Real Estate Blog

Minneapolis Area Assn of Realtors. 2/12/16

The year got off to a mostly strong start with buyer activity and home prices rising even though seller activity was lackluster.  Pending sales rose 3.5 percent to 3,033 signed contracts; new listings decreased 7.2 percent to 4,167 homes.  In light of that, it’s no surprise that inventory levels fell 22.2 percent to 10,065 active properties—the lowest figure on record since January 2003.

Prices continued along their upward trajectory.  The median sales price rose 10.3 percent from last January, landing at $215,000. But the big news came by way of median list price, which rose 6.1 percent to $259,900, a record high.  The price per square foot rose 7.2 percent to $126.

Buyers wrote offers that were more

Jim Buchta, StarTribune, 2/13/16

The Twin Cities home market continued to percolate in January, though it remained below full boil because of constrained supply.

Buyers in the Twin Cities metro signed 3,033 purchase agreements for homes last month, 3.5 percent more than a year ago, the Minneapolis Area Association of Realtors said Friday.

“This year’s spring market started earlier and stronger than in past years,” said Cotty Lowry, a sales agent with Keller Williams and president-elect of the association.

Closings on deals that were signed late last year rose 17.8 percent, with the median price of those closings rising 10.3 percent to $215,000. Prices reached new highs in several markets, including Edina, St. Louis Park, Plymouth, Hopkins,

Keeping Current Matters, 1/21/16

Fannie Mae recently released their “What do consumers know about the Mortgage Qualification Criteria?” Study. The study revealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home. Here are three takeaways:

• § 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary
• § 86% of Americans either don’t know (59%) or are misinformed (25%) about what an appropriate Back End Debt-to-Income (DTI) ratios is
• § 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required

To help correct these misunderstandings, let’s take a look at the latest Ellie Mae Origination Insight

Jim Buchta, StarTribune 1/20/16

Minneapolis is on the cusp of getting its third major condo project since the recession.

Developer Bob Lux said Tuesday that he will build a 40-story tower with 207 condominiums in the Marcy-Holmes neighborhood just across the river from downtown Minneapolis.

The decision comes after months of speculation about whether Lux would build apartments or condos on the site at 200 Central Av., now the location for a Washburn-McReavy funeral home.

“We recognize that condominium homes are more difficult to construct and that the site would accommodate apartments nicely,” Lux said. “But city leaders and neighborhood groups have helped us recognize that this site presents a great opportunity to respond to the area’s need

Kristen Leigh Painter, StarTribune

With 2015 in the rearview mirror and the first interest rate hike in nine years still fresh, Twin Cities real estate experts say the new year should be another strong one for the local housing market. Home prices are expected to keep rising following a year when the median sale price reached its highest level since before the recession. And a higher volume of sales in the Twin Cities are anticipated, though opinions differ on precise growth.

Such predictions leave sellers wondering whether the time has come to turn a profit on their home, while buyers discern if it will be the year to make an investment. For both, the overarching question is whether the market is nearing another peak.

Most market analysts don’t

Keeping Current Matters, 12/16/15

In a recent study conducted by Builder.com, researchers determined that nationwide it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home. Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save. According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state: 

What if you only needed to save 3%?

What if you were

Keeping Current Matters, 12/14/15

As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about three-quarters of a percentage point over the next twelve months. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment

Some Highlights:

• Interest rates have come a long way in the last 30 years.
• The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford.
• Experts predict that rates will increase by 3/4 a percent over the next 12 months.
• Secure a low rate now to get the most house for your money.

Keeping Current Matters, 12/2/15

Below are quotes from experts as well as industry reports & articles that cover the residential rental market in the U.S.

The experts…

Zillow Chief Economist Svenja Gudell:

"Make no mistake: Despite this recent slowdown in rental appreciation, the rental affordability crisis we've been enduring for the past few years shows no signs of easing, especially as income growth remains weak. It will take a lot more supply, and a lot more renters-turned-homeowners, to fully reverse this.”

Lawrence Yun, Chief Economist of the National Association of Realtors

“Rents and home prices are expected to exceed income growth into next year because of the insufficient creation of new home construction and the

Keeping Current Matters, 11/19/15

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters. This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows. Here is a chart showing the average mortgage interest rate over the last several decades.

Bottom Line

Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or