Is eight really enough? How about way too much? If you’re a spin-happy Minneapolis Realtor, it’s not so bad. In fact, we could just be ready to begin a great journey together. According to the Minneapolis Area Association of Realtors (MAAR), the Twin Cities now has 8.11 homes for sale for every buyer. That’s a 10.4-month supply of housing. Prices have declined on average 15 percent this year. And nationally, pending homes sales fell 4.7 percent in May, despite the number of inexpensive lender-owned homes (foreclosures and short sales) and economist expectations that home sales would rise slightly in the spring.
Regardless of these numbers, the National Association of Realtors and the Minneapolis Area Association of Realtors want you to know something: “It’s a great time to buy!” Why? Because like last month and the month before and the month before that, the housing market is about to rebound. Or is it?
In a July 2 blog post on “The Skinny,” the MAAR blog, one Realtor claims we “appear ready” to experience a rebound. “We are justified in celebrating the encouraging signs, but the housing market continues to face a variety of challenges—a large oversupply of homes for sale, lender-mediated property sales, tightened lending standards, tepid buyer activity, weakened home prices and home owners in positions of negative equity, among other grimace-inducing factors,” he writes. “These challenges will thwart a quick rebound from our current conditions and make the road back to a balanced market a long and gradual journey. The encouraging news today is we appear ready to begin the return journey.” (Emphasis added.)
Of course, who isn’t ready to “begin the journey,” with homes sitting on the market for 159 days, negative equity becoming a major issue for many homeowners who didn’t put 20 percent down, and renting becoming a more money-wise option than buying in the Twin Cities? (On average, renters in the Twin Cities pay $848 for a two-bedroom pad, while homeowners pay $1,236 a month for a “low-cost” mortgage, and home prices are expected to dip further before it’s all over.)
The National Association of Realtors uses the same “almost maybe possible?” spin in its analysis of the continued decline. In its press release noting the surprising May dip, the headline reads: “Home Sales to Vary in Narrow Range, Then Rise in Second Half.” It’s not much different from what they promised in previous months, “a broader upturn” in 2008 that’s never come. And despite the lack of a broader upturn, rise, or “beginning of a journey,” NAR’s president offers this not-so-subtle warning to those holding out on getting in to a new home now: “Home buyers are getting a great deal right now. Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009.”
There are those words again: “appear,” “could.” It’s sort of like reading the Weekly World News of Real Estate, only without Bat Boy and beaded ladies and the bathroom-break payoff.