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        <title>Real Estate Blog</title>
        <link>http://www.minneapolisurbanhomes.com/blog/2023-09/</link>
        <description></description>
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    <guid>https://www.minneapolisurbanhomes.com/blog/explaining-todays-low-housing-supply.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/explaining-todays-low-housing-supply.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Explaining Today’s Low Housing Supply</title>
    <description> <![CDATA[ 



 





Some Highlights




Wondering why the supply of homes for sale is limited today? There are a few factors at play.


Lack of building over time, the mortgage rate lock-in effect, and people staying in their houses longer are three of the main reasons why supply is low.


But real estate agents know exactly where to look and what to do to make your dream a reality. Let’s connect so you have an expert on your side to help you successfully navigate the market and find your next home. 


 ]]> </description>
    <pubDate>Fri, 29 Sep 2023 10:28:00 -0500</pubDate>
</item>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/why-your-house-didnt-sell.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/why-your-house-didnt-sell.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Why Your House Didn’t Sell</title>
    <description> <![CDATA[ 



 


If your listing expired and your house didn’t sell, you’re likely feeling a little frustrated. Not to mention, you're also probably wondering what went wrong. Here are three questions to think about as you figure out what to do next.


Did You Limit Access to Your House?


One of the biggest mistakes you can make when selling your house is restricting the days and times when potential buyers can tour it. Being flexible with your schedule is important when you're selling your house, even though it might feel a bit stressful to drop everything and leave when buyers want to see it. After all, minimal access means minimal exposure to buyers. ShowingTime advises:


“. . . do your best to be as flexible as possible when granting access to your house for showings.”


Sometimes, the most determined buyers might come from far away. Since they're traveling to see your house, they may not be able to change their plans easily if you only offer limited times for showings. So, try to make your house available as much as you can to accommodate them. It’s simple. If no one’s able to look at it, how’s it going to sell?


Did You Make Your House Stand Out?


When selling your house, the old saying matters: you never get a second chance to make a first impression. Putting in the work to make the exterior of your home look nice is just as important as how you stage it inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from U.S. News says:


“After all, if people drive by, but aren’t interested enough to walk through the front door, you’ll never sell your house.”


But don’t let that impact stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.


Did You Price Your House Compellingly?


Setting the right price is extremely important when you're selling your house. Even though it might feel tempting to push the price higher to maximize your profit, overpricing can scare away buyers and make it hard to sell quickly. Business Insider notes:


“. . . the biggest mistake sellers make is overpricing their home.”


If your house is priced higher than others like it, it could make buyers lose interest. Pay attention to the feedback people give your agent during open houses and showings. If lots of people are saying the same thing, it might be a good idea to think about lowering the price.


For all these insights and more, rely on a trusted real estate agent. A great agent will offer expert advice on relisting your house with effective strategies to get it sold.


Bottom Line


It’s natural to feel disappointed when your listing has expired and your house didn’t sell. Let’s connect to figure out what happened and what to reconsider or change if you want to get your house back on the market.
 ]]> </description>
    <pubDate>Thu, 28 Sep 2023 14:27:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Why Today’s Housing Inventory Shows a Crash Isn’t on the Horizon</title>
    <description> <![CDATA[ 



 


You might remember the housing crash in 2008, even if you didn't own a home at the time. If you’re worried there’s going to be a repeat of what happened back then, there's good news – the housing market now is different from 2008.


One important reason is there aren't enough homes for sale. That means there’s an undersupply, not an oversupply like the last time. For the market to crash, there would have to be too many houses for sale, but the data doesn't show that happening.


Housing supply comes from three main sources:




Homeowners deciding to sell their houses


Newly built homes


Distressed properties (foreclosures or short sales)




Here’s a closer look at today's housing inventory to understand why this isn’t like 2008.


Homeowners Deciding To Sell Their Houses


Although housing supply did grow compared to last year, it’s still low. The current months’ supply is below the norm. The graph below shows this more clearly. If you look at the latest data (shown in green), compared to 2008 (shown in red), there’s only about a third of that available inventory today.


