As the first month of the year trots onward, so do home buyers. They posted increased activity levels compared to the same week in 2011. Seller activity slowed compared to last year, however. Inventory declines effectively positioned many local markets into a more balanced state – particularly toward the end of last year. Increased seller activity in the coming months could slow or even reverse that trend. Don't fret. Not only is an increase in new listings perfectly normal for this time of year, but improved absorption rates and seller concessions could begin to stew into seller confidence.

In the Twin Cities region, for the week ending January 21:

• New Listings decreased 8.2% to 1,092
• Pending Sales increased 29.0% to 730
• Inventory decreased 23.2% to 17,822

For the month of December:

• Median Sales Price decreased 6.5% to $145,000
• Days on Market decreased 2.1% to 141
• Percent of Original List Price Received increased 1.7% to 90.6%
• Months Supply of Inventory decreased 33.7% to 4.7

Click here for the full Weekly Market Activity Report.

From The Skinny.

Last week, the Mortgage Bankers Association reported that mortgage applications increased more than 23.0 percent from the week prior. The fine print stated that most of the increase was driven by refinancing activity, given record low rates. Residential construction data also provided glimmers of hope. By now, many have surely noticed that the supply-demand balance is changing. What some may not realize is that this is a leading indicator, while home prices are a lagging indicator. Price appreciation is the final phase of recovery. Excess supply is down–in some areas, it's way down. Purchase demand in most areas strengthened throughout the second half of 2011. For sellers, it's less scary out there. For buyers, it's still a once-in-a-lifetime opportunity.

In the Twin Cities region, for the week ending January 14:

• New Listings decreased 5.2% to 1,216
• Pending Sales increased 28.4% to 728
• Inventory decreased 23.8% to 17,690

For the month of December:

• Median Sales Price decreased 6.5% to $145,000
• Days on Market decreased 2.5% to 140
• Percent of Original List Price Received increased 1.7% to 90.6%
• Months Supply of Inventory decreased 35.6% to 4.6

From The Skinny.

2011 by the Numbers

• Consumers purchased 41,429 homes, up 8.2 percent from 2010 and—excluding 2009—the highest since 2006.
• Sellers listed 68,875 new homes on the market, down 15.8 percent from 2010 and the lowest level since 2002. Inventory levels dropped 28.7 percent from 2010 and are at the lowest level in 8 years.
• Months supply of inventory—the time it would take to sell off all active properties—dropped 36.5 percent to 4.5 months.
• The median sales price fell 11.7 percent to $150,000.
• Precisely 50.0 percent of all closed sales were either foreclosures or short sales, up from 47.9 percent in 2010 and 48.9 percent in 2009.

"We are pleased with the recovery we saw in 2011," said Richard Tucker, President of the St. Paul Area Association of REALTORS®. "Median sales price reflects the mix of properties sold during the year—and in 2011 a lot moved in that lower bracket. Price increases will be the final piece of the recovery."

Distressed properties were the driving factor of home prices, selling for roughly 60 cents on the dollar compared to traditional homes.

"Homeowners need to remember that median sales price does a better job of reflecting what's going off the market as a whole than representing the home values in a given area—each area is unique," said Cari Linn, President of the Minneapolis Area Association of REALTORS®.

Improvements in the local economy will boost the Twin Cities real estate market in 2012. The outlook is positive: steady hiring, lessening layoffs and record low unemployment are all reasons the area continues to outperform the nation.

For other year-end residential real estate statistics and for stand-alone December 2011 data, please visit www.mplsrealtor.com and www.spaar.com.

The first full week of 2012 shows that buyers were off to a busy start while seller activity cooled down. Sales volumes easily beat the same week in 2011. The inventory drops that many communities saw during the second half of last year should translate into further positive news for sellers. Interest rates are expected to hold the low ground, enriching the buying environment for consumers. It's early now. The spring market will ultimately be the major tell as to the rate of recovery throughout the year. Today's lesson: Maintain a long-term perspective and watch trends develop beyond one week of data.

