.

The National Weather Service, on the other hadn, is forecasting 12-20 inches for the Twin Cities and much of central Minnesota.

Top 11 Twin Cities Snowfalls – will this storm end up on this list?

Regardless of if it is 6″, 8″ or 20″, road conditions are likely to deteriorate through Friday… remember that no holiday plan is worth dying for… be safe!

Below is a list of the center’s available fact sheets:

  
The best thing of course if for you to give them a call and speak with a foreclosure counselor directly:

Phone: (651) 659-9336
Toll – Free: (866) 462-6466

The Minnesota Home Ownership Center is pleased to announce a new pilot program that may assist families AFTER the foreclosure of their home with up to $2,500 to relocate and secure alternative housing.  Funding for this pilot program has been provided by the Saint Paul Foundation Community Economic Relief Fund.

For now, homeowners being displaced must have owned in Dakota, Ramsey or Washington Counties during this pilot program.  Depending on need, and availability of future funding, the program may be expanded.

Funds may be used for:

Moving expenses
Security deposits
Up to half of monthly rent for first three months
Utilities (gas, electric, water)

Read the rest of the blog post here.

I’ve worked with some great buyers and sellers this year and the last few months saw many of my clients complete their real estate transactions so that they are now spending Thanksgiving in their new homes.  While the housing market has been difficult, this year will be my 2nd best year in sales and makes my last 3 years the best years in the business for me – no easy feat, believe me!

Have a great holiday and come back next week for some new content that I hope will knock your socks off!

Click on the picture for a larger version.

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Here’s how to know if buying a foreclosure or short sale is right for you.

This quarter’s report continues to show the same trends we’ve seen all of 2008, mainly an increase in the market share of lender mediated MLS listings both for sale and those that sold in the quarter.  Traditional sellers are very seasonal and so while the fact that 46% of sales and 42% of new listings in Q4 were lender mediated is very notable, it is somewhat inflated by the seasonality.

While some trends have certainly continued from previous quarters, we have seen a new trend develop as well: the Q2-Q3-Q4 period showed a relative peak of new lender mediated listings coming on, and Q4 showed our first drop in both lender mediated new listings inventory for sale at quarter-end.  Prior to Q2 2008 we saw dramatically more new lender mediated listings each quarter since 2006, while the Q2-Q4 period demonstrated a stop to that growth, at least for now.  There’s no way to know whether this near-term peak will turn out to be the long-term peak of this market activity or simply a stepping block to higher volume in 2009 but the fact that this trend is solid for 3 straight quarters is certainly an optimistic indicator.

Hennepin County, who publishes their sheriff sales online for a rolling 12 month period, reported 550-700 sheriff sales each month for all 2008, with a significant trend down since July 2008.  November and December’s relatively low number of foreclosures may be at least partly attributable to Fannie Mae and Freddie Mac’s decision not to take foreclosure actions from Thanksgiving through the end of January (it was extended).  While Hennepin County is only one of 13 counties in the RMLS’s definition of the Twin Cities, it is by far the largest in terms of foreclosures and is a good (but not complete) indicator of what is going on in our market on the foreclosure side of things.  Keep in mind that the Lender Mediated report that Jeff Allen I produce includes foreclosures AND short sales while this data is only sheriff sales, which is a middle-step in the foreclosure process.  Most homes take 6-8 months after the sheriff sale to get listing on the MLS.

But Wait!  There’s Much More!

I’m glad you kept reading… this is where it gets really good.  For the first time in the Twin Cities, and I believe the first time anywhere in the country, we are able to release city/area level lender mediated sales information.  While the metro-wide reports are very helpful, they do not adequately explain what is happening in individual communities throughout the area.  Some communities are barely impacted by these listings, while other communities find that well over 50% of their recent sales and current inventory for sale lies in foreclosures and short sales.  It also demonstrates using actual market sales information that the higher the proportion of lender mediated sales you have in an area, the more “pain” the traditional sellers in that community suffer as well, in terms of more significant year-over-year median sales price decreases.

