The Real Estate Market (first 30 days after the tax credit expiration.)

According to the Minneapolis Area Association of Realtors, home sales in the Twin Cities housing market took another dip as the hangover from the tax credit expiration continued. For the week ending May 22, there were 624 pending sales—a precipitous drop of 42.5 percent from a year ago.

The biggest drops in sales since the credit ended can be seen in the traditional seller market (i.e., anything that’s not a foreclosure or short sale) and in the middle price ranges from $150,000 to $350,000. Pending sales have dropped in those ranges from 1,085 the week the credit ended to 384 for the week ending May 22. In sum, it may be a difficult summer market for home sellers.

The good news is that new supply is also slowing, which means the market is already self-correcting to avoid a surge in unneeded inventory. New listings fell to 1,581 for the same reporting week, a decline of 15.8 percent from this time last year.

The Supply-Demand Ratio has been updated for June and shows a figure of 5.05, which means there are 5.05 homes for sale for each buyer in the month. That’s a 10.9 percent increase over the mark seen a year ago and is a result of the decline in buyer activity.

Here in Hutchinson, MN the market activity for May, 2010 was still pretty good. We’ll have to see if our housing market sees the same declines as reported for the Twin Cities market.

There Is a New Sign in Town

Recently we unveiled our new for sale signs in the Hutchinson, MN area. You’ll see them on the homes we have for sale as well as homes that have recently sold.
After 25 years of using the other signs, we decided it was time for a new look.
The new signs are in the shape of a house and have brochure boxes attached to the chimney.
We hope you enjoy the new look.

Expiration of Tax Credit

The expiration of the tax credit clearly motivated buyers to take action by April 30. Last week, there was a significant 31.2 percent jump in Pending Sales versus last year, bringing the total number of contracts written to 1,469. But for the first time this year the number of New Listings was down. A total of 1,803 of them entered the market, 11.5 percent lower than a year ago.

Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.

These statistics include all of the Regional Multiple Listing area not just Hutchinson, MN.

We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.

Sales Activity Continues

No one was really sure what was going to happen once the stimulus money expired on April 30, 2010.

We have been pleasantly surprised to see that many calls are continuing to come in and people still want to buy and sell their homes!

This activity is certainly a good indication that the housing market may very well be coming out of its slump here in Hutchinson, MN.

The interest rates continue to be favorable for buyers. That fact coupled with favorable prices on homes, makes this a great time for buyers to buy homes and sellers to sell their homes.

How the Spring real estate market is shaping up

According to the Minneapolis Association of Realtors, the local housing market continues to mimic spring growth, as Twin Citizens emerge from their wintry cocoons just in time for the final days of the home buyer tax credit. For the week ending March 20, there were 2,277 new listings, up 28.8 percent from a year ago and marking the seventh consecutive week of strong year-over-year increases.

Pending sales dropped a bit from their high the previous week, but the 950 signed purchase agreements for the week were 10.2 percent ahead of where they were at this point last year.

Keep in mind that these numbers reflect the entire Regional Multiple Listing area. The housing market in Hutchinson, MN appears to be following the same trends.

As the tax credit’s April 30 deadline looms, expect a flurry of home sales activity. Time will tell what happens when the credit has expired, but the next few weeks should be extremely active.

How Green Are We?

Here are some interesting statistics recently published in “The Residential Specialist” magazine. (Their source for the information was Harris Interactive.) This magazine is available to all real estate agents who have earned their Certified Residential Specialist certification through the National Association of Realtors.

Several of Hometown Realty agents in Hutchinson, MN have earned this CRS designation.

What percentage of Americans participated in energy-saving activities within the past year?
Installed more energy efficient light bulbs: 63%
Purchased energy efficient appliances: 36%
Started paying bills online: 46%
Switched to paperless financial statements: 40%
Donated an electronic device for recycling: 41%
Swithed from bottle to tap water: 29%
Installed a low flow showerhead: 17%
Installed a low flow toilet: 16%
Made home improvements that provided government tax credits: 14%
Bought a more fuel efficent car: 13%
None of thes: 13%
So, how do you and your family compare?

2009 Profile of Home Buyers and Sellers

According to the National Association of Realtors “Profile of Home Buyers and Sellers 2009″, 90 percent of buyers used the Internet as an information source in their home search, up 30 percentage points during the past six years. First-time buyers were even more likely to use the internet.

Also reported was that 47% of recent buyers were first-time buyers, 21% of recent home buyers were single females, and 10% were single males.

The housing market in Hutchinson, MN would be in line with these findings.

Weekly Market Activity Report

The first full week of reporting for the 2010 Twin Cities housing market is in and while there are a few “green shoots,” it’s becoming apparent so far that the market won’t see the same spectacular growth in sales it saw at the beginning of 2009.

There were 520 pending sales for the week ending January 9, down 1.7 percent from the same week in 2009. That’s the seventh week of the last nine to see slightly fewer sales than the prior year, a time period that coincides closely with the initial expiration date of the first-time home buyer tax credit. However, we’re still 21.2 percent higher than the pace in 2008 for that period.

As you likely know, the credit’s been expanded to include a $6,500 incentive for buyers who have owned a home for five years of the last eight. Since we can safely assume that many of these buyers will need to sell their home first before buying a new one and receiving the credit, new listings numbers might shed light on how much effect the new credit is having. So far, it doesn’t appear to be much.

Over the last three months, the number of new listings has been 11.7 percent behind the same period one year prior. With many looking for continued “seedlings” of hope in the local housing market, this isn’t welcome news. As always, we’ll be keeping a close eye on the evolving market and reporting back what we see.

The Early Spring Market

As we anticipated, the Spring Real Estate market seems to have arrived early this year here in Hutchinson, MN. Despite the extra cold weather, buyers and sellers are anxious to get moving.

We expected this based on the fact that both the First-Time Homebuyers’ Tax Credit and the other Homebuyers’ Tax Credit require that buyers have a signed and binding purchase agreement in place by April 30, 2010 and close by July 1, 2010.

Sellers don’t want to miss out on any of the market time between now and the end of April, so they are calling to get their homes put up for sale as soon as they can.

With the interest rates still staying low, buyers and sellers are smart to get a jump start on the housing market.

The Parking Lots Are Full

Judging from the number of cars in all the parking lots and along Main Street in downtown Hutchinson, MN it appears that the economy here is perking up.  Since Black Friday, I have observed that the stores have many shoppers in them no matter what time of day it is.  And, if you haven’t been to the Hutchinson Mall, you need to see all the new stores!  It’s great to live in an area where the economy appears to be improving each month.  

The real estate market continues to be very busy for what is seasonally a slower time for homes to sell and people to put their homes on the market.  We’ve also got people moving into Hutchinson because of job transfers and new positions with local companies.  This is wonderful news because a number of  our manufacturing companies have had significant layoffs and now are hiring people back.  Let’s all be grateful that we live in such a wonderful place!