Twin Cities home prices are up again, but still below '06

  • Article by: KARA McGUIRE , Star Tribune
  • Updated: March 10, 2010 - 11:05 PM

Buyers hoping to purchase before the home buyer tax credits expire helped to rev up the Twin Cities market in February.

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american47Mar. 10, 10 7:44 PM

What is it with you reporters. You take home sales and average them and then report homes values are up or down based on nothing more than an average of the price of homes sold this month versus a year ago in the same month. If people buy slightly more expensive homes than they did a year ago (larger, more bedrooms, etc) you report that as "rising home prices"! How ignorant are you ?

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JamessuttonMar. 10, 10 7:54 PM

The same amount of cash will buy you twice the house in a couple of years. Foreclosures will soon start snowballing again, the massive propping up of house prices by the federal government will end soon, and higher future interest rates all mean one thing: look out belooowwwwww! :)

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ussforrestalMar. 10, 10 7:58 PM

So now journalists believe they should compare everything to when prices were at a bubbled peak. yay. keeping america informed, as usual.

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swmnguyMar. 10, 10 8:04 PM

Good question. A year-over-year figure like $ paid per square foot would be useful. Otherwise I can see how it might be hard to break down the data as you suggest.

From my own experience I understand there's no action in the market over $250k. Houses priced under $200k that are in good shape and fairly priced are going fast. Mine went in hours, for more than I expected (umm, $8000 more? Coincidence?).

There's something fishy in this market for sure. I'm not sure how to get the data that you could break down to show it, though.

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swmnguyMar. 10, 10 8:07 PM

I certainly considered following the path you suggest, but things lined up differently for us.

Anyway, for a lot of buyers, the number that counts is the monthly payment. As rates go up, as they will, prices will need to come down to meet up at that monthly payment one can afford. Cash, as you point out, is king now, and will be even more so then.

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notmetooMar. 10, 10 8:11 PM

Once we reach full employment again (however that will be defined in the new economy) plus two years=end of foreclosure spike.

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swmnguyMar. 10, 10 8:11 PM

+1.

Unfortunately, a lot of people have set their price expectations on those peak bubble prices. Or worse, they bought then and are forced to compare everything to that level.

Far better, of course, to look at long-term data like Case-Shiller. But that's really depressing, because it shows that prices are still higher than historical norms would indicate. If median income is somewhere around $60k, the median house should be around $150k. And, reversion to the mean being generally inevitable, it will be.

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jk12345Mar. 10, 10 8:26 PM

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the shivering grasshopper calls a press conference anddemands to know why the ant should be allowed to be warm and well fed while others are cold and starving. CBS, NBC, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. America is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so? Kermit the Frog appears on Oprah with the grasshopper and everybody cries when they sing "its Not Easy Being Green." Jesse Jackson stages a demonstration in front of the ant's house where the news stations film the group singing "We Shall Overcome." Jesse then has the group kneel downto pray to God for the grasshopper's sake. Al Gore exclaims in an interview with Peter Jennings that the ant has gotten rich off the back of the grasshopper, and calls for an immediate tax hike on the ant to make him pay his "fair share." Finally, the EEOC drafts the "Economic Equity and Anti-Grasshopper Act", retroactive to the beginning of the summer. The ant is fined for failingto hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government. Hillary gets her old law firm to represent the grasshopper in adefamation suit against the ant, and the case is tried before a panel of federal judges that Bill appointed from a list of single-parent welfare recipients. The ant loses the case. The story ends as we see the grasshopper finishing up the last bit ofthe ant's food while in the ant's old house, it crumbles around him because he doesn't maintain it. The ant has disappeared in the snow. The grasshopper is found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.

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jo1glexMar. 10, 10 8:34 PM

Then why is there a bursting bubble in Commercial Real Estate too? Why are Jumbos and Alt-A's headed for trouble? Bear Stearns, Merrill Lynch and AIG wouldn't have collapsed if it were just the grasshoppers wrecking it for everyone.

Don't swallow the line that lets the real villains off the hook, or they'll do it to us again. The truth is a lot worse. The real estate market collapsed because it was a bubble. It became a bubble because of financial manipulation. A huge amount of money got sucked out of our economy and all of our pockets.

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denisjahMar. 10, 10 8:36 PM

The issue being debated by some here is a silly issue. Some are arguing essentially that the sample may have changed... that the house last years were apples and this year are oranges. Normally that would be an interesting question but here the "sample" is the universe - all houses sold. The data is valid for that question because it contains all data points. It may not be valid for the question: are a subset of homes costing $500 K or more going up in price? But that is not the question it set out to answer. Have another question? Do your own survey.

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