As every expert in this field has said, this housing market is very localized and these new reports help give a better glimpse into how true that statement really is.  While this information is very helpful, it can sometimes be misleading as well.  We are working with smaller sample sizes when we get down to the local level and in many communities there simply was not enough data to accurately report what is happening, so we didn’t publish data in those communities.  In the communities we did publish, there is the occasional “huh?” moment where the data reported simply doesn’t match up with the daily experiences in the market.  This could be because of the low sample size, which allows individual listings to have a major impact on the results, or it could be because what is selling today is different than before… i.e. some communities have very few Traditional Seller townhouses and condos selling but many single family houses selling so the Median Sales Price actually is higher this year over last year.  It isn’t that prices increased, but that the “typical” house selling this year is at a higher price point.  Unfortunately there wasn’t a reasonable way for us to take those kind of events into account and so we leave that interpretation to you.  Take a look at price per square foot as another good indicator of value changes… while this too can be skewed in some cases, it seems to be reporting numbers that FEEL more accurate to me in terms of change year over year than the Median Sales Price sometimes suggests.

My Idea:

The U.S. Government should set up another Government Sponsored Enterprise (GSE) charged with providing liquidity and stability to U.S. housing’s jumbo mortgage market.  Jumbo mortgages are necessary on loan amounts above $417,000 to $625,500 depending on the affordability of homes in each market.

If we look back to 2005, jumbo mortgages could be had with 5% down (with a 2nd mortgage for the amount over 80% LTV) and at mortgage rates often only .25% to .75% more than conforming conventional rates.  Flash forward to today and we find that most jumbos require at least 20% down (if not more… 2nd’s are practically non-existant) and rates I’ve seen quoted recently are 2% – 2.5% higher than conventional conforming rates, which lately means 7% or so.  I think everyone will agree that jumbo lending suffered from lax requirements and was too cheap for the inherent risk in the product but I believe the pendulum has swung too far the other direction and that today’s terms and rates are out of line for real risk.

Some people will argue that the government should not “bail out the rich” but this isn’t a question of bailouts, this is a question of liquidity and stability.  Today most banks want nothing to do with any loan that they can’t resell to Fannie Mae, Freddie Mac, or Ginnie Mae because they do not have the asset base needed to hold these loans for their 30 year terms, they often immediately resell them to the GSE’s or another party.  Since jumbo mortgages have no secondary market, most banks have to hold any jumbo mortgage they write.

$100’s of billions have been offered up to financial institutions to improve liquidity in the lending market and yet there has been no improvement in the jumbo mortgage market and in fact it looks like this segment has actually become worse in recent months.

Enter a new GSE: Fattie Mae

Fattie Mae’s sole focus will be restoring liquidity and stability to the jumbo mortgage market.  They shall do so in much the same way that Fannie Mae and Freddie Mac run: Fattie Mae will buy jumbo mortgages from the originating banks and repackage them as mortgage backed securities and resell those in the open market.  Down payment requirements will continue to be higher than in the past… maybe we keep a 20% down payment… but because lenders can resell these loans to Fattie Mae and Fattie Mae can offer better interest rates when they repackage them as mortgage backed securities, the interest rate spread between conforming and jumbo loans should narrow substantially.

The nice part about this is that like much of the rest of the stimulus that the government has employed, it should be long-term revenue neutral if not even a profit making enterprise since the government is not subsidizing anything but rather “market making” for a product that today has no effective secondary market.  In the future the secondary market for jumbo loans will likely improve but even in that situation a GSE like Fattie Mae would still have significant value… just like Fannie Mae and Freddie Mac have for decades.

Others have discussed this general concept, however no one else has come up with a name as cool as Fattie Mae.  I can’t wait to see the letterhead!

While there are few co-ops in town so this is a limited issue, the issue of unsold units in association communities is a far larger one.  If you buy/have bought in to an association-run development (condo/townhouse) and many units remain unsold, those units are not contributing revenue to the association, which can leave the association in financial distress.  In that situation you wouldn’t lose your home, but you certainly could see monthly dues rise dramatically.

Over the 4th of July activity slows a little as buyers and sellers spend time with family, friends, and fireworks.  There’s still a lot of activity out there though so the quiet will be short-lived.

While I appreciate that the Star Tribune is trying to get more interactive with their stories, I believe they need better oversight of their “Featured Comment” tool. Kinda makes them look stupid in my opinion. Click the screen capture below to get the full-size view.

Minneapolis/St. Paul Real Estate Market Stats for May 2008 with commentary.

http://www.flickr.com/photos/27215653@N05/sets/72157605363818571/