Home sales hot streak continues into spring heat

I haven't given an update on the market recently so I thought I would share with you some great information that came out from the Minneapolis Area Association of REALTORS:

Minneapolis, Minnesota (May 12, 2009) – April home sales in the Twin Cities were even stronger than March's upswing, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

There were 5,211 pending sales in April, up 23.8 percent from last April. This is the highest showing of signed purchase agreements in April since 2005 and the tenth consecutive month of year-over-year increases.

"Low rates and excellent affordability are what this is all about," said Steve Havig, MAAR President. "Buyers can see for themselves that opportunities are available and the time for action is now."

Of the month's pending sales, 46.0 percent were lender-mediated foreclosures and short sales—down from the last few months as more traditional properties are sold during the spring selling season but up from last year at this time.

The supply of homes for sale continues to experience sluggish growth this spring. There are currently 26,410 homes for sale in the Twin Cities, up 416 units from last month and down 18.4 percent from this time last year. The number of houses for sale for each buyer, as measured by our Supply-Demand Ratio, sits at 5.23 for May—down 28.6 percent from this time last year.

The median sales price for all properties in April of $153,000 is down 25.2 percent from a year ago. While this figure is mathematically correct, it is conceptually flawed. Since a higher share of sales this April were lender-mediated than last April, the number is skewed downward. The median April sales price of traditional homes was $205,000, down 8.5 percent from a year ago. Lender-mediated homes posted an April figure of $120,000, down 21.5 percent from a year ago.

"The overall median price in this market is misleading," said MAAR President-Elect, Brad Fisher. "The traditional and lender-mediated markets don't exist in separate vacuums, but they do include very different kinds of sellers and buyers. It is important to note the distinction."

Have a great Memorial Day Weekend!

Contract for Deed: Good for Buyer and Seller!

I attended a contract for deed continuing education class today which made me realize what a great blog topic CD's would be.

You may be asking what a contract for deed is exactly? In short, a contract for deed is a type of seller financing. Buyer and seller would agree on a sale price and would negotiate the rest of the financing terms including the down payment, interest rate, term, etc. The seller would then accept payments directly from the buyer over the course of the agreed upon term in lieu of receiving the entire sale price at closing.

So when would a contract for deed be a good option?

Although interest rates are phenomenal right now and there are great financing options available, there are some situations where a buyer does not qualify for traditional financing. Maybe the buyer has no credit or they had a few bumps in the road but have since shored them up. The buyer could have plenty of cash flow or reserves to purchase a home now but do not start their new job until a later date and because of that do not qualify for a loan right now.

Sellers have a great opportunity to open up their home to an entire new pool of buyers who may not be able to qualify to purchase a home otherwise. A seller may not have plans for the proceeds of the sale of their home and by offering a CD they may see the return on their investment dollars as a far superior one to other investment options they may have for their money. A contract for deed can also provide a seller with monthly income or cash flow while they hold the contract.

A contract for deed can be a creative way to get a buyer and seller who might otherwise not meet get together to form a relationship that might just be made in real estate heaven!

If you have questions on whether a contract for deed may be right for your situation, give me a call or shoot me an email.

Have a great week!

Mortgage Rates May Be Near the Bottom

Interest rates hit an unprecedented low over the past week or so. Rates for a 30 year fixed rate mortgage were hovering right around 4.75%. Unbelievable! So if you are thinking about refinancing or buying a new home and are planning on holding out a little longer until rates get down to the low 4's, you might want to rethink that strategy.

I recently red an article in The Wall Street Journal (www.wsj.com) entitled "Under 5%, Mortgages May Be Near The Bottom." The article referenced projections for the coming year of rates anywhere from 4.5% to 5.5%.

What was the reasoning for the projections? An increase in refinance applications has backlogged mortgage lenders forcing them to keep workers on overtime. If lender costs are increasing, the chances for them lowering rates and competing on price is not very good. A decrease in the number of mortgage companies may also cause a further decrease in competition which in turn will naturally cause rates to move a bit higher.

Perhaps the most exciting part of the article referenced the fact that these fantastic rates will most likely cause the prices of homes to hit bottom this year if they haven't already done so.

We have really seen sales in our market pick up over the last two months and I think the combination of great rates, low prices, and a good inventory are to blame! Whether refinancing or buying, you may want to get out there and take advantage of these great rates sooner than later.

I am going to take a day off tomorrow to rest and relax in preparation of busy times ahead! I am off to the MN Boys Basketball Tourney with my Dad tomorrow! Have a great weekend!

Foreclosure Search Now Available at NewmanSellsHomes.com!

