The Twin Cities housing market continues to adjust to a world without a fancy tax credit. Pending sales leveled off following the slight gains seen the prior week, squatting at 645 signed contracts for the week ending June 19.

While that’s steady compared to last week, it’s anemic compared to last year at this time when the market posted 1,156 signed contracts. If you’re keeping track of percentages, that means we’re down 44.2 percent from a year ago—the sixth consecutive week of year-over-year declines exceeding 30 percent.

New listings are also down from a year ago, posting a drop of 8.4 percent from a year ago to 1,712 for the most recent reporting week. Any sort of "return to normalcy" is going to take some time.

Click here for the full Weekly Market Activity Report.

Courtesy of Minneapolis Area Association of Realtors

Phoebe is also wondering, where are all the showings?

Here we are in June a little over a month since the tax credit has expired and many of you are asking what has happened to the real estate market?  First the tax credit did increase sales at record numbers, with many homes going in multiple offers.  Then May 1st came around and bam the market stopped and throughout May pending sales took a nose dive.  It is now the May tax credit hangover, but just like a greasy burger, orange juice and time work for a human hangover the same holds true for the market.  Time will work it’s magic and we will get back to some normalcy in the market place. Yes showings were down in May, but come June 1st they started to rise again.  To see all the statistics for May check out the monthly report from MAAR.  

Also check out the monthly skinny report for June and the weekly market report.

The tax credit has come to an end and the housing market is reaping the rewards.  The April median sales price has gone up 11% compared to April 2009.  Thanks Pioneer Press for reporting about the  positive turn in the real estate market.  For those who would like to view the entire report check out Minneapolis Area Association of REALTORS® April Recap. 

Stay tuned to see will happen this summer with the housing market.  My prediction is that we may see a small lull in May then the market will heat back up this summer, thanks to great interest rates and fabulous deals out there for the taking!

New legislation to speed up short sales?  I am not typically a negative Nancy, but having dealt with many banks during the short sale process has made me a skeptic.  It has me wondering if lenders were able to speed up/stream line the process they would have already done so.  I was talking with Bank of America yesterday and asked how long would it take for us to get assigned a negotiator once all the sale paperwork had been submitted.  The customer service rep told me 10-15 business day.  I asked why it took so long and he reminded me that we are in a recession (yeah really) and many people have lost their jobs and their department is very busy.  I understand the economic crisis we are in, but we have been in this mess for 3-4 years, more than enough time to figure out how to process a short sale in a timely matter.  Don’t get me wrong many lenders have figured it out, but many are still dragging their feet to get one done.  Realtor.org has even more info about Home Affordable Foreclosure Alternatives Program (HAFA). 

HAFA please prove me wrong and turn me into a positive Patty! 

Good luck to all sellers and buyers who are working with a bank on a short sale.  Patience and persistence go a long way. 

As many of you know I took a brief hiatus to have a baby!  Phoebe Helen (family name, not named after the character on Friends) was born October 15, 2009.  Funny how this date is significant when it comes to property/real estate, fyi, your second half of property taxes are due that day.    

Newborn picture                  Phoebe at baptismal in her bonnet, too cute            

Ok enough baby talk let’s get back to real estate.  When I left the market in October it was crazy busy with the first time homebuyer money set to expire November 30th.  John Gladis was filling in for me while I was gone and was working long days to get it all done.  Thanks John for all your hard work!  Then December came……….screeeeech, a true holiday slow down.  This isn’t too uncommon for the month of December, but people continue to buy and sell in December, see my previous post. 

Now fast forward to March 2010, the market has heated up to a rapid boil.  There are now tax credits for repeat buyers along with first time homebuyers.  New listings and pending sales are on the rise.  Currently there is a 6 months supply of homes (which indicates we are in a balanced market), for more stats click on the Weekly Market Activity Report.  I will be taking time to blog in between feedings, diaper changes and writing offers so check back often. 

I am coming off maternity leave long enough to post this weeks weekly market activity report.  I just couldn’t resist.  Thanks to Mark Allen for this Real Estate version of “Twas the Night Before Christmas.

Twas the week before Christmas, and all through the market,
Realtors were selling houses in the Twin Cities, some wearing parkas.

For the week ending December twelfth there was such a clatter,
Pending sales flattened out, unlike a step ladder.

542 for the week, which was 2.5 percent under last year,
When market volatility was in the stratosphere.

New listings were down to a more normal fashion,
With 1,028 added this week, a stable ration.

Santa may be bringing sellers some Christmas luck,
With the laws of supply and demand in flux.

“On Original Price, on Days on Market!” he calls,
But Housing Affordability makes sellers feel mighty tall.

With just one week left in the year 2009,
The Twin Town Market looks to end just fine.

Click Here, for the Full Market Report courtesy of MAAR.

Wishing you Merry Christmas and a prosperous and joyful New Year. 

December 1st the first time homebuyer tax credit is ready to expire.   To close by this date you will need to purchase in the next couple of weeks, contrary to the video, in our market closings take 30-45 days after all terms to a purchase have been agreed upon by the seller and buyer.  It is not too late.  Contact me if you would like to talk more about this free $8,000. 

For questions about the tax credit take a look at www.federalhousingtaxcredit.com.

Traditional Sellers: It’s "Go" Time

Or so says local REALTOR® and our data-friend (is that a word?), Aaron Dickinson in a recent blog post.

With foreclosure inventory dropping like a stone and often subject to multiple-offer price wars, and short sales still requiring a substantial amount of time and effort to close, Dickinson argues that traditional sellers have a unique window of opportunity in the fall market to nab a buyer. And that’s especially true for first-time buyers who need a quick close to get in before the November 30th tax credit deadline.

