Case Shiller Index: Minneapolis / St Paul vs. Composite 20 – Jan 31st 2012

January 31, 2012 by

The S&P released the November 2011 Case Shiller Index.  Minneapolis St Paul vs the Composite 20.

New York, January 31, 2012 – Data through November 2011, released today by S&P Indices for its
S&P/Case-Shiller 1 Home Price Indices, the leading measure of U.S. home prices, showed declines of 1.3`%
for both the 10- and 20-City Composites in November over October. For a second consecutive month, 19 of
the 20 cities covered by the indices also saw home prices decrease. The 10- and 20-City Composites posted
annual returns of -3.6% and -3.7% versus November 2010, respectively. These are worse than the -3.2%
and -3.4% respective rates reported for October. In addition to both Composites, 13 of the 20 MSAs saw
their annual returns decrease compared to October’s data.

Read Full Report

Minneapolis / St Paul, MN  dipped about 1%, ( .74 on the index)  from October 2011 to November 2012, slightly better than the Composite 20.    Is this indication that prices are beginning to stabilize?  This report is obviously after the fact reporting, so we should begin to see some better news in the coming months from the Minneapolis/St Paul Case Shiller Index.

 

 

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Minnesota Unemployment Rate & Employment Dec 2011

January 25, 2012 by

Minnesota’s unemployment rate is down to 5.7% for December 2011.  Employment is a key component to the housing recovery.  Lately we  have been seeing improvement in the unemployment rate for Minnesota.

 

Let’s also keep in mind the actual jobs…  To buy a home, a buyer will typically need a job unless they are paying cash…

For Employment, we (MN) are at early 2004 levels, ironically enough that is where we are at for inventory of homes for sale too.  There is still a long way to go to get back to pre-recession levels, but there is a slow improvement.

 

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2011 Certificate of Rent Paid (CRP) for MN

January 10, 2012 by
State seal of Minnesota

Image via Wikipedia

A reminder that you need to get the 2011 CRP’s out to your renters by the end of January for any renter that paid you rents in 2011.

Minnesota Department of Revenue requires landlords to file the CRP form by January 31st or be charged penalties.

Here is the form and instructions:  2011 Certificate of Rent Paid

What’s New for 2011?

Due to recent legislation, 2011 renter refunds will be made based on 17 percent of rent paid, rather than 19 percent of rent paid, which has been used in prior years.
The forms have been designed to reflect this change.

Who Must Issue CRPs

If you own rental property and rent living space to other persons, you or your managing agent must issue a CRP to those persons
if:
• property tax was payable in 2011 on the
property; or
• you were not required to pay property
tax, but you made payments in lieu of
property taxes.

Who Must Receive a CRP

You must complete and give one CRP to each married couple or unmarried adult who lived in a rental unit you owned.
Married renters: Give only one CRP to a married couple. If the couple separated or divorced before you issue the CRP, give the
CRP to the one who remained in the rental unit. If both moved out, give the CRP to the first one who asks for it.
Unmarried renters: Give a separate CRP to each adult person who lived in the rental unit, even if their name is not on the lease.
On the CRP given to each person, provide their name only—do not include others who lived in the rental unit.
If more than one unmarried adult lived in the unit, show that each paid an equal amount of rent, regardless of the amount
each person actually paid.

DOWNLOAD Instructions & Form

from Minnesota Department of Revenue

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Twin Cities Real Estate Market Update, 4.6 Month Supply of Homes.

January 9, 2012 by

The Twin Cities real estate market wrapped up 2011 quite nicely despite some rough spots along the way, ending 2011 with a 4.6 month Supply of Homes!   It was not the year of the recovery as some had predicted, but we are certainly in an improved state.

For week ending December 31, 2011

• New Listings decreased 11.6% to 593
• Pending Sales increased 41.7% to 564
• Inventory decreased 24.9% to 18,341

For the month of December:
• Median Sales Price decreased 5.6% to $145,000
• Days on Market decreased 2.4% to 140
• Percent of Original List Price Received increased 1.8% to 90.6%
• Months Supply of Inventory decreased 36.2% to 4.6

Read Full Report from the Minneapolis Area Association of Realtors

YES.  4.6 Month Supply of Homes.

I quote myself from last weeks report:

I suspect we may be close to dropping below a 5 month supply of homes, next weeks report will tell us more…

This puts the Twin Cities WELL WITHIN A BALANCED MARKET and approaching a Buyers market believe it or not.   I say that with caution, we still have strong headwinds against the housing market including;  Economy, Jobs,  Shadow Inventory, and Regulations.

So Builders – don’t start building TOO many spec homes..  However – you should probably start pushing dirt and get your basements in for the spring market.  (check the local community market stats or contact me for a detailed market study).  Be cautious, the inventory will seasonally increase, so this window may not last long…

 

If you are sitting on the fence waiting for homes to become Affordable, I think you might miss out – check the current Housing Affordability Index.

 

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Urban Sprawl and Smart Growth – National Association of Home Builders Urban Sprawl Video from 1959

January 5, 2012 by

This is pretty amazing to watch.  It strikes me as one of those old movies they played in school warning us of Propaganda.  Don’t get me wrong, I don’t think this film is propaganda – just reminds me of it.  I think there was and there is still is legitimate concern with land use.

What I found interesting here is the idea of a “Regional Authority” to govern the development of the region would help.  Maybe it has, but to me it seems like it has opened up more problems and hasn’t seemed to have solved the issue it was intended to.  In the Twin Cities that regional authority is the Metropolitan Council.