Should I be including foreclosure properties in my home search? Are foreclosure properties really a good deal? Does it make sense to invest in a foreclosure property right now?

These are all very good questions and I have been hearing them all a lot lately. While I am not excited that there are several foreclosure and lender mediated properties on the market right now, I am pleased to announce that we have added a specialized Foreclosure Search to the Home Search at NewmanSellsHomes.com.

To access the various search features, click on Home Search at NewmanSellsHomes.com and you can choose any of the tabs that run across the top to search for Active Listings, Open Houses, or Foreclosures.

If you don't like searching from the map, you can also select to search using County/City, Address/Zip, School District, or Body of Water by selecting the appropriate Search Type under the search tabs.

Another hot tip if you are using the map search is that you can change the type of map you are using. By simply clicking the the links in the upper right hand corner of the map you can switch between a Street, Hybrid, or Aerial view. The Street view looks like a street map, the Hybrid is a combination of a street map and a satellite view, and the Aerial view is a satellite view which allows you to see actual neighborhood views of the homes you are searching.

So how about the answers to the questions above? Well, those can be complicated. It really depends on your individual situation and what goals you are trying to accomplish. If you are interested in potentially purchasing a foreclosure property give me a call and I will be happy to help you make the determination if a foreclosure property may be right for you.

$7500 Tax Credit

If you are a first time home buyer or have not owned a home over the past 3 years you may want to take advantage of the $7500 tax credit that is currently available.

There is new legislation in the works that may turn the current $7500 tax credit (which is essentially a 15 year interest free loan) into a full blown grant that would not have to be repaid.

I have attached 4 links below to some great information on the new legislation as well as the current tax credit.

Send me an email or give me a call anytime if you are looking for more information.

Star Tribune Article

CNN Article

IRS Info

The National Association of Home Builders has a well done site that thoroughly explains the tax credit.

Happy Halloween?

A couple of the agents in my office forwarded this photo onto me which I thought was worth talking about!

The caption in the email below the photo said, "Halloween is going to Suck this Year!"My initial reaction was to chuckle but I also realized with the economic times we are living in there is some seriousness to the intended humor.

So how do foreclosures factor into the market? Each area is a bit different giving some true meaning to the phrase, "Every real estate market is local." In most neighborhoods the photo above does not even come close to representing a common street view. That being said, unfortunately there are some pockets within neighborhoods that are vaguely reminiscent. So do we have a foreclosure problem that is running rampant? No, I do not believe we do. Will we see some more foreclosures over the next year or so due to not only the economy but also questionable and illegal lending practices that have occurred in the recent past? Yes, I believe we will.

These are some interesting and some would even say "scary" (I thought you might like that Halloween reference) times we are living in. On the other hand, there have been some very positive indications lately that the housing market is headed in the right direction and many believe that a re-energized housing market will lead our country out of an economic slump. I was talking with several of the agents in my office the other day and one of them who has been in the business for 30+ years summed up the market like this:

"These have been some of the most unique and challenging times I have ever seen in this industry but at the same time none of us will probably ever see a better time for buyers. Usually if we see low prices we see high interest rates or vice versa. Right now we are seeing a fantastic inventory of homes, great prices, and great rates all at the same time. Investors, first time homebuyers, and move-up buyers should all be taking a careful look at the opportunities in this market."

I couldn't have said it any better myself. What a great time to be a buyer or even a seller who has lived in your home for a while and is looking to improve your quality of life. And as far as mortgage money goes, there are ample programs available to buyers right now.

So how will this trick or treating season turn out? Fortunately I saw a news cast last night talking about a very active Halloween shopping season. Despite a few vacant homes, it sounds like those ghosts and goblins will have a very scary Halloween after all!

What is happening in that crazy real estate market of ours?

I have recently had several people ask me about this crazy real estate market we are experiencing. Is it a good time to buy? Is it a good time to sell? What is happening out there?

Unfortunately the answer is not a simple one but hopefully with help from the Minneapolis Area Association of Realtors (MAAR), I can give it a little more clarity. I have attached a link to September's "The Skinny" brought to you by MAAR. Take a few minutes to watch this video clip as I think it provides a lot of clarity to what we are facing.

In short, inventory is decreasing (good for sellers), buyer demand is increasing (also good for sellers), however prices seem to still be decreasing slightly (good for buyers). Talk about something hard to get a handle on!

The biggest factor in all of this appears to be lender mediated properties (foreclosures and short sales) which I can explain a little more in depth in a different posting. Even though demand is up and inventory is slowly decreasing, lender mediated properties are causing prices across the market to decline slightly. You will see in the video that median sale prices of lender mediated properties went down in August by 9.6% while owner occupied home prices only declined by about 4.3%.