In the Twin Cities region, for the week ending January 7:

• New Listings decreased 14.6% to 1,266
• Pending Sales increased 13.8% to 561
• Inventory decreased 24.5% to 17,302

For the month of December:

• Median Sales Price decreased 6.5% to $145,000
• Days on Market decreased 2.5% to 140
• Percent of Original List Price Received increased 1.7% to 90.6%
• Months Supply of Inventory decreased 35.6% to 4.6

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. Use it to further your understanding of the Twin Cities 13-county residential real estate marketplace.

From The Skinny.

By: John Riha HouseLogic.com

Every square foot of your home is valuable. Here are seven storage solutions that take advantage of underutilized nooks and crannies. And just for fun, we did some back-of-the-napkin calculations based on the average price per square foot of a U.S. home ($81)—so we could attach a theoretical value to the bonus space.

Stairway to Storage Heaven

Tuck pull-out drawers under sturdy stairs. They’re ideal for stashing extra linens and seasonal items. Each drawer provides about two square feet of storage. If you really could calculate this on a value per square foot realized, that’s roughly $162 worth of extra space per drawer!

It Came from Below!

Basement crawl spaces or open areas under apartment floors can be lined with shelves and outfitted with folding stairs to hoard anything. A finished 10-square-foot crawl space uncovers about $8,100 of space value and can even lower your energy bills.

Sleep-Away Storage

Not enough room for a Carrie Bradshaw closet? No problem. This mattress lifts to reveal a hidden compartment great for stashing bulky blankets. It could save you about $200, the price of a linen cabinet, and it provides about 20 square feet or about $1,587 of extra storage space.

Locker Room

Gain more kitchen space without a costly remodeling job. Reclaimed high school gym lockers sport a new use as built-in pantry compartments. These add 18 cubic feet or $243 in square feet of extra space.

Hidden Litter

Some things are best left hidden, and kitty’s business is one of them. An inexpensive, storage cabinet doubles as a rest stop for this tabby, who enters and exists via a small framed opening. Store the litter box and all its accoutrements in one spot and gain about $205 worth of storage space.

Overhead Room

Give your storage space a lift—overhead areas, such as narrow hallways, make an ideal place for floating shelves and cabinets. You could gain up to 2.5 square feet, valued at $203 of space, in no time!

Seasonal Stash

Keep wrapping paper out of sight but not out of mind by suspending it from your closet ceiling on a simple cradle of wire. It’s easy to reach but won’t get torn or creased. In a closet that’s 6 feet wide by 2 feet deep, this trick makes 12 more square feet of storage worth about $972.

Here’s a look at price trends and how they differ between distressed and nondistressed homes.

By Nick Timiraos of The Wall Street Journal

Home prices are falling again, but some analysts see a silver lining because the prices of homes that aren’t selling out of foreclosure have been holding steady.

CoreLogic reported that home prices in October declined by 1.3% from September and by 3.9% from a year before. A separate index released in early December by LPS Applied Analytics showed that home prices in September had dropped by 1.2% from August

"Many housing statistics are basically moving sideways," said Mark Fleming, chief economist at CoreLogic.

Still, the CoreLogic index shows an important emerging trend in which home prices — excluding distressed sales — are stabilizing.

What’s the difference between distressed sales and nondistressed sales?
Unlike traditional owners, banks are often faster to cut prices in order to unload properties quickly — or what are called "distressed" sales. The upshot: The more homes being sold by lenders in any given month, the faster prices tend to fall.

This was clear throughout the initial years of the housing bust. Prices declined most sharply in 2008 as banks dumped foreclosed properties at fire-sale prices. Owner-occupants are less likely to list their homes for sale in winter, too, which means that each winter prices drop because distressed sales account for a growing share of sales.

