Duplex Chick

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Well, after weeks at the top of the charts, seller-assisted down payments fell completely out of the top 40 last week. And it appears the Minneapolis/St Paul housing market isn’t humming along the way it had as a result.

 

While the impact of the disappearance of the FHA down payment program is only a theory, statistics released by MAAR yesterday do reflect a drop in pending sales. Yes, sales were still ahead of the same week last year; to the tune of 3.5 percent. However, this figure is 15 percent below the increases marked in the last four weeks.

 

Of course, one week isn’t enough to either prove or disprove any theory. And home sales continue to surpass those logged in 2006; which most of us considered a pretty good year. Listings are also down 12 percent as compared to the same week last year, and 9.1 percent lower for the year. However, if this decline was in fact due to the end of programs like Nehemiah, Genesis and Ameridream, any thoughts as to the level of activity we’ll see as we near the $7500 tax credit deadline?

 

The charts for the small multi-family market, on the other hand, continued to dance right along. Pending purchases were up a whopping 369.23 percent over last year’s figure. A full 92 percent of the transactions for the week ending October 6 involved lender-involved seller. Just 61.5 percent of last year’s activities included lender involvement.

 

It is worthy to note that the average price of the 48 multi-family units whose sellers accepted purchase agreements was $98,082. The average sales price for the properties sold last year, however, was $163,500. A 40 percent weekly drop certainly isn’t indicative of an annual total. However it is tough to imagine that next year’s figures for the first week of October will reflect anything like a similar decline.

 

It must be a great time to buy.

 

Comment

Last week, the National Association of Realtors reported the Pending Home Sales Index (PHSI), which is an indicator based on purchase agreements signed in June, rose 5.3 percent nationally over their May mark. While an improvement, this number is still 12.3 percent below the June 2007 mark.

Again, while this data reflects activity in the single family home, town home and condo markets, it is nonetheless critical information to have. When it comes to small multi family property, owner-occupied duplex sales probably most closely mirror single family statistics. Many home-owners find duplexes to be an affordable entry point into more expensive neighborhoods, or a means of buying a little more house in such a location.

What’s especially interesting to note is there were gains nationwide. Here in the Midwest, the index was up 1.3 percent over May, but was 13.3. percent below a year ago. In the South, there was a 9.3 percent increase, which is nonetheless, 16.6 percent below June of last year. In the West, the index rose 4.6 percent in June, and while still lagging, this figure is just 1.7 percent below last year’s mark. Meanwhile, in the Northeast, the June figure rose 3.4 percent, but trailed last year’s volume by 15.4 percent.

The always optimistic NAR also projects that as many as 2.5 million first-time home buyers will take advantage of the $7500 temporary tax credit in the new housing bill. If they do, existing-home sales would be likely to rise 7.0 percent in 2009 over this year’s expected figure.