Local Real Estate News

Driven by bargain hunters and first-time buyers, the local market is feeling an uptick. Joel Jordan was pleasantly surprised when the house he fell in love with in Stillwater, dropped in price by nearly $30,000 and making it affordable. He had looked at about 40 houses, mostly foreclosures and fixer-uppers. Despite an almost daily dose of dim economic news, the Twin Cities metro area is gaining some momentum. Pending home sales rose 6.9 percent during October from a year ago. It was the fourth consecutive month of year-over-year increases. Closed home sales for the year are still almost 5 percent behind last year, but rose 12 percent in October. A growing share of those sales were distressed sales which help drive down the median sale price and those prices are now approaching levels not seen since the beginning of the decade. Full Story: Star Tribune (may require free registration)

The 2008 National Association of Realtors Profile of Home Buyers and Sellers shows first-time buyers have risen and they plan to own their homes longer than buyers in the past. Lawrence Yun, NAR chief economist, "First-time buyers are more flexible in entering the market because they aren't concerned about selling an existing home. Given low home prices, plentiful supply and affordable interest rates, it's been an optimal time for entry-level buyers with a long term view. The number if first-time buyers rose to 41 percent from 39 percent of transactions last year and 36 percent in 2006. The median age of first-time buyers was 30, down from 31 in '07 and the median income was $60,000. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007. Full Story: National Association Of Realtors

Eagan voters on Tuesday were leaning against raising their taxes to cover the $$10.25 million tab to purchase the former Carriage Hills golf course and leaning toward using the land for public facilities, recreation and open space. Rejection of the purchase would clear the way for a developer to build as many as 480 homes on the site. Voter rejection of the purchase would allow the developer to build a mix of single-family homes, apartments and townhouses on 90 of the site's 120 acres. Full Story: Star Tribune (may require free registration)

Ryan Jones, director of MetroStudy's local division in Plymouth thinks he spotted some encouraging signs in residential construction trends. Closed sales of newly built homes in the Twin Cities came in with a 23 percent decline compared wit the previous 12-month period. The silver lining? It's one of the mildest year-over-year declines recorded since 2005 says Jones. Jones also noted that the inventory of finished vacant homes on the market dropped by a third to 2,377, during the third quarter of 2008. Homebuilders have been trying to work through that supply because these spec homes exert a downward pressure on overall prices. These bits of relatively good news in the MetroStudy report to build on some other positive signs for homebuilders. For example, the U.S. Commerce Department reported that new home sales unexpectedly rose to 2.7 percent in September, although median sale prices dropped too. The Minneapolis Area Association of Realtors reported a 42 percent increase in pending sales for September. Despite the silver lining, there's no denying the clouds; the financial crisis, more restrictive credit policies, the psychological affects of falling prices and foreclosures. Full Story: St Paul Pioneer Press (may require free registration)

Three metro counties and the state of Minnesota will receive federal money through a new unit of the Department of Housing and Urban Development that aims to help communities hard hit by the foreclosure crisis. From the $57.8 million federal pot, the Minnesota Housing Finance Agency received $38.8 million, Minneapolis, $5.6 million, St. Paul, $4.3 million, Hennepin county $3.9 million, Dakota County, $2.8 million and Anoka county $2.4 million. Those communities were chosen based on the number and rate of subprime mortgages, delinquencies and defaults. The aid is funneled through HUD's new Neighborhood Stabilization Program and can be used to purchase foreclosed properties for rehab and sale and in some cases demolition. Homes that are sold through the program must be sold at or below the purchase price plus the rehab investment. The money can also be used to offer down-payment and closing cost assistance to buyers who are at or below 120 percent of the area's median income or to create land banks to stabilize neighborhoods and encourage development. Full Story: Star Tribune (may require free registration)

First-time buyers, Marissa McDonald and Travis Gehling said sellers were offering serious discounts on just about all of the 20 or so houses they looked at during the past couple of months and they're hoping to get a 7.5 percent discount on the one they plan to buy. Such discounts and a flood of clearance-priced foreclosures helped drive a 42 percent increase in pending sales last month, compared to a year ago. Sellers on average received 92.2 percent of their asking price, just two years ago getting 96 percent. Mortgage rates have remained relatively stable and near 30-year lows. There are nearly 10 houses on the market for every buyer and the government is offering a $7500 tax credit for first-time buyers, causing the housing affordability index to rise to 159, its highest level since the spring of 2003. Full Story: Star Tribune (may require free registration)

The National Association of Realtors® released reports of the highest increase in pending home sales since June of 2007. The group said its seasonally adjusted index of pending sales for existing homes rose to 93.4 from an upwardly revised July reading of 87. Wall Street economists surveyed by Thomson/FR had predicted the index would fall to 84.9. The index had sunk to a record of of 83 in March. Full Story: CNN

The redevelopment of a Roseville business park is back on track after a two-year hibernation. The project was first envisioned as a 275-acre mixture of homes, offices and shops along Cleveland Avenue. After some success, the last 170 acres of it has faced delays, lawsuits and controversy but an upcoming City Council vote on new construction in the area shows the project is moving ahead. Several new projects are being proposed, including a 90-unit hotel, a 95-unit senior housing coop, two office buildings, and an assisted-living facility, to name just a few. Full Story: St Paul Pioneer Press (may require free registration)

The Minneapolis Area Association of Realtors said that in the last seven weeks, 1500 more homes were sold than the same period last year and there are eight percent fewer homes on the market than a year ago. The translation: the bulk of homes for sale is beginning to ease. "We're seeing some buyer entry into the marketplace and that's really good news", said Kevin Knudsen, President of the association. However, many homeowners haven't seen evidence of the recovery because most of the movement is on homes priced below $200,000 and many of those foreclosures. The big question is how the events of this past week will affect what appears to be the beginning of a recovery. Some experts predict that home loans will be easier to get it the bailout passes. Full Story: WCCO