So, what does this mean? There just aren't enough homes available to make home values drop. To have a repeat of 2008, there’d need to be a lot more people selling their houses with very few buyers, and that's not happening right now.


Newly Built Homes


People are also talking a lot about what's going on with newly built houses these days, and that might make you wonder if homebuilders are overdoing it. The graph below shows the number of new houses built over the last 52 years:


The 14 years of underbuilding (shown in red) is a big part of the reason why inventory is so low today. Basically, builders haven’t been building enough homes for years now and that’s created a significant deficit in supply.


While the final blue bar on the graph shows that’s ramping up and is on pace to hit the long-term average again, it won’t suddenly create an oversupply. That’s because there’s too much of a gap to make up. Plus, builders are being intentional about not overbuilding homes like they did during the bubble.


Distressed Properties (Foreclosures and Short Sales)


The last place inventory can come from is distressed properties, including short sales and foreclosures. Back during the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to get a home loan they couldn’t truly afford.


Today, lending standards are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses data from the Federal Reserve to show how things have changed since the housing crash:


This graph illustrates, as lending standards got tighter and buyers were more qualified, the number of foreclosures started to go down. And in 2020 and 2021, the combination of a moratorium on foreclosures and the forbearance program helped prevent a repeat of the wave of foreclosures we saw back around 2008.


The forbearance program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And data on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market.


What This Means for You


Inventory levels aren’t anywhere near where they’d need to be for prices to drop significantly and the housing market to crash. According to Bankrate, that isn’t going to change anytime soon, especially considering buyer demand is still strong:


“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”


Bottom Line


The market doesn’t have enough available homes for a repeat of the 2008 housing crisis – and there’s nothing that suggests that will change anytime soon. That’s why housing inventory tells us there’s no crash on the horizon.
 ]]> </description>
    <pubDate>Wed, 27 Sep 2023 08:15:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/the-return-of-normal-seasonality-for-home-price-appreciation.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/the-return-of-normal-seasonality-for-home-price-appreciation.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>The Return of Normal Seasonality for Home Price Appreciation</title>
    <description> <![CDATA[ 



 


If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.


In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.


That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):





As the data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.


After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:


“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”


Why This Is So Important to Understand


In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:




Appreciation: when prices increase.


Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.


Depreciation: when prices decrease.




Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 


Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.


Bottom Line


While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in our local area, let’s connect.
 ]]> </description>
    <pubDate>Tue, 26 Sep 2023 17:20:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/the-many-non-financial-benefits-of-homeownership.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/the-many-non-financial-benefits-of-homeownership.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>The Many Non-Financial Benefits of Homeownership</title>
    <description> <![CDATA[ 



 


Buying and owning your own home can have a big impact on your life. While there are financial reasons to become a homeowner, it's essential to think about the non-financial benefits that make a home more than just a place to live.


Here are some of the top non-financial reasons to buy a home.


According to Fannie Mae, 94 of survey respondents say “Having Control Over What You Do with Your Living Space” is a top reason to own.


Your home is truly your own space. If you own a home, unless there are specific homeowner association requirements, you can decorate and change it the way you like. That means you can make small changes or even do big renovations to make your home perfect for you. Your home is uniquely yours and by buying, you give yourself the freedom to tailor it to your individual style. Investopedia explains:


“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.”


When you rent, you might not be able to make your place really feel like it’s yours. And if you do make any modifications, you might have to change them back before you leave. But if you own your home, you can make it just the way you want it. That level of customization can give you a sense of pride in where you live and make you feel more connected to it.


Fannie Mae also finds 90 say “Having a Good Place for Your Family To Raise Your Children” tops their list of why it’s better to buy a home.


Another important factor to think about is what stage of life you’re in. U.S. News breaks it down:


“For those with young children, buying a home and putting down roots is a major driver. . . . You don’t want the upheaval of a massive rent increase or a non-renewed lease to impact your sense of stability.”


