Monthly Archives: September 2011

Housing market hit bottom: former RealtyTrac exec. Catfish Recovery

Line art drawing of a Catfish

Image via Wikipedia, "our new housing market mascot"

Housing market hit bottom: former RealtyTrac exec.

Well, it’s official, we have hit bottom!  At least according to Rick Sharga, former RealtyTrac exec.

The U.S. housing market hit bottom this year and will remain flat until 2014, when it will start to slowly recover, said Rick Sharga, an executive vice president withCarrington Mortgage Holdings.

“We’re looking at a catfish recovery,” he told attendees at the Asian Real Estate Association of America conference in San Francisco Friday, saying the market will bump along the bottom for some time before starting to revive.

More than a million foreclosure actions that should have taken place this year have not yet moved forward, and that delay pushes a resolution of the housing market’s problems into next year and beyond, he said, citing data from RealtyTrac, where Sharga served as a senior vice presidentuntil this week.

Read Full Article

The article goes on to mention the shadow inventory problem holding recovery back along with anemic economic growth.

Of all the predictions so far, this sounds to me like the most realistic one.  But who knows, it is anyone’s guess at this point.

I do like his term “Catfish Recovery”, bumping along the bottom.  There is nothing quite like the ‘down home’ ‘common sense’ phrases..



1 Comment

Filed under Uncategorized

Pessimistic bankers: Home prices won’t recover before 2020

I saw this article from the Minneapolis/St Paul Business Journal stating that 49% of the risk managers at banks don’t believe that housing prices would recover to 2007 levels before 2020.

The nation’s housing prices are unlikely to recover before 2020, a plurality of bank risk managers said in a survey that was labeled as “decidedly pessimistic.”

About 49 percent of the risk managers said housing prices would not climb back to 2007 levels before 2020, while 21 percent said they would, according to the survey, which was released Friday.

Read Full Article

Let’s keep in mind these are the same bankers that were lending  money to anyone who could fog a mirror contributing to the housing bubble. (It is more complex than that statement, that statement is just for effect.)

I would also like to point out the “wild card” called inflation.  Historically housing has been a nice inflation hedge.  This morning the Monetary Base was updated, from the looks of it we have inflation coming up…  So if  inflation kicks in and  housing prices pace inflation like they have historically, we could see housing prices increase to 2007 levels before 2020.  Okay, maybe that is not fair to take inflation into account… and will it happen with the next 9 years?   I don’t have a crystal ball so it’s anyone’s guess at this point..

What are your thoughts?

Personally, I like the asset of real estate; land, “sticks & bricks”.  But then again I am in the real estate business…

click on chart to view source: St Louis Federal Reserve

The monetary base is defined as those liabilities
of the monetary authorities that households and
firms use as media of exchange and that depository
institutions use to satisfy statutory reserve requirements
and to settle interbank debts.10 In the United
States, this includes currency (including coin) held
outside the Treasury and the Federal Reserve Banks
(referred to as currency in circulation) plus deposits
held by depository institutions at the Federal Reserve
Banks. The demand by the private sector for these
liabilities gives the Federal Reserve leverage to affect
money market interest rates.


Filed under Uncategorized

Reminder: 2nd Half Property Taxes Due

Property market

Image by alancleaver_2000 via Flickr

Just a reminder that your 2nd Half Property Taxes are Due October 15th.  (that’s coming up soon!)  (enough time to secure a loan!)

If you are in Hennepin County you can pay your 2nd Half Property Taxes Online at:

Property Taxes are due May 15 and October 15. If the date falls on a weekend or holiday, taxes are due the next business day.

* if you escrow your property taxes, your mortgage lender is paying the taxes that you have paid monthly.  If you are uncertain if you escrow, look on your mortgage loan statement and call the lender.


Leave a comment

Filed under Uncategorized

WSJ analysis: Minnesota has lowest mortgage denial rate

I wonder if this is the reason Minnesota ranked # 1 in the Nation for Mortgage Fraud?  20% still seems high to me for denial rate.  I would assume someone may not qualify for the best interest rates, but may be able to put into a higher rate mortgage instead rather than just simply denied.

