Another bright spot in the real estate news.  This is particularly good news for vacation destinations, such as Florida or Arizona. 

Investment and Vacation Home Sales Jump

Sales of investment and vacation homes accounted for 38 percent of all home sales last year, the highest level since 2005, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR) 2012 Investment and Vacation Home Buyers Survey. Investment sales spiked 64.5 percent to 1.23 million in 2011 from 749,000 in 2010. Vacation home sales rose 7.0 percent to 502,000 from 469,000 the year earlier. Investment homes accounted for 27 percent of all transactions last year, up from 17 percent in 2010, while vacation homes made up 11 percent of all transactions in 2011, up slightly from the 10 percent recorded in 2010.

The boom in investment purchases can be attributed largely to cash buyers, according to NAR chief economist Lawrence Yun. Last year 49 percent of investment buyers and 42 percent of vacation-home buyers paid in cash. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he says. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Half of all investment home purchases last year were distressed properties, as were 39 percent of vacation home sales. The median price of an investment home sold last year was $100,000, up 6.4 percent from 2010. But vacation home prices plunged 19.1 percent to $121,300 in 2011 from $150,000 the year earlier. NAR finds that half of all investment buyers purchased their properties to generate rental income, while 34 percent wanted to diversify their investments.

It's been a long time since our inventory level was this low.  Only a little over 17,000 listings on the market in the Twin Cities.  I can't believe I am saying this, but we need more listings.  Thinking of selling???

Weekly Market Activity Report
The last time you were at the doctor, your vital signs were checked – heart rate, pulse, temperature and blood pressure. Progress was documented and valuable insights were gained, whether it was a routine visit or one of many checks during an extended hospital stay. The housing market has been in and out of intensive care for the past several years. Monitoring vitals matters. The pulse of today's market indicates that we may be getting ready to leave the ICU. So if you could just please pull up your sleeve, let's check your blood pressure.

In the Twin Cities region, for the week ending March 24:
• New Listings increased 2.2% to 1,414
• Pending Sales increased 30.2% to 1,052
• Inventory decreased 27.3% to 17,193

Weekly Market Activity Report

In another sign that the six-year long housing slump could be coming to an end, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) reached 28.  To put that in perspective, it went from above 70 in 2005 to below 10 in 2009. The HMI has not seen 28 since June 2007. This and other landmark data points are coalescing to signal calmer waters ahead. That's not to say you should expect double-digit annualized appreciation, but both buyers and sellers are displaying the sort of confidence that is fluttering through the rest of the economy.

In the Twin Cities region, for the week ending March 17:
• New Listings decreased 1.3% to 1,406

• Pending Sales increased 23.1% to 1,029

• Inventory decreased 27.5% to 17,088

Buyer activity: up. Seller activity: down. That could soon change if sellers begin to increase their activity levels entering the spring market. They've understandably been Inventory a tad shy lately, but the changing landscape is starting to register with well-informed homeowners looking to move. Buyers have shown that they refuse to let one of the most attractive purchase environments pass them by. As activity revs up this spring, not all segments will benefit equally. Which is exactly why the numbers are so central to assessing both the breadth and depth of market recovery.

In the Twin Cities region, for the week ending March 10:

• New Listings decreased 0.3% to 1,450

• Pending Sales increased 20.9% to 995

• Inventory decreased 24.3% to 17,899

For the month of February:

• Median Sales Price decreased 1.4% to $138,000

• Days on Market decreased 9.1% to 145
• Percent of Original List Price Received increased 2.6% to 90.6%

• Months Supply of Inventory decreased 35.8% to 4.7

A longer article, but an excellent summary of the market conditions for the Metro Area.
Home Prices Stabilize Amidst Other Improvements
Minneapolis, Minnesota (March 12, 2012) – Home buyers in the 13-county Twin Cities metropolitan area entered into 3,756 purchase agreements during February, a 34.2 percent increase over last year. A warm winter certainly helped activity, but low interest rates and affordable prices were likely the main draws. More people signed purchase agreements last month than during February 2006 and every February thereafter.

Motivated by less competition and an improving economic landscape, sellers were more active. There were 5,366 newly listed properties, up 1.1 percent from February 2011. The number of homes for sale continued to drop, down 27.2 percent from last year to 16,689 active listings – the lowest inventory reading for any month since 2003. Months supply of inventory was at a six-year low of 4.6 months.

"The mix of homes selling is slowly starting to change which has translated into the smallest price decline since October 2010," said Cari Linn, President of the Minneapolis Area Association of REALTORS®. "Subsiding price declines are a sign of market rebalance."

Traditional sales surged 36.2 percent, while foreclosure sales increased 8.5 percent. Both segments had nearly identical market shares, comprising 42.7 and 42.3 percent of overall sales, respectively. Short sales were up 36.3 percent to make up the remaining 15.0 percent of sales.

The seller side of the equation continues to improve. For the seventh consecutive month, sellers received more of their asking price than in the year prior. Sellers should take some comfort in the fact that homes are selling in 144 days compared to 159 last February. That marks the fifth consecutive month of year-over-year decrease in market times.

Those looking to sell their properties should be aware of distressed market activity. Homes in financial distress are exiting the marketplace faster than they are entering it, but they're still a significant factor. The overall median sales price was down 1.4 percent from February 2011 to $138,000, marking the smallest decline in 16 months. Digging deeper, traditional prices fell 11.6 percent to $183,000; foreclosure prices fell 1.4 percent to $104,000; and short sale prices fell 17.1 percent to $116,000.

"Median sales price is an important market indicator, no doubt, but watching only price activity is short-sighted," said Andy Fazendin, MAAR President-Elect. "Other indicators are offering consistent evidence of a market on the mend."

All information is according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. 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.

2011 saw the fewest amount of foreclosures since 2007 in Minnesota.  Now that's some good news.

Foreclosures in Minnesota, 2011 Report
There were 21,298 homes sold at Sheriff's Sale in 2011 in Minnesota, the fewest since 2007. However, it also reflects the fact that the foreclosure crisis is not over yet, as it means that over 1% of EVERY HOME in Minnesota was lost to foreclosure last year.  It also brings the cumulative total of foreclosures in Minnesota since we began tracking these numebrs in 2005 to over 135,000.

The comprehensive report, titled “Foreclosures in Minnesota”, analyzes sheriff’s sale data, the primary means of identifying foreclosures, from each of Minnesota's 87 Counties. Minnesota is unique among other states in the availability of current, comprehensive foreclosure sale data.
To view a copy of the full report, go to: http://hocmn.org/en/2011ForeclosuresInMinnesota.cfm

MN REALTORS eRESOURCE - March 12, 2012

Coldwell Banker: The Value of a Home

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