Real Estate Blog

Jim Buchta, StarTribune 10/14/15

There were more buyers than sellers in many parts of the Twin Cities last month, boosting prices and closings in what’s been the best fall market in a decade.

During September, there were 5,114 home sales with a median sale price of $222,000 in the 13-county metro area, according to data released Tuesday by the Minneapolis Area Association of Realtors. That was a 12 percent increase in sales and a 8.3 percent increase in prices compared with last September.

The market was strong all through the spring and summer and near-perfect weather for house shopping kept it that way as fall arrived.

“The warm season and good rates continue to keep the market active,” said Kevin Sharkey, president/owner of Better Homes and

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Keeping Current Matters, 8/26/15

Some experts are advising that first time and move-up buyers wait until they save up 20% before they move forward with their decision to purchase a home. One of the main reasons they suggest waiting is that a buyer must purchase private mortgage insurance if they have less than the 20%. That increases the monthly payment the buyer will be responsible for.

In a recent article, Freddie Mac explained what this would mean for a $200,000 house:

However, we must look at other aspects of the purchase to see if it truly makes sense to wait.

Are you actually saving money by waiting?

CoreLogic has recently projected that home values will increase by 4.3% over the next 12 months. Let’s compare the extra cost of PMI

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Keeping Current Matters, 9/29/15

As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first-time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let us explain.

There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen over the next 12 months?

According to CoreLogic’s latest Home Price Index, prices are expected to rise by 4.7% by this

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Keeping Current Matters, 9/16/15

The National Association of Realtors (NAR) recently released their July edition of the Housing Affordability Index. The index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data. NAR looks at the monthly mortgage payment (principal & interest) which is determined by the median sales price and mortgage interest rate at the time. With that information, NAR calculates the income necessary for a family to qualify for that mortgage amount (based on a 25% qualifying ratio for monthly housing expense to gross monthly income and a 20% down payment).

Here is a graph of the income needed to buy a

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Jim Buchta, Star Tribune, 091515

For Twin Cities home buyers, the waning days of summer are typically a time for browsing. Not this time around. With house listings in short supply, sellers are in the driver’s seat and buyers are on edge.

“It was much tougher than we expected,” said Mike Takalo, who, with his wife, last month closed on a house that was the seventh one they offered to buy since February. Among the six rejections was one in which they offered more than $30,000 over the listed price. “The emotional roller coaster was hard to handle,” he added.

The imbalance between buyers and sellers grew in the metro area last month, new data showed Monday.

Home sales increased 7.8 percent, but new listings were flat, causing the total number of

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Keeping Current Matters, 9/10/15

If you are debating purchasing a home right now, you are surely getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home.

There are 3 questions you should ask before purchasing in today’s market:

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. A study by the Joint Center for Housing Studies at Harvard University

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Keeping Current Matters, 9/9/15

There is no doubt that home prices in the vast majority of housing markets across the country are continuing to increase on a month over month basis. The following map (based on data from the latest CoreLogic pricing report) reveals the appreciation level by state:

http://www.keepingcurrentmatters.com/wp-content/uploads/2015/09/1-month-price-change-KCM.jpg

These increases in value have caused some to be concerned about a new price bubble forming in residential real estate. Here are quotes from many of the most respected voices in the housing industry regarding the issue:

Nick Timiraos, reporter at the Wall Street Journal:

“Predictions of a new national home price bubble look unfounded for now, according to data.”

Michael Fratantoni, Chief Economist, the Mortgage Bankers Association:

“I don’t

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Keeping Current Matters, 8/31/15

The housing market has made a strong recovery, not only in sales and prices, but also in the confidence of consumers and experts as an investment. In a New York Times editorial entitled, “Homeownership and Wealth Creation” they explain:

“Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.”

Many of the points that were made in the article are on track with the research that the Federal Reserve has also conducted in their Survey of Consumer Finances. The study found that the average net

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Keeping Current Matters, 8/19/15

We are almost back to ‘pre-housing crash’ home values. The inventories of distressed properties (foreclosures & short sales) are shrinking dramatically. The economy is improving. The job numbers are headed in the right direction. The big question that still remains: Have Americans regained their confidence in real estate as a worthy investment? According to a survey conducted by Princeton Survey Research Associates, Americans have put real estate back into first place as the best of all investments.

Here are the results of the survey:

http://www.keepingcurrentmatters.com/wp-content/uploads/2015/08/Best-Investment-KCM.jpg

Bottom Line

Homeownership never lost its place as a key component of the American Dream for a host of financial and non-financial reasons. It is good to see that it has

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Keeping Current Matters, 8/18/15

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

  • Home values will appreciate by 4.1% in 2015.
  • The cumulative appreciation will be 18.1% by 2019.
  • That means the average annual appreciation will be 3.4% over the next 5 years.
  • Even the experts making up the most bearish quartile of the survey still are
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