No matter which of life’s milestones you’re in, stability and predictability are important. That’s because the one constant in life is that things will change. And, as life changes around you, having a familiar home and not worrying about moving regularly helps you and those who matter most feel more secure and more comfortable.


Lastly, Fannie Mae says 82 list “Feeling Engaged in Your Community” as another key motivator to own.


Owning your home also helps you feel even more connected to your neighborhood. People who own homes usually live in them for an average of nine years, according to the National Association of Realtors (NAR). As that time passes, it’s natural to make friends and build strong ties in the community. As Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), points out:


“Homeowners also tend to be more active in their local communities . . .”


When you care deeply about the people you live near, you’ll do what you can to contribute to your local area.


Bottom Line


Owning your home can make your life better by giving you a sense of accomplishment, pride, stability, and connectedness. If you're thinking about becoming a homeowner and want to learn more, let’s connect.
 ]]> </description>
    <pubDate>Thu, 21 Sep 2023 10:28:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/why-is-housing-inventory-so-low.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/why-is-housing-inventory-so-low.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Why Is Housing Inventory So Low?</title>
    <description> <![CDATA[ 



 


One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.


There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.


Underbuilding Is a Long-Standing Problem


One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:


For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight. 


Today’s Mortgage Rates Create a Lock-In Effect


There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps illustrate just how many homeowners may find themselves in this situation:


Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.


Misinformation in the Media Is Creating Unnecessary Fear


Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:


“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”


That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction. 


How This Impacts You


If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.




For buyers: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.


For sellers: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home. 




Bottom Line


The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, let’s connect. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in our area.
 ]]> </description>
    <pubDate>Thu, 14 Sep 2023 09:07:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/should-baby-boomers-buy-or-rent-after-selling-their-houses.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/should-baby-boomers-buy-or-rent-after-selling-their-houses.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Should Baby Boomers Buy or Rent After Selling Their Houses?</title>
    <description> <![CDATA[ 



 


Are you a baby boomer who’s lived in your current house for a long time and you’re ready for a change? If you’re thinking about selling your house, you have a lot to consider. Will you move to a different state or stay nearby? Is it time to downsize or do you want more space to accommodate your loved ones? But maybe the biggest consideration boils down to this – will you buy your next home or choose to rent instead?


That decision ultimately depends on your current situation and your future plans. Here are two important factors to help you decide what’s right for you.


Expect Rents to Keep Going Up


The graph below uses data from the Census to show how rents have been climbing steadily since 1988:Rents have been going up consistently over the long run. If you choose to rent, there’s a risk your rental payment will go up each time you renew your lease. Having a higher rental expense may not be something you want to deal with every year.


When you buy a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment. This allows you to lock in your monthly payment for the duration of your home loan. That keeps your payments steady and predictable for the long haul. Freddie Mac sums it up like this:


“. . . homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won’t change much in the long term, even when life’s other costs do.”


Owning Your Home Comes with Unique Benefits


According to AARP, buying your next home is a better long-term strategy than renting:


“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”


To help you choose what you’ll do after you sell, here are just a few of the benefits of homeownership that article covers:




Owning your home can help you save money for the future. Your home, and the equity you build as a homeowner, can provide generational wealth that could be passed on to loved ones, giving them a better life.


You might not have to pay a monthly mortgage payment at all. If you have enough equity to buy your next home outright, you wouldn’t have a monthly mortgage payment. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment could be a big relief.


Aging in place can be simpler. If your needs change, owning your home gives you the freedom to make renovations and updates that can make everyday life easier.




Bottom Line


If you're a baby boomer who’s wondering whether you should buy or rent your next home, let’s connect. With rents going up and homeownership providing so many benefits, it may make sense to consider buying your next home.
 ]]> </description>
    <pubDate>Wed, 13 Sep 2023 09:30:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/what-experts-project-for-home-prices-over-the-next-5-years.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/what-experts-project-for-home-prices-over-the-next-5-years.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>What Experts Project for Home Prices Over the Next 5 Years</title>
    <description> <![CDATA[ 



 


If you're planning to buy a home, one thing to consider is what experts project home prices will do in the future and how that might affect your investment. While you may have seen negative news over the past year about home prices, they’re doing far better than expected and are rising across the country. And data shows, experts forecast home prices will keep appreciating.


