Local Real Estate News
U.S. builders broke ground on more houses than forecast in May, offering a sign that the industry’s slump, now in its fourth year, may be approaching an end.
US News and World Report says Duluth will be sixth best in the country when it comes to increasing home values. City leaders are not surprised that values will go up 3.7 percent evey year for the next decade. That's according to Moody's Economy.com., which puts the city in the nation's top ten. "We've always had a stable market," says Patricia Johnson, president of the Duluth Area Association of Realtors. "Duluth has traditionally stayed away from trendy buys like larger homes and fancier cars." "The stuff that people seem to have accumulated over the last five to ten years that has supposedly cause this economic downturn."
Construction spending rose 0.8 percent in April, the most since August and marking the second straight month that builders boosted spending on construction projects around the country. Private builders' spending rose by 0.7 percent, contributing to the overall improvement in April, according to the Commerce Department report on Monday. Federal Reserve Chair, Ben Bernanke has said he hope the recession, which started in December 2007, will end later this year.
The decline in new listings, coupled with increased pending sales, has resulted in active listings supply dropping significantly. A year-over-year comparison of active listings from last May reveals a drop of 20.5 percent, bringing our Supply-Demand Ratio down to a healthy 5.23 houses for sale per buyer. The rebalancing is beginning but the journey back will be slow. It appears that enough houses will soon be off the market, thus creating a rebalancing of the buyer-seller mix and a reversal in price trends. You can view the entire report below.
Based on data from the Regional MLS of Minnesota, Inc. April home sales in the Twin Cities were even stronger than March's upswing according to the Minneapolis Area Association of Realtors. There were 5,211 pending sales in April, up 23.8 percent from a year ago. This is the highest showing of signed purchase agreements since April of '05 and the tenth consecutive month of year-over-year increases. Of the month's pending sales 46% were lender-mediated foreclosures and short sales-down from the last few months as more traditional properties are sold during the spring selling season but up from last year at this time.
Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator increased 3.2 percent based on contracts signed in March and is 1.1 percent higher than March of 2008. Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum." We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around."
Full Story: National Association of Realtors
Affordable home prices combined with historically low mortgage rates and first-time buyer's tax credit are fueling the sudden real estate turnaround. "I just had an open house with a house that was priced at $114,000 and 30-35 people come through in the two hours." The optimism of Realtor's® is supported by hard numbers. Pending home sales have jumped 20 percent compared to the same period a year ago. Chris Galler heads The Minnesota Association of Realtors® and says the housing sector from $100,000 to $250,000 is extremely hot right now.
