Rochester MN Real Estate Market Blog

There were 1231 homes for sale last week in Rochester Minnesota, with an average list price of $231,205 and an average of 157 days on the market.  This includes 85 new listings (average list price of $198,308) and 17 listings coming back on the market (average list price of $211,494 and 249 days on the market). 

Last week 58 listings went to pending (under contract); average list price was $206,284 and average of 125 days on the market.  Thirty-four homes sold, with selling price 90.74% of the list price ($221,196 and $243,775 respectively).

 There are currently 1200 homes for sale.  The average list price for these properties is $233,284; average market time is 158 days.

After two weeks of nice declines, mortgage rates rose during the week, back to the levels seen at the end of February. March was an extremely volatile month, with large daily swings a common occurrence. Investors bought mortgage backed securities during periods of increased concern about the stability of the credit markets. Just as quickly, they sold mortgage backed securities when the fears eased. Last week, investors generally felt that the Fed’s rate cuts and other actions were sufficient to combat the difficulties in credit markets, demand for mortgage investments fell, and mortgage rates rose. Mortgage rates were also hurt last week by a series of Fed officials who talked tough about inflation. Higher inflation is bad news for mortgage markets, as investors require a higher yield to offset the inflation. With all the attention on inflation, Friday’s release of the Fed’s preferred inflation indicator was highly anticipated. The February Core PCE price index rose at a 2.0% annual rate, as expected, which was at the upper boundary of the Fed’s perceived comfort zone. In the housing sector, the news was somewhat encouraging. February Existing Home Sales came in stronger than expected. The inventory of unsold homes declined modestly, while median prices fell. Sales activity has held in a narrow range since September, and the chief economist of the National Association of Realtors (NAR) suggested that the data was “another sign that the market is stabilizing”. February New Home Sales also came in a little higher than the consensus. Separately, the government’s OFHEO housing index showed that January prices were down 3% from one year earlier.  

The Rochester, Minnesota area housing market had 87 new residential listings last week (March 10 to 16, 2008) with an average list price of $202,287.  Eleven residential properties came back onto the market with an average list price of $235,590 and average market time of 261 days.

 There were 44 homes going under contract (to pending) last week; average list price for these properties was $186,734.  At 89 days, the average time on the market from listing to pending was about three months.

Last week 8 homes closed in Rochester.  At $137,401, the average sold price was 97.1 percent of the average list price ($141,499).  These homes had an average of 81 days on the market.

Ten listings expired, nine canceled and 7 were withdrawn.

There are currently 1,141 homes for sale in Rochester, Minn with an average list price of $234,517 and average market time of 165 days.

Tuesday, the Fed’s surprise announcement of a new $200 billion lending facility led to a 400 plus point rally in the Dow, the biggest one day percentage gain since March 2003. The effect on mortgage rates was also favorable. The newly available funds will make it more appealing for financial institutions to borrow money from the Fed, which is expected to increase the demand for mortgage backed securities. Mortgage markets should benefit, and the spread between mortgage rates and Treasury yields narrowed significantly, reversing the trend from the prior week.

Later in the week, sentiment turned sour, however. Investors were reminded on Thursday that the problems in credit markets were not yet over. Carlyle Capital, a large hedge fund, defaulted on $16.6 billion of its debt, and the collateral was mostly mortgage backed securities. An even bigger jolt hit the markets on Friday. Bear Stearns, a major Wall Street investment bank, announced that they would receive financing to address liquidity problems. The repercussions of losses at financial institutions continued to be felt, and investors responded to the uncertainty by shifting out of the stock market and into the relative safety of fixed income investments including mortgage backed securities. Mortgage rates fell significantly during the week, reversing a similar sized rise the prior week. That said, not all areas of the mortgage market benefited equally last week. Demand for securities backed by Adjustable Rate Mortgages (ARMs) dropped sharply, and ARMs rates did not share in the declines seen in fixed rate mortgages. The Jumbo Mortgage sector experienced liquidity issues very similar to last August as sellers far out numbered buyers in this arena driving Jumbo interest rates significantly upward.

The economic data released last week was favorable for mortgage markets. Notably, the closely watched Consumer Price Index (CPI) inflation data came in much lower than expected. The core rate was still running higher than the Fed would like, but investors were prepared for worse news. In addition, the Retail Sales data fell far short of the consensus forecast. Slower economic growth typically means lower future inflation, and mortgage markets reacted positively to both economic reports.

There are currently 1,115 active listings for sale in the Rochester, Minnesota residential real estate with an average list price of $236,404 and an average of 168 days on the market.

