MinnEcon: November 11, 2009 Archive

Are minority homeowners faring better than we think?

Posted at 1:00 PM on November 11, 2009 by Paul Tosto (0 Comments)
Filed under: Housing & mortgages

There's no doubt many Minnesota homeowners of color have been battered in this recession. The foreclosure crisis has crippled many neighborhoods. We were riveted by the emotional eviction of Rosemary Williams from her Minneapolis home.

But amid the pain is there something positive happening we haven't seen? I started wondering about that after seeing some data showing minority home ownership rates holding surprisingly steady during 2008.

Click on the graph below to see the rates of ownership since 2000. The numbers were part of a presentation this week by Michael Grover, of the Minneapolis Fed as part of the Minnesota Home Ownership Center's Annual Emerging Markets Summit.

"Emerging markets" is a collective description for people of color. We asked Grover what he thought:

I think the biggest take away for me, especially for the Census data for 2008, was that there was no decline in the total number of or ownership rate for emerging market homeowners between 2007 and 2008 -- given the housing market we currently are in, the recent performance of mortgages, and the fact that the rate for Whites (who are not Hispanic or Latino) went down by .8%.

What's going on? Is it possible that people of color who are buying homes are offsetting many of the home losses we're seeing in the foreclosure data, so that the home ownership rates are staying relatively stable?

Grover says he hasn't had time to analyze the data enough to draw conclusions. He plans to examine it deeper.

It definitely needs more exploration. It's the seed of something interesting.

I was especially intrigued by the growth in ownership rates since 2000 among Asian and Latino people.

Of course, there's plenty of other data to show things are not good and the gap between white and minority ownership is among the highest of any state in the country. And Minnesota is nowhere near the end of the mortgage crisis. Still, it's worth keeping an eye on who's doing the home buying this year and next.

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What's your take on the housing market right now? Post below or contact me directly.

Click on the map icons below to read what Minnesotans in MPR's Public Insight Network have been telling us about the housing climate around them. Then share your story.

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Update on the short sale mess

Posted at 6:00 PM on November 11, 2009 by Paul Tosto (0 Comments)
Filed under: Housing & mortgages, Twin Cities metro

We posted recently that while the Twin Cities housing climate was improving, the market wouldn't really recover until the short sale problem gets worked out.

New detailed reporting released today on short sales by the Minneapolis Area Association of Realtors shows there's still a long way to go.

In short sales, the homeowner owes more on the house than he'll get from the sale. The bank, which likely ends up losing money on the deal, must sign off on the sale. That creates a tough situation with banks wanting to protect their financial interests and Realtors, sellers and potential buyers frustrated by an approval process that can drag on for months.

It's a drag on the rest of the business and on home prices generally. The Minneapolis Realtors report today showed a stubbornly high inventory of short sale homes -- about 4,300 in the Twin Cities, only about five percent less than October last year and still way up from 2007.

New listings of short sale homes in October were almost exact to October 2008.

On the positive side, lender owned homes in foreclosure are still selling at a good clip with less than a month and a half of inventory. Compare that though to short sales, where there's a 13 months supply, according to the most recent data.

Markets recover. But it's going to take more than an invisible hand to fix the short sale mess, which right now could be with us until 2011.

BONUS INFO: Here's the MPR story from today on the Realtors' overall market analysis.

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Got a perspective to share on short sales and the housing market in the Twin Cities or across Minnesota? Post below or contact me directly.

Click on the map icons below to read what sources in MPR's Public Insight Network have told us about housing and mortgage issues around them. Take a look, then share your story.

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