it tends to slow down with home sales. The whole going back to school thing typically gets in the way, but with the $8000 home buyer tax credit set to expire in about 90 days and some solid news the rush is on to close by the November 30th deadline. Although talks of an extension in the credit is heating up again.

Not Out Of The Woods Yet

Still moving through all the defaults even though the numbers for sheriff’s sales where surprising lower so far in the first half compared to last year.

Actually from the Pioneer Press:

Nearly six out of every 100 mortgages in the state either were in foreclosure or more than 90 days past due at the end of the second quarter, according to the latest report Thursday from the Mortgage Bankers Association.

It seems like the sub-prime is for the most part over with delinquencies, but now moving into the prime given job loss and Alt-A loans resetting.

Possibly near the bottoming process, but take the slight increase for what they are. I still expect everything to remain flat for a few years to come.

From the press release of MPLS Realtors:

For the 13th consecutive month, there were more pending sales than there were a year ago. July saw 5,174 signed purchase agreements, up 16.0 percent from July 2008 and the strongest July showing since 2005. Of these sales, 43.6 percent were lender-mediated foreclosures and short sales.

Maybe a half-way decent recovery is on it’s way.

• Back to sustainable prices and a little bit of affordability
• Pending home sales are up for 3 straight months year over year
• Existing and new home inventories continue to fall (over 21% from a year ago)
• I haven’t seen any builders puking out inventory lately at a rapid pace circa 2007. Some are starting to post a profit again, see Toll Brothers first profit in 16 quarters.
• Mortgage apps have been up and down over the past few months so not quite stabilized.
• and throw in a little bit of affordability

The only thing missing is some decent job growth and how many homes the banks are sitting on. Mortgage defaults aren’t getting any less, just check the public notice section of your local paper.

Two Different Ends

There is definitely different things happening at each end of the market. The upper bracket continues to struggle and the lower end continues to see inventory shrink.

Gotta feel for the million dollar and up market though. A couple of months back it was 33 month supply of homes for sale and now that number has ballooned up past 40 months.

That can’t bold well after this report from CNN that for first time in 15 years homes sizes are shrinking. New homes are now about 7% smaller, so good luck selling those giants over 5000 square feet.

On the other end, homes continue to have strong sales throughout the lower-end mainly because of that housing tax credit.

Will have to see what happens over the next few months. Will a flurry of home purchases occur as buyers try to cram in purchases before the December 1st just last year around the same time as buyer’s hurried in before zero down disappeared.

Pic used from the housing supply outlook from the Minneapolis Assoc of Realtors

Just put a new interactive widget on the right hand corner of the screen that will predict the market over a 12 month cycle. Click on the button to enter the address of your property to see where it is heading.

Real Estate Market Forecast

Cyberhomes also has a section on their website called Market Forecast that allows home buyers or sellers to purchase reports based on real time market indicators that try and predict where the real estate market over the next 12 months.

Think of it as car fax report, before you buy a car you want one of these I hope to understand the complete history of the car. Well, before you buy a home wouldn’t it be nice to see what might happen in the next year or two before you buy? That’s exactly what Cyberhomes is providing, a report chalked full of helpful information to help home buyers make a better decision.

You can either get a summary report which is a 3 page report or a full report which really dives into market stats and gives a 24-month overview.

Don’t forget to check out the live real time data charts here

Twin Cities home prices have appeared to make a little turnaround on a metro wide. 12 straight months of year over year increased pending home sales is definitely a strong sign according to a report by the Minneapolis Association of Realtors.

From press release:

After increasing by $12,000 from April to May, the median sales price in the Twin Cities housing market jumped another $8,500 in June as traditional homes—those excluding foreclosures and short sales—again increased their market share, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

Lender mediated sales also continue to decrease with 41% market share still a lot and going back to yesterday’s posting, it looks like another wave of foreclosures is not far behind.

Inventory is down and anything under $250,000 is extremely competitive if priced right and in good condition. Bargain deals are also to be had on bank owned homes for home buyers wanting to put some work into a distressed property.

If your looking for other information check out the real time market data of Twin Cities home values here. You can get an idea of what is happening on a city level versus metro area as a whole.

It all goes back to location, location, location when it comes to median home prices. Even down to the neighborhood level.

graph used from Minneapolis Association of Realtors press released