This story is Edina Realty, just re-posting:

The majority of homebuyers who sought home loans in Minnesota last year were approved, according to analysis from the Wall Street Journal. In fact, the newspaper’s findings show the state had the lowest mortgage application denial rate in the country in 2010 for homebuyers seeking a new mortgage as well as homeowners trying to refinance an existing mortgage.


According to the research, which looked at data from the nation’s 10 largest mortgage lenders, Minnesota’s home loan application denial rate was 19.9 percent last year. The average rate for the entire nation was 26.8 percent – up markedly from 2009’s level of 23.5 percent.

Minnesota was the only state with a mortgage application denial rate lower than 20 percent, the Journal says.

Minnesota was the only state with a mortgage application denial rate lower than 20 percent, the Journal says. The mortgage application denial rate for Wisconsin and North Dakota was 23 percent and 21.1 percent, respectively – both lower than the national average.


In addition to the positive mortgage application acceptance rate in Minnesota, home loan interest rates have stayed near the same levels as at the beginning of 2011, making this year a premier time to purchase homes for sale in the state.

1 Comment

Filed under Uncategorized

Fox News interviews my boss, Ron Peltier, Chairman and CEO of HomeServices of America

Ron Peltier is Chairman and CEO of HomeServices of America was interviewed on Fox News. ( HomeServices of America spun out of Edina Realty and owns many real estate companies including Edina Realty around the country.)

Apparently Ron follows my blog closely.  He did however touch on the subject of lending standards which I want to get into at some point here on my blog.

Click on watch interview


Leave a comment

Filed under Uncategorized

30 Year Fixed Rate Mortgage drops, is it the result of The Twist?

I had been posting every business day on the 10 year treasury and the 30 year mortgage since the announcement of Operation Twist.  The reason why I am posting info on the 10 year treasury is that the 30 year fixed rate mortgage tends to track closely. It is not tied directly together, but the 10 year treasury is used as a guide for banks when they buy and sell mortgages.

Earlier this week the 10 year treasury started moving higher.  The 30 year fixed rate followed upwards.  Yesterday I got busy and forgot to track these and sure enough – the 30 year fixed rate mortgage rate dropped today.

The 10 year treasury nudged down a bit today as did the 30 year fixed rate mortgage.  The national average rate for a 30 year fixed rate mortgage today is 4.01%.  This chart below shows the average 30 year fixed rate mortgage compared to the 10 Year Treasury.  The 30 year mortgage rate data is updated as of 9/29/2011, the 10 year treasury is updated as of 9/27/2011 at 2.01.  (today it closed at 1.96)


click to enlarge

Now let’s look at where Edina Realty Mortgage Rates are today.

Today’s Mortgage Rates

The current interest rates shown below are based on a purchase of a single-family, primary residence. For current refinance rates, contact us

as of 09/29/2011 03:10 PM Central

Product Interest Rate APR
Conforming1 and FHA1 Loans
30-Year Fixed 4.125% 4.308%
30-Year Fixed FHA 3.750% 4.550%
15-Year Fixed 3.250% 3.566%
7-Year ARM 2.875% 3.180%
5-Year ARM FHA 2.750% 2.908%
Jumbo1 Loans – Amounts that exceed conforming loan limits1
30-Year Fixed 4.375% 4.518%
Equal Housing Lender
I don’t know if the rates will drop further, it is possible I guess.  Many experts believe it will, I am still a little cautious.  The 30 year fixed rate mortgage hasn’t dipped below 4% since it has been tracked by the Feds, so this may be a glass wall that it can’t break through.  Judging by the graph, it appears the spread between the 10 year treasury and the 30 year fixed rate mortgage gets larger.  So the question is how much further does the 10 year treasury have to drop to pull the rate below 4%?  What do you think, post a reply.   It has certainly grabbed my interest again to continue following this.

Leave a comment

Filed under Uncategorized

S&P/Case-Shiller Home Prices Indices – Minneapolis Home Price decline from Peak

S&P/Case-Shiller Home Prices Indices..

