There is a growing concern in the real estate industry that there may be a problem with “Shadow Inventory”. Shadow Inventory is caused by Sellers that are holding off on selling until the real estate market starts to recover & prices rebound. Another form of Shadow Inventory is banks holding off on foreclosing properties until the market recovers. Obviously, the banks are taking a big hit when they are selling foreclosed properties in the current market. In an article in the January/February 2010 edition of The Residential Specialist, Rick Sharga, Senior VP at RealtyTrac Inc., an Irvine, CA foreclosure research form, stated that as many as 600,000 foreclosed homes are being held by banks. Not only do banks not want to take a hit on homes right now. There also has been a recent change in federal accounting rules that allow banks to hold these home at the values of 3-5 years ago, making the banks books look better. Wouldn’t we all prefer that our house valued at what it was 5 years ago. Some agents think that banks are even holding off on Sheriff Sales, figuring it’s better to have someone live in the house rather than a vacant house, even if the mortgage payments are not being made.
The current Foreclosure Inventory in the Twin Cities varies on area. According to the Mpls Area Association of Realtors, January, 2010 Lender Mediated properties (Bank Owned or Short Sale) comprised 28.9% of the Inventory on the Market. However, January Sales were consisted of slightly more Lender Mediated transactions than Traditional transactions (946 Lender Mediated sales / 942 Traditional sales). Whether Shadow Inventory is real or just a fallacy remains to be seen. I wish I had a Crystal Ball, but since noone does, we’ll all have to just wait and see.
Friday, February 26, 2010
Tuesday, February 23, 2010
Weekly Market Activity Report
The Twin Cities housing market in early 2010 looks pretty much like it did in early 2009. How similar? Over the last three months, there have been 7,189 signed purchase agreements; there were 7,186 a year ago during the same time period. Eerie, no? Robotic precision.
For the week ending February 13, there were 711 pending sales, down 2.7 percent from last year, and new listings posted 1,764 units, up 4.9 percent from a year ago. The only thing that's really changed much is the supply of available homes, which continues to dwindle relative to a year ago. The current stock of 22,271 available homes represents a 12.4 percent decline from a year ago.
The Twin Cities housing market in early 2010 looks pretty much like it did in early 2009. How similar? Over the last three months, there have been 7,189 signed purchase agreements; there were 7,186 a year ago during the same time period. Eerie, no? Robotic precision.
For the week ending February 13, there were 711 pending sales, down 2.7 percent from last year, and new listings posted 1,764 units, up 4.9 percent from a year ago. The only thing that's really changed much is the supply of available homes, which continues to dwindle relative to a year ago. The current stock of 22,271 available homes represents a 12.4 percent decline from a year ago.
Friday, February 19, 2010
The Skinny
Here's a video that Mpls Area Association of Realtors puts out monthly regarding the market in the Twin Cities.
http://www.youtube.com/watch?v=-MVVMZdxUpA
http://www.youtube.com/watch?v=-MVVMZdxUpA
Tuesday, February 16, 2010
MAAR Weekly Market Activity Report
The Twin Cities housing market at the beginning of 2010 continues to
look similar to the Twin Cities housing market at the beginning of 2009.
There were 1,848 new listings for the week ending February 6, a 3.8
percent increase from the same week last year. On a similar track,
there were 780 pending sales for the same week, 4.7 percent above
last year.
With supply dropping—now at 5.5 months of availability—it may be that
potential buyers are all too familiar with the inventory they have to
choose from, especially in the lower price ranges where sales have
been through the roof in the last year and inventory has dropped
quickly.
The Twin Cities housing market at the beginning of 2010 continues to
look similar to the Twin Cities housing market at the beginning of 2009.
There were 1,848 new listings for the week ending February 6, a 3.8
percent increase from the same week last year. On a similar track,
there were 780 pending sales for the same week, 4.7 percent above
last year.
With supply dropping—now at 5.5 months of availability—it may be that
potential buyers are all too familiar with the inventory they have to
choose from, especially in the lower price ranges where sales have
been through the roof in the last year and inventory has dropped
quickly.
Thursday, February 4, 2010
Weekly Market Activity Report
The January 2010 Twin Cities housing market has shaped up to be nearly identical to January 2009.
Pending sales are down slightly from a year ago, but not by much.
New listings are down slightly from a year ago, but not much.
Inventory is rising slowly, but not much.
After the roller coaster ride the local market has experienced over the last four years, perhaps "not by much" is a welcome respite.
There were 558 signed purchase agreements for the week ending January 23, down 2.3 percent from a year ago.
New listings posted 1,522 units, down 0.6 percent from a year ago.
The current inventory of active listings is 20,629, down 17.5 percent from a year ago.
The February 2010 Supply-Demand Ratio sits at 6.99, which means there are 6.99 homes available for each buyer. That's a drop of 8.5 percent from a year ago and the lowest February mark since 2006.
The January 2010 Twin Cities housing market has shaped up to be nearly identical to January 2009.
Pending sales are down slightly from a year ago, but not by much.
New listings are down slightly from a year ago, but not much.
Inventory is rising slowly, but not much.
After the roller coaster ride the local market has experienced over the last four years, perhaps "not by much" is a welcome respite.
There were 558 signed purchase agreements for the week ending January 23, down 2.3 percent from a year ago.
New listings posted 1,522 units, down 0.6 percent from a year ago.
The current inventory of active listings is 20,629, down 17.5 percent from a year ago.
The February 2010 Supply-Demand Ratio sits at 6.99, which means there are 6.99 homes available for each buyer. That's a drop of 8.5 percent from a year ago and the lowest February mark since 2006.
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