Experts Project Ongoing Appreciation


Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in the latest quarterly Home Price Expectation Survey (HPES). The results show what the panelists project will happen with home prices over the next five years. Here are those expert forecasts saying home prices will go up every year through 2027 (see graph below):If you’re someone who was worried home prices would fall because of stories you’ve read online, here's the big takeaway. Even though home prices vary by local market, experts project prices will continue to rise across the country for years to come. And these numbers indicate the return to more normal home price appreciation.


And while the projected increase in 2024 isn’t as large as 2023, it’s important to recognize home price appreciation is cumulative. In other words, if these experts are correct, after your home’s value rises by 3.32 this year, it’ll appreciate by another 2.17 next year. This is a good example of why owning a home is a choice that wins big over time.


What Does This Mean for You?


Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. To see how a typical home's value could change in the next few years using the expert projections from the HPES, check out the graph below:In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.


So, if you're thinking about whether buying a home is a good choice, remember how it can be a powerful way to grow your wealth in the long run. 


Bottom Line


According to the experts, home prices are expected to grow over the next five years at a more normal pace. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) grow. Let’s connect to start the homebuying process today.
 ]]> </description>
    <pubDate>Tue, 12 Sep 2023 11:32:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/expert-home-price-forecasts-revised-up-for-2023.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/expert-home-price-forecasts-revised-up-for-2023.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Expert Home Price Forecasts Revised Up for 2023</title>
    <description> <![CDATA[ 



 


Toward the end of last year, there were a number of headlines saying home prices were going to fall substantially in 2023. That led to a lot of fear and questions about whether there was going to be a repeat of the housing crash that happened back in 2008. But the headlines got it wrong.


While there was a slight home price correction after the sky-high price appreciation during the ‘unicorn’ years, nationally, home prices didn’t come crashing down. If anything, prices were a lot more resilient than many people expected.


Let's take a look at some of the expert forecasts from late last year stacked against their most recent forecasts to show that even the experts recognize they were overly pessimistic.


Expert Home Price Forecasts: Then and Now


This visual shows the 2023 home price forecasts from seven organizations. It provides the original 2023 forecasts (released in late 2022) for what would happen to home prices by the end of this year and their most recently revised 2023 forecasts (see chart below):


As the red in the middle column shows, in all instances, their original forecast called for home prices to fall. But, if you look at the right column, you’ll see all experts have updated their projections for the year-end to show they expect prices to either be flat or have positive growth. That’s a significant change from the original negative numbers.


There are a number of reasons why home prices are so resilient to falling. As Odeta Kushi, Deputy Chief Economist at First American, says:


“One thing is for sure, having long-term, fixed-rate debt in the U.S. protects homeowners from payment shock, acts as an inflation hedge - your primary household expense doesn't change when inflation rises - and is a reason why home prices in the U.S. are downside sticky.”


A Look Forward To Get Ahead of the Next Headlines


For home prices, you’re going to continue to see misleading media coverage in the months ahead. That’s because there’s seasonality to home price appreciation and they’re going to misunderstand that. Here’s what you need to know to get ahead of the next round of negative headlines.


As activity in the housing market slows at the end of this year (as it typically does each year), home price growth will slow too. But, this doesn’t mean prices are falling – it’s just that they’re not increasing as quickly as they were when the market was in the peak homebuying season.


Basically, deceleration of appreciation is not the same thing as home prices depreciating.


Bottom Line


The headlines have an impact, even if they’re not true. While the media said home prices would fall significantly in their coverage at the end of last year, that didn’t happen. Let’s connect so you have a trusted resource to help you separate fact from fiction with reliable data.
 ]]> </description>
    <pubDate>Tue, 05 Sep 2023 10:15:00 -0500</pubDate>
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