So what is the answer? It is a good time to buy or sell? Buyers still have a fantastic inventory to choose from, interest rates have recently declined to under 6%, and as long as homes are priced well and properly staged, homes are selling allowing sellers to move on to make a great buy of their own!

Take a minute to watch "The Skinny". I would love to have your feedback and questions. Call or email me anytime!

Are we in a real estate crisis?

Well I am finally back blogging! I would like to apologize to my many loyal blog readers who have had to wait for a new blog entry. (Okay, that was supposed to be a bit sarcastic!) In all seriousness, I haven’t had time to write an entry because the last few weeks have been pretty darn busy in the real estate world! That is some very positive news compared to the constant negativity we hear from the media in regards to foreclosures and the real estate “crisis” we are supposedly in.

Because of the increase in activity I thought I would keep this entry fairly short and share with you a link to a fantastic commentary on the market that puts foreclosures and our current market into perspective. This two minute video simplifies what is happening nationwide and sheds a pretty positive light on our current situation.

Now there is no doubt the economy doesn’t feel great right now and we are definitely in the middle of a real estate correction but buyers are realizing that combined with great inventory, a decrease in prices, and some of the lowest historical interest rates, the time to buy is now! Sellers are also taking advantage of some very nice opportunities to move-up and realize that even if they have to reduce their price they are gaining more on their purchase then they are “losing” on their sale. And as you will see in the video, if you purchased your current home before the year 2000, on a national basis you would still have gained 34% on your investment if you were selling today. Not bad if I do say so myself.

Enjoy the video from CNBC and have a positively great day!

http://www.cnbc.com/id/15840232?video=780461999

What Does A Realtor Do?

I was driving down the road a few months ago with some clients of mine. We were heading to look at homes that they were potentially interested in purchasing. Mr. Buyer looked at me and said, “so if I have access to all of the homes that are for sale on the internet, what exactly do you do for me?” He and Mrs. Buyer had hired me to help them sell their current home and purchase their new home so he was joking of course but it did make me realize that there are probably some misconceptions and questions as to what I do exactly.

There are two main areas of my business. These include helping buyers purchase a new home and helping sellers sell their existing homes. These are two totally different realms with very different job descriptions so I have decided to talk about helping buyers in this entry and I will write about helping sellers at a later date.

Watching a buyer’s face light up when they walk in the door and fall in love with a home that I am showing them is one of the most rewarding parts of my job. Having the knowledge and ability to transfer that excitement into a successful purchase and enjoyable experience is the reason I have a job.

The client who I mentioned above was absolutely correct, there is little value in my house “finding” services for a buyer who is tech savvy and does a lot of internet searching. For example, all listings in Minnesota and Western Wisconsin that are listed on the Multiple Listing Service can be found by visiting the Home Search section at NewmanSellsHomes.com. You can even set-up a customized search that will alert you whenever there is a new listing that comes on the market.

There is a way that I can bring value to you during the house hunting process. Once you have determined where you would like to live, I am able to network with over 3000 agents within my company alone as well as several other agents with whom I have built a working network to find out about new listings before they even come on the market.

So with the exception of my ability to find out about pre-listings, if you are able to find homes on your own on the internet why should you hire me? I personally believe that a Realtor brings more value to the real estate transaction now more than ever. Transactions have become increasingly more complicated with longer purchase agreements and more and more litigation. I can help you through the twists and turns and hopefully avoid any issues in the future.

As I am looking at homes with my buyers, I can help give opinions on how homes compare to one another. I can point out positives and negatives for resale and can help determine the correct offer price. Once my buyers have located the home they would like to put an offer on, I always provide them with recent comparable sales to help them determine a price they are comfortable paying.

My experience with negotiating has become a key point of value for my clients. I am able to sort out the important points of the offer and take out the emotional aspects to help get the best price possible for my clients.

I personally believe one of the most important jobs I hold is making the entire transaction a walk in the park for my clients. I will explain the entire process from start to finish and make sure every piece of the puzzle is in place. This will ensure that there will be no questions, problems, or hiccups through closing and beyond.

There are so many other aspects that I help work with on a daily basis such as explaining earnest money, financing options, financing addendums and dates, inspections, tax proration, and much more.

For the person who is on the internet and has their home search under control you can see that finding homes may not be my biggest asset but rather the knowledge and experience I bring to the entire transaction may be the best reason to contact me when thinking about making a move!