From the post:

• The first time home buyer $8000 tax credit expires on November 30, 2009 and most transactions take 3-5 weeks to close after an offer is made.
• Buyers will have to have chosen and negotiated on a house by the end of October to have a reasonable assurance of closing prior to the expiration of the credit.
• Banks do not have great concern over deadlines when dealing with REOs, so they are not likely to consider November 30th a “make or break” date even though the buyer will.
• Buyers making offers on short sales risk missing the tax credit if the answer from the seller’s lender takes to long or isn’t acceptable.
• In the coming weeks Buyers will find that the only option they have available to them has been the one who has been ready and waiting for this moment: the Traditional Seller.

If you are a Traditional Seller and your house is currently listed, keep it listed through Halloween if you can.  In past years the market quickly quiets after school starts but this year appears to be very different.  If you’ve been considering taking an additional price reduction, take it as soon as you can so you are priced correctly when the buyers’ interest swings your way… this will likely be you last-best-hope for selling till March 2010.

As we noted in our post from last week (see "Neighborhoods Where Traditional Homes are in Shortest Supply"), this has already started, to a degree. Sales of traditional, non-lender-mediated homes are up below $150,000 where first-time buyers can afford.

Sounds like "go" time for sellers.

Thanks to Minneapolis Area Association of Realtors

I would also like to insert my prediction of what might take place prior to the tax credit expiring.  With many single family homes selling in multiple offers, many buyers are going to take a second look at townhouses/condos.  This segment of the market has suffered immensely as many buyers want and demand single family homes in what used to be a buyers market.  With shortage of affordable single family homes more buyers will be buying townhouses.  So by looking in my crystal ball, my prediction is that we will see a rise in pending sales of townhouses and condos!!!

Reprinted from The Skinny Blog from the Minneapolis Area Association of Realtors:

Neighborhoods Where Traditional Homes Are In Shortest Supply

Last week we looked at which neighborhoods were seeing their inventory of available foreclosures and short sales dwindling. The general conclusion: lender-mediated properties are going fast and buyers have to be quick and aggressive to secure them.

This week we’re looking at the other side of the coin: homes listed by traditional sellers. In general, these properties are not selling quite as quickly than their cheaper lender-mediated cousins and are still facing challenging conditions. As of September 1 there was 10.1 months of traditional supply compared to 4.0 months of lender-mediated supply.

But there are some areas where traditional properties are moving relatively quickly. Let’s take a look at the Top 30 neighborhoods by Months Supply of Inventory. You’ll probably notice some patterns. Think urban and first-ring suburban, dudes:

Homes Listed by Traditional Sellers              Months Supply    Active Listings

1  303 - MPLS - Longfellow                               2.7                     55

2  744 - SP-Como                                              3.8                     51

3  361 - Crystal                                                 4.0                     62

4  304 - MPLS - Nokomis                                   4.3                     192

5  750 - SP-Mac/Groveland/River Road             4.4                    72

6  363 - Brooklyn Center                                   4.8                    73

7  378 - Richfield                                               4.9                    118

8  306 - MPLS - Northeast                                  5.1                    123

9  752 - SP-Highland Area                                   5.1                   82

10  308 - MPLS - Powderhorn                             5.7                   92

11  379 - Bloomington-East                                6.0                   93

12  362 - New Hope                                            6.1                   60

13  602 - South St. Paul                                      6.1                   67

14  360 - Robbinsdale                                         6.1                   72

15  746 - SP-St. Anthony/Midway                       6.2                  69

16  310 - MPLS - University                                 6.4                  42

17  309 - MPLS - Southwest                                6.4                  287

18  748 - SP-Town & Country                              6.5                  41

19  301 - MPLS - Camden                                     6.8                  150

20  742 - SP-Central                                             7.0                  70

21  738 - SP-Home Croft/W 7Th                           7.0                  30

22  768 - Fridley                                                   7.1                  85

23  770 - Hilltop/Columbia Heights                      7.2                  78

24  771 - Spring Lake Park                                   7.3                   22

25  766 - Moundsvw/New Brightn/St.Anthony   7.3                   150

26  391 - Saint Louis Park                                    7.4                   301

27  702 - Falcon Hghts/Lauderdale/Roseville      7.5                    159

28  716 - SP-Hillcrest/Hazel Park/Dayton’s Bluff 7.5                    191

29  720 - SP-Southeast St. Paul                          7.5                    39

30  714 - SP-Phalen                                             7.5                    113

There’s not a second- or third-ring suburb in the bunch. You’ll also notice that these neighborhoods tend not to contain too many expensive homes. The median prices in these neighborhoods tend to fall in the low-to-mid ranges that are affordable to a larger swath of home buyers. And when you think about perhaps the largest factor driving buyer demand right now, it makes a lot of sense: the first-time home buyer tax credit, dummy.

Let me show you what I mean:

I’d call that a pattern.

First-time home buyers are extremely active due to the tax credit and—unless mom and dad have chipped in a ridiculous amount of money to help—first-time home buyers don’t typically buy homes in the $500,000 and above price range.

What we’ve got is an extremely bottom-heavy market (insert inappropriate metaphor here) with robust activity in the price ranges typically populated by first-time buyers, and a declining market still searching for a bottom in the higher price ranges.

Takeaway: traditional home sellers in the mid-to-low price ranges have a serious window of opportunity for the next month to find a willing buyer, especially with foreclosure inventory becoming so scarce. When the tax credit expires in November, the landscape might look a little different.

Check out what is happening in the real estate market.  Good news for homes priced under $150,000.  Median sales price on the rise.

Median Sales Price

Lender Mediated $125,000

Traditional Sellers $209,000