What’s your take on this?  Have we made any progress since 1959?  Have we gone backwards?  Is the Regional Authority the answer to these issues?  Maybe it is time we look at that…

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Radon in Minnesota and Radon in your Home

January 4, 2012 by

January is National Randon Action Month.

We are in our “Burn Season” or better known as “Heating Season” in MN, so we have our furnaces running which draws in the radon gas into our homes.

What is Radon?

Radon is a colorless, odorless radioactive gas that move through the ground.  It is break down of Uranium in the soil into Radium which is then released into Radon gas.  This gas gets drawn into our homes which can create health risks.

When inhaled, it gives off radioactive particles that can damage the cells that line the lung. Long term exposure to radon can lead to lung cancer. In fact, over 21,000 lung cancer deaths in the US each year are from radon, making it a serious health concern for all Minnesotans.

Minnesota Department of Health

In Simple Terms

This is not a new development, Radon has been present as long as the earth has been around.  The difference now is that we are Aware of the gas and the dangers of breathing high levels of this gas.  We also know how to prevent breathing high levels of this gas, so why breath high levels if you don’t have to?

Minnesota has fairly high levels of Radon due to the soil conditions here.   We also have our climate which requires us to run our furnaces – this creates a negative pressure and actually draws in this natural forming gas into our homes.

When you build a new home in Minnesota, you will have radon remediation systems built into the home that is designed to capture the gas and allow it to vent outside and not into the home.

You can download a very informative Brochure from the Minnesota Department of Health.

The Minnesota Department of Health also has great resources for Testing your home for Radon levels, and how do radon remediation.  I recommend you read their informative website.

 

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Minneapolis / St Paul MN Housing Starts – 12/23/2011

December 23, 2011 by
DUBLIN, CA - FEBRUARY 16: Construction worker...

Image by Getty Images via @daylife

The local stats were released today for Housing Starts.  November’s housing starts were down 64 units from October’s 375 units.  Not surprising for the season, but goes against the national stats.  One key reason may be that we are comparing the 1-Unit structure housing starts for Minneapolis/St Paul against the national stats that include apartment building units.

I keep going back Robert Shiller’s statement that we will have a “Catfish Recovery” – just bouncing along the bottom.   Sure appears that is the case here..

# of Units:
2011-01-01   157
2011-02-01   190
2011-03-01   234
2011-04-01   285
2011-05-01   349
2011-06-01   394
2011-07-01   367
2011-08-01   391
2011-09-01   366
2011-10-01   375
2011-11-01   311

 

Also released were the figures for Housing Starts for Minnesota:

MN Housing Starts in Units:

2011-01-01   217
2011-02-01   244
2011-03-01   412
2011-04-01   608
2011-05-01   615
2011-06-01   740
2011-07-01   643
2011-08-01   702
2011-09-01   709
2011-10-01   585
2011-11-01   436

 

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FHFA Home Price Index for Minnesota Dec 2011

December 20, 2011 by

The FHFA updated their Home Price Index figures for Minnesota last Friday.  With all the confusion going on with which numbers are trustworthy or not, and the fact that I am not overly trusting of this data – I wasn’t sure if I should post it or not.

With the question of the NAR figures, it is probably more important to keep an eye on multiple sources, so I added the Case Shiller composite 20 index along side it.

Generally speaking, they track fairly close, unfortunately we are comparing Apples to Oranges here.  Minnesota vs. the Composite 20 from 2 different sources, but it is just a benchmark…  According to the FHFA home price index, Minnesota’s home prices are increasing.  This is highly suspect in mind as it goes against the raw MLS data from the Twin Cities region, which should account for a very large portion of the Minnesota sales..

Before I disregard this source, I do believe even with its flaws – it has its purposes.  This is not a great benchmark for tracking the market especially in real-time, primarily because it is a quarterly index.  However, it is probably a great source to view historical trends and the “larger picture”.

 

 

Now let’s look at it for the “larger picture”:

Draw an imaginary trend line from 1975 to today.  In theory that is where home prices will ultimately be.  We are getting close..

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Moving to the Twin Cities, Minneapolis / St Paul MN

December 16, 2011 by

Whether you are looking at moving or relocating to Minneapolis / St Paul MN or if you already live in the Twin Cities metro area – here is an informative video about the region.

As a lifelong resident, I forget what a great region this really is.  From the 20 Fortune 500 companies located here to the Parks, education, and entertainment.  It is easy to take these things for granted when you become used to them!

If you are looking at relocating to the Twin Cities, contact me and I will email you Relocation Guide to the Twin Cities to help you get started.

Enjoy the short video!

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Minnesota Unemployment Rate down to 5.9% after losing 13,700jobs last month – the real numbers

December 15, 2011 by

You have probably read that Minnesota’s unemployment rate is down to 5.9%, but we also lost 13,700 jobs last month.   The unemployment rate is rapidly becoming an obsolete number to track, with the current way it is calculated – it is not reflective of the jobs anymore.

For a better understanding of what the employment situation is like in Minnesota, we can look at the total number of jobs from MNDeed.

Here is a screen shot from MNDeed’s data center website.  These are the non-farm payroll jobs, not seasonally adjusted.  From this snapshot, it appears like we are at about 2004 levels for jobs, ironically enough – we are at about 2004 inventory levels for homes for sale in the Twin Cities too.  Wonder if there is a connection??   

Looks like we have a long ways to go in adding jobs.  Remember, not only do we need to get back to 2008 levels but we also need to add jobs from there to account for the increase in population..

 

 

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The views expressed on this blog are my own and do not necessarily reflect the views, opinions, or positions of my Broker.