Tag Archives: real estate market

Net New Renters 1.4 Million, Net New Home Buyers 0


Freddie Mac

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Freddie Mac released today its U.S. Economic and Housing Market Outlook for October showing that the rental market is doing well with many of households under 30 are opting for renting vs buying.  This is pushing the new households into “new renters” while adding no New Home Buyers.

If you have been reading this blog for a while, you will notice we have covered this in a bunch of posts. (pent up demand).   Although there is really nothing new, this is still a nice national perspective summary from the big picture.

“Much of the rental demand is from young and newly formed households who have decided to postpone homeownership in favor of renting during unsettled economic times. Indeed, the decline in the homeownership rate has been sharpest for those household heads under 30 years of age: While the U.S. homeownership rate has fallen about 1.5 percent over the past year (from 66.9 percent to 65.9 percent during the second quarter of 2011), owner rates have fallen by 4.4 percent (to 21.9 percent) for those under 25 years of age and by 7.0 percent (to 34.7 percent) for those aged 25 to 29 years,” said the Frank Nothaft, Freddie’s chief economist.

Outlook Highlights

  • Over the year ending mid-2011, the Census Bureau reported a net increase of 1.4 million households that moved into rental housing, a 4 percent rise in the number of tenant households in just one year.
  • The U.S. homeownership rate has fallen about 1.5 percent over the past year (from 66.9 percent to 65.9 percent during the second quarter of 2011) with owner rates falling by 4.4 percent (to 21.9 percent) for those under 25 years of age and by 7 percent (to 34.7 percent) for those aged 25 to 29 years.
  • Apartment rents, which had been flat to falling in many projects during the 2008-2009 recession, have begun to rise, albeit slowly.
  • New construction starts of apartments in buildings with at least 20 dwellings has picked up this year, and in the second quarter was the highest since the end of 2008.
  • Ten-year constant-maturity Treasury yields averaged 1.98 percent in September, the lowest monthly average since the Federal Reserve’s series began in 1953; these yields are a common benchmark for multifamily mortgage rates, and suggest that mortgage rates fell to new lows for multifamily lending in recent weeks.

Read the Full Freddie Mac October 2011 Economic Forecast

I believe if we can turn enough of the economic corner to allow these under 30 renters feel confident enough in their employment, they could enter the market and turn this housing market around in no time.  Sometimes I even wonder if we won’t be coming out of this down cycle straight into a housing boom as so many years of these first time homebuyers have been stuck into renting.  Time will tell.

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Weekly Real Estate Market Update: September 19, 2011


Last week’s real estate market update is in, for week ending September 10, 2011.  We are continuing to show the positive trend of increased sales and less inventory.  This is now 14 consecutive weeks of year-over-year declines in new listings.  This is also 30 consecutive weeks of Inventory declines. Pending Sales are also up for 18 consecutive weeks year-over-year increase.

Here is this reports figures:

New Listings:  -21.2%       Pending Sales:  +53%       Inventory:   -21.2%

Our inventory is now at 23,481.  We are at about 2005 levels of inventory, if this trend continues we could be seeing 2004 inventory levels soon, okay I am getting ahead of myself.  We are still awaiting the outcome of the foreclosure log jam begins let loose and how that might impact our market here.  I am sticking with my speculation that we have already cleared a lot of those loans in our area with Short Sales, but time will tell. 

Can you imagine what this might look like if we had low unemployment levels?  I imagine we would be seeing a healthy real estate market again.

Read Full Weekly Report from Minneapolis Area Association of Realtors

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Monthly Skinny: September 2011


Continued market improvement – good sign.  This wraps up the weekly market updates nicely, we should be getting the new weekly update tomorrow.  I will post that right away when I receive it, probably around 7pm. 

Nice little video from Minneapolis Area Association of Realtors about our Twin Cities September market conditions. 

 

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Monthly Skinny: August 2011 (twin cities real estate market update)


 August 15th, 2011 Market Update from the Minneapolis Area Association of Realtors.  They do a pretty good job of summarizing the market.   Inventories are down while prices are still dropping – however the good news is if the inventory keeps dropping then prices will begin to stabilize.  Remember we are getting close to a balanced market, to reach a balanced market we should have a 5 to 6 month inventory of homes – we are now at 7.6month supply.  Things appear to be getting better!

 

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