This is a great chart showing the increase in home price by percentage for Cities, and the price decline by percentage from the Peak.

Great visual to see how Minneapolis/St Paul Twin Cities area did compared to the rest of the nation on the bubble and the burst.


Leave a comment

Filed under Uncategorized

Minneapolis/St.Paul MN, Twin Cities Unemployment Rate August 2011 – released 9/28/2011

The Metropolitan Area unemployment rates were released by the St Louis Federal Reserve this evening for August 2011.

We know the State of Minnesota held at 7.2% unemployment rate for August, but now we can see how our local real estate market is doing with the unemployment rate.

For August 1st, 2011 the unemployment for Minneapolis, St-Paul-Bloomington, MN-WI MSA  (aka The Twin Cities) took a pretty significant drop from 7.4% to 6.7%.   Unfortunately there is no information suggesting why that drop took place.  A couple of theories are: Minnesota added 5,800 jobs, a large number would be in the Twin Cities and that there was a spike in unemployment due to the State shutdown.  These were explanations given for the State unemployment figures, and I just figure they would hold true for the Twin Cities…

Headed the right direction!  Long ways to go to get back below 5%, not even to mention 2% like we saw in the late 1990’s.     This is a good reduction and we should be happy for small gains.  Let’s hope for many more reports this direction.

As regular readers, you already know that the number one thing hurting our real estate market is the lack of jobs.  That is why I am watching the unemployment rates.

click to enlarge


Filed under Uncategorized

Housing Starts: Minneapolis/St Paul,Bloomington Metro Area 9/27/2011

This information was released by the US Department of Commerce: Census Bureau today.  It includes data up to August 1st, 2011.  Not surprising, but it is showing us we are still bouncing along the bottom.

Privately Owned Housing Starts: 1-Unit Structures for Minneapolis-St. Paul-Bloomington, MN-WI (MSA)

Source:              U.S. Department of Commerce: Census Bureau

Release:             Housing Units Authorized By Building Permits

Seasonal Adjustment: Not Seasonally Adjusted


click to enlarge

Here are the Permits/Housing Starts for 2011:

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


Leave a comment

Filed under Uncategorized

Mortgage Rates and Operation Twist – Day 6

Well, it looks like the Feds plan to lower rates may have backfired.  It is probably a bit early to make that conclusion, but the trend is beginning to point that direction.

Today the stock market rallied again pushing the Dow up about 146 point to close near 11,190.  The 10 Year Treasury went up 0.1120 (+5.88%) to close at 2.016.   That is trending higher which will push the mortgage rates higher if it continues.

Today’s Mortgage Rates from Edina Realty jumped about 1/4% on the 30 year fixed conventional today, probably due to yesterdays gain in the 10 Year Treasury.

Today’s Mortgage Rates

The current interest rates shown below are based on a purchase of a single-family, primary residence. For current refinance rates, contact us

as of 09/27/2011 02:38 PM Central

Product Interest Rate APR
Conforming1 and FHA1 Loans
30-Year Fixed 4.250% 4.434%
30-Year Fixed FHA 3.750% 4.550%
15-Year Fixed 3.250% 3.566%
7-Year ARM 2.875% 3.180%
5-Year ARM FHA 2.750% 2.908%
Jumbo1 Loans – Amounts that exceed conforming loan limits1
30-Year Fixed 4.375% 4.518%

Equal Housing Lender

There is a great article about The Twist from HousingWire:  Dallas Fed Chief Fisher not buying Operation Twist


Richard Fisher, president of the Federal Reserve Bank of Dallasis sticking to his contrarian view on the Federal Open Market Committee’s “Operation Twist” plan, saying it could be a confidence and jobs killer…

…”Implicitly, the program may also lift short-term sales, albeit mildly given the expectation that rates at the short end will remain at exceptionally low levels through mid-2013,” he said.

Fisher, along with Charles Plosser, president of the Philly Fed, and Narayana Kocherlakota of the Minneapolis Fed, once again dissented to the latest FOMC policy decisions, marking the most opposition on the committee in nearly two decades.

Read Full Article

Leave a comment

Filed under Uncategorized