Last week (March 3 through 9, 2008) there were 98 new listings with an average asking price of $215,831, and 17 listings came back onto the market last week; average list price for these properties was $302,098 and average market time was 268 days. The 40 listings that went under contract (to pending) had an average list price $172,787 and market time of 125 days. There were 7 expired listings in Rochester and 8 canceled.

Nineteen properties sold last week with an average list price of $175,382 and 126 days on the market, and an average sold price of $172,776.

In a week packed with major economic news, the biggest story for mortgage markets was the widening spread between mortgage backed securities and Treasury bonds. Issued by the US government, Treasury bonds are generally considered to be the benchmark for a “safe” security, since the risk of default is extremely low. During the week, the economic news was mixed, and Treasury rates barely changed. Mortgage rates, however, jumped by about half a point. Investors are demanding a higher return from mortgage backed securities, and the result is higher mortgage rates. In another unusual reversal, the mortgage market has been more volatile than the Treasury market, and wide swings in mortgage rates have become a daily occurrence. This past 30 day window could be the most volatile period of daily pricing movements the mortgage markets have ever experienced.

On the economic front, the highly anticipated Employment report failed to meet even Wall Street’s reduced forecast. Against expectations for a gain of 25K new jobs, the economy lost -63K jobs in February, and the figures for January and December were revised lower as well. This marked the largest monthly decline since March 2003. The Unemployment Rate surprisingly fell to 4.8%, but that reflects a large number of people who stopped looking for a job last month, meaning that they officially left the labor pool. Once again, the manufacturing and construction sectors showed the greatest weakness. Until November, the service sector had been steadily producing job gains of 100K or more per month, but even that sector barely produced any new jobs in February.

Big news came out from the Department of Housing and Urban Development (HUD). In accordance with the new legislation passed a couple of weeks ago, HUD released the new loan limits for FHA, Fannie Mae, and Freddie Mac, and they did it a week earlier than expected. The new minimum for FHA is $271,050 nationally and many Metro Markets received increases. In the Midwest, Minneapolis/St.Paul Metro area FHA limit was raised to $365,000 and the Chicago Metro area FHA limit increased to $410,000. The Fannie/Freddie minimum remained unchanged at $417,000 throughout the Midwest.. The formula is based on 125% of each region’s median price within the posted limits. As a practical matter, it will still take some time for Fannie Mae, Freddie Mac, and FHA to prepare their systems and implement the changes.

Effective today the new maximum FHA loan limit for Olmsted county has increased to $271,050.  FHA allows a little more flexibility for borrowers with less then perfect credit or down-payment money that is being gifted to them. This is also  good news for sellers up to this loan limit as the pool of buyers of perspective buyers has opened somewhat.

Chicago, IL - We are happy to announce that Shawn Buryska has successfully completed the course requirements and has earned the designation ABR on March 4th 2008. The Accredited Buyer Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted designation is awarded to real estate practitioners by the Real Estate BUYER’S AGENT Council (REBAC) of the National Association of REALTORS® who meet the specified educational and practical experience criteria.

My theory throughout my career has been if you can freely offer people solid and helpful advice you’ll stand apart from crowd.

When the internet started to be used by the masses, I saw it as the perfect venue to offer buyers and sellers a resource where they could get their various real estate questions answered. I wanted to make sure my website was a comprehensive compilation of information for both buyers and sellers. I’m happy to announce the latest version of ShawnBuryska.com. There’s a new look, but more importantly, there’s even more information for buyers and sellers then ever before! Here’s a quick tour.

Search Area Homes For Sale has an all new interface and a much more powerful database engine allowing home buyers to highly customize, save and view their searches. There’s an all new auto-notification feature of new listings as well, plus the ability to save your favorites and track any status or price changes.

My Listings For Sale has been revised to allow search engines such as Google to more easily pick up those pages, making those listings easier to find and more visible on the web. The buyers have an easier time finding what they are looking for and my sellers have additional exposure on their homes.

Current Interest Rates is a new feature and updated daily with the latest interest rates from Burnet Home Loans.

Real Estate Calculators has been updated so now you can calculate your Olmsted County real estate taxes based on the county’s assessed value. You can also see how much mortgage lenders are willing to lend you based on your income and debt. How fast can you pay your house off by making extra payments? That’s in there as well!

The Buying/Selling a Home sections have been rewritten to better assist and help buyers and sellers understand the process of buying or selling a home.

Real Estate Articles is an archive of my past articles that have been featured in my newsletters and posted nationally on sites such as Realty Times. How did I do in the words for my most recent clients?

See the all new Testimonials section for unedited comments from my buyers and sellers.

For those who are interested in trends and local real estate statistics the Real Estate Statistics section will answer all your questions and more!

 Check out the new site and tell a friend. I hope you will find it informative and helpful.