There's no way to be certain what 2012 will bring. However, a few things do seem clear enough to make some assessments.
First, 2011 was not the recovery year it was expected to be. It was yet another “transition year” for most.
Second, multi-decade low mortgage rates and suppressed home prices coalesced to form an attractive purchase environment. And buyers did just what their name implies. This has driven down inventory levels in many locales, which—thirdly—nudged the market balance toward equilibrium.
Here's how the final month of 2011 concluded the year.
New Listings in the Twin Cities region decreased 14.9 percent to 3,374.
Pending Sales were up 24.3 percent to 2,929.
Inventory levels shrank 28.7 percent to 16,191 units, extending the signature trend of 2011.
Prices were off a bit. The Median Sales Price decreased 6.5 percent to $145,000.
Days on Market decreased 2.4 percent to 141 days.
Absorption rates improved as Months Supply of Inventory was down 35.7 percent to 4.6 months.
Ultimately, the upcoming spring market should be a major tell about the future direction of housing. Sellers are seeing multiple-offer situations; buyers are seeing sub-4.0 percent loans; supply-demand trends are more balanced. When it gets down to it, that's a stable foundation and a far cry from 2009. While the fundamentals are better, the foreclosure situation and political unknowns remain wildcards.
The attached Weekly Market Activity Report is produced by the Minneapolis Area Association of REALTORS® (MAAR) for REALTOR® members and interested parties on a weekly basis.
Week of January 28
Whether motivated by the election cycle, a jump in employment, improving housing market metrics or the best start to a year for the S&P 500 since 1989, home buyers posted increased activity levels compared to last year. Consumers signed more purchase agreements but sellers entered into fewer listing contracts. Changes in supply-side metrics confirm this, suggesting that relatively less new product is entering the market compared to buyer demand. That's helped other metrics return to more friendly territory. Whatever the reason, it's good to see that vote of confidence.
In the Twin Cities region, for the week ending January 28:
• New Listings decreased 17.5% to 1,090
• Pending Sales increased 22.9% to 833
• Inventory decreased 23.5% to 17,762
For the month of December:
• Median Sales Price decreased 6.5% to $145,000
• Days on Market decreased 2.3% to 141
• Percent of Original List Price Received increased 1.7% to 90.6%
• Months Supply of Inventory decreased 33.3% to 4.8
Minneapolis Lakes Office Showing Data WEEKLY SHOWING UPDATE
Under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million -- if that debt was on your principal residence.
If the debt was on a second home or an investment property, then you are out of luck; the amount that was forgiven (or canceled) is taxable income to you.
If your canceled debt was on a refinanced loan, the law is murky. If you used the refinance proceeds to substantially improve your house, then there is no tax to pay. But if you used those proceeds for other purposes -- regardless of how significant the investment may have been -- the cancellation creates a taxable event for you.
The IRS has an excellent, free, publication on this topic, called "Canceled Debts, Foreclosures, Repossessions and Abandonments." It is Publication 4681, and will soon be published at the following link on the IRS website -- http://www.irs.gov/pub/irs-pdf/p4681.pdf -- or by calling (800) 829-3676, or (800) TAX-FORM.
Data prepared by online real estate valuation and search company Zillow -- based on the company's home-value estimates and its Zillow Home Value Index, which is generated from those value estimates -- reveals that six of the 10 metros with the most severe 5-year fall in value are in California, while two are in Florida and the other markets are in Arizona and Nevada.
Merced, CA Modesto, CA Stockton, CA Las Vegas, Nevada Vallejo, CA Salinas, CA Daytona Beach, FLA Bakersfield, CA Fort Meyers, FLA Phoenix, AZ
2010 Home sales lowest level in eight years
Minneapolis / St. Paul Business Journal - by James Anderson , Staff Writer
Date: Thursday, January 13, 2011, 11:04am CST
Selling a home in 2010 was no easy task, as the number of homes sold dropped to the lowest level seen in eight years.
There were 37,608 homes sold last year in the Twin Cities metro, down 16.8 percent from 2009, according to the Minneapolis Area Association of Realtors.
The number of homes brought to market also hit an eight-year low of 82,127, down 1.4 percent from 2009.
The numbers weren’t all bad: There was a 2.3 percent gain in median sales price from the previous year, due in large part to more upper-bracket home sales.
MAAR predicts listings, sales and median price to all increase in 2011, though most had also hoped that 2009 would be rock bottom for the real estate market — not 2010.