What I think may be most telling of what is happening in the current market is the chart below released by the Minneapolis Area Association of Realtors in their recent quarterly report. You can clearly see how traditional new listings and sales have followed seasonal curves peaking in the spring each year...but the curves have been getting lower, showing how traditional sellers and buyers have been holding back. Lender-mediated sales, however, don't show the seasonal curves. You can see how their numbers have steadily risen in the last couple years, but slowed in the last quarter...actually showing the first quarter-to-quarter new listing decrease since 2003!
One of the results of these 'lines' dramatically coming together is that although lender-mediated sales were 46% of sales in the third quarter they were only 32% of January inventory. Time will tell what will happen moving forward. The distinctly separate 'lines' also illustrate the distinctly separate markets...with distinctly different prices. While 4th quarter median sales prices were down 18.7% year-over-year overall, traditional sales prices were only down 2.6%!
Again, only time will tell what will happen going forward. I feel this well-spring of pent-up demand in the traditional market...and the strong price differential shows that buyers are willing to pay more for homes that are not lender-mediated. I know I have clients who have been waiting to sell...and are now ready to move!
Click here to see the full report compiled by the Minneapolis Area Association of Realtors. It includes quarterly data for both traditional and lender-mediated homes by property type, price range, MLS area and city.
Sharlene Hensrud, RE/MAX Results - Email - Website
RELATED POSTS
The numbers what ever they may be are unbelievable. It is a national problem now and it must get fixed.
The solutions are not perfect, but we must stop the slide. The fed must keep buying mortgage paper. They also should get the refi the same streamline program as FHA should be forced upon the originating banks to refi the people without appraisal or income verification. This would help the people who no longer have equity in their homes, what to stay but must get out of a high interest mortgage.
If the fed keeps putting money into new mortgage paper with Fannies and Freddie, the money will eventually hit the market. So far it is only hitting in the conforming mortgages. I wrote about 10 weeks ago for the fed to borrow on long term treasury’s and put the money directly into new mortgages at low rates to get the market going. I also said they should provide investor financing to get the foreclosed homes bought and rented. Investor will bring a lot of capital to the market. All buyers must qualify under normal standards.
My investigation also finds the heavily hit markets are reacting to the lower prices and lower rates and volume is picking up nicely.
The banks can not get the money directly, they won’t lend or at least not at the rate and quantity we need. When a purchaser gets a mortgage, buys a property, the old mortgage gets paid off to the bank. The bank receives the money and the mortgage is retired. If the bank’s reserves are too short to retire the mortgage, that is another issue for their solvency.
This is in the works, and we will turn around!
Richard
Posted by: Richard Stabile | February 08, 2009 at 10:36 PM