Are prices of distressed homes falling at the same rate as nondistressed homes?
That’s been the case up until recently. While home prices overall were down 3.9% from one year ago, prices excluding distressed sales were down just 0.5%. In September, total prices were down 3.8% from one year ago, but nondistressed prices were down 2.1%.

This shows that while price declines are resuming, they are not yet falling from one year ago for nondistressed homes. In fact, during the first nine months of 2011, prices of nondistressed homes remained relatively stable, with year-over-year declines between 2% and 3%.

Analysts at Barclays Capital, in a report published in early December, called this "the most important trend in the housing industry right now."

Why would any stabilization of nondistressed prices matter?
If it’s true that prices of nondistressed homes are stabilizing, even as distressed homes continue to fall in price, it would mean that a distressed home is "increasingly being seen as a poor substitute for a nondistressed home," writes Stephen Kim, a Barclays housing analyst. He says it’s possible that the "bifurcation between distressed and nondistressed homes will only widen with the passage of time."

Won’t the overhang of foreclosures put pressure on nondistressed prices anyway?
That’s all too possible. More than 2 million loans are in some stage of foreclosure, and it may be too early to argue that those won’t in some way affect the sale prices of nondistressed homes. For one, homes that sell out of foreclosure at significantly lower prices could be used by appraisers as "comparable" sales, which may make banks less willing to lend at an agreed sale price for a nondistressed home.

In certain markets where many homes are selling out of foreclosure, it’s hard to simply set aside distressed homes. "You can’t deny the fact that if half of homes that sold in San Diego in a given year were distressed, that is the trend," said Kyle Lundstedt, managing director at LPS.

What could happen if this trend holds up, with distressed prices falling and nondistressed prices staying flat?
It could stabilize something else: homebuyer confidence. "There is nothing that strikes fear in a homeowner’s heart than to hear that his home value has declined," Kim writes. "But if it was home-price trends that got us into this funk, it stands to reason that a recovery in sentiment will be similarly ushered in once price declines have abated — which is precisely what the CoreLogic price data shows us."

Most observers would agree that this year's housing recovery was not as robust as many had hoped. That said, a handful of things went right. Supply-side market correction took the guise of inventory declines and a pullback in listing activity. Consequently, sellers generally faced fewer challenges than in the past. Driven by improvements in the economy and record-low mortgage rates, purchase demand strengthened organically, independent of government incentives. Those sales gains dovetailed with falling inventories to move the market back toward balance. Nobody knows what 2012 will bring, but it's a safe bet that these positive developments will continue to evolve.

In the Twin Cities region, for the week ending December 31:

• New Listings decreased 11.6% to 593
• Pending Sales increased 41.7% to 564
• Inventory decreased 24.9% to 18,341

For the month of December:

• Median Sales Price decreased 5.6% to $145,000
• Days on Market decreased 2.4% to 140
• Percent of Original List Price Received increased 1.8% to 90.6%
• Months Supply of Inventory decreased 36.2% to 4.6

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. Use it to further your understanding of the Twin Cities 13-county residential real estate marketplace.

From The Skinny.

As another new year approaches, we find ourselves settling in for the holidays, which typically come with slowed real estate activity. In the first week of the full holiday shopping season, we saw sales increase. We're talking about residential real estate, of course, although retail performed surprisingly well, too. Sellers listed fewer properties during the week, choosing instead to hunker down in their living rooms rich with the aromas of pine-scented candles and cinnamon cider sticks.

In the Twin Cities region, for the week ending December 3:

• New Listings decreased 9.3% to 1,006
• Pending Sales increased 36.4% to 885
• Inventory decreased 22.9% to 20,031

For the month of November:

• Median Sales Price decreased 9.9% to $149,500
• Days on Market decreased 1.8% to 135
• Percent of Original List Price Received increased 1.0% to 90.9%
• Months Supply of Inventory decreased 30.5% to 5.7

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. Use it to further your understanding of the Twin Cities 13-county residential real estate marketplace.

From The Skinny.