When you are new to the world of home ownership, you can never ask too many questions. It is very easy to make a mistake. The best way to avoid these pitfalls is educate yourself to them.
1. Commitment to the process. It is typically the largest and most important purchase you will make. Plan carefully, deal with financing and ownership issues and listen to the advice of a professional REALTOR®.
2. Choose a professional. By selecting a REALTOR®, you are choosing a professional who abides by a code ethics and standards of practice and will have your best interests in mind. A REALTOR® will explain the purchase contract, disclosures, and inspection process to you in detail.
3. Know your credit history. Your credit history should be as clean as possible. Fix any problems you discover.
4. Get financing pre-approval. When a home buyer makes an effort to get pre-approved they gain two things 1.) how much home is affordable and 2.) a good negotiating position. There are a variety of financing options available, including programs to assist those challenged by affordability or credit concerns.
5. Be realistic about needs and wants. Make a list of the items that are "needs" and "wants" items and give it to your real estate agent.
6. How to choose the right house. Take notes when touring homes. Record the ‘pros’ and ‘cons’ and your overall impressions.
7. Make the right offer. Before making an offer, consider sales of similar homes in the last three to six months. Your REALTOR® can help you establish market values. A rule of thumb is that a low first offer usually results in the buyer either losing the home or puts the seller on the defensive.
8. Select a qualified home inspector. An expert in home construction building codes and safety can help determine if there are potential problems that could require costly repairs down the road.
9. Avoid significant changes. Be aware that major purchases during the home buying process may jeopardize the buyer’s ability to close escrow.
10. Prepare for closing costs. Work with your loan officer and REALTOR® to determine what your closings costs will be so you know how much you need to save before the close of escrow.
Monday, December 17, 2007
Friday, December 14, 2007
Nation: 30-Year Mortgage Rates Fall To Lowest Point In More Than 2 Years
Rates fell sharply again last week, dropping to an average of 5.96 percent. That was down from 6.10 percent the previous week and was the lowest rate since September 2005when they averaged 5.91 percent. Rates on 15-year fixed-rate mortgages, a popular choice for re-fi's, slid to 5.65 percent from 5.73 percent the previous week. The rates do not include add-on fees know as points. This is a great time to buy- low interest rates and great home pirces!
Monday, December 10, 2007
St. Paul: City Officials Wary Of Developer's Ambitious Skyscraper Plans
Dean D. Johnson, one of St. Paul's native sons, is one of the most enigmatic developers aiming to make his mark in St. Paul. Now a developer in Belgium, he has set his sights on at least four downtown properties,including the now-razed Wabasha Court complex. Johnson's proposed tower would stretch about 40 stores and combine a five-star hotel with condos, an arts venue and offices. All this on a parking lot where past development dreams have crumbled. St. Paul powers-that-be are wondering if Johnson is for real and are sniffing out his track record of his around-the-world projects. Johnson can argue passionately the merits of St. Paul's downtown and why it deserves cutting-edge architecture. "It feels more like TriBeCa and SoHo than anything in Minneapolis," he said
Tuesday, December 04, 2007
Hugo: Growing City Hopes To Retain Small-Town Charm
There are two sides to the city of Hugo, a northeast suburb 20 minutes from downtown St. Paul. The east side remains mainly rural with farms, single-family houses on large acreages, trails, lakes and streams. The west side is brimming with new housing, upscale restaurants and shops that were generated by a housing boom that started in 2000. there's a range of housing styles and prices ranging from $140,000 for townhouses to $1 million-plus for single-family homes. the average home sale price so far this year is $271,083 and there were 195 homes on the market in October. In redeveloping the downtown the city hopes to retain an old-fashioned charm with trails, sidewalks and green space
Monday, November 26, 2007
Upside of a Downturn
Most of the financial news lately has been bad. The dollar is the weakest it's ever been; a barrel of oil costs $100; some housing markets are frozen stiff; ratings agencies are being investigated; lenders and securities firms are writing off billions in mortgage-related losses.
If you're one of a million or so homeowners going through foreclosure, we feel for you. If you're one of the thousands losing your job because of the real estate downturn, we feel for you. And if this thing tips our economy into a recession, we're all in for a pity party.
But it's the holiday season, which means a time to reflect on the good things in life and what we're all thankful for -- whether we asked for these things or not. There are some upsides to this dumpy market, such as:
1. The downturn has put a fire under real estate brokers to set their property listings free. Many new partnerships between brokers and Internet companies have formed this year. Brokers want free exposure online for properties that are now harder to sell.
2. The industry is getting leaner. Many agents have left or will leave the business; lots of mortgage brokers are gone. The speculators and hobby house flippers have waved goodbye. This means those who are left are more serious and skilled than in past years when all an agent had to do was put a sign in the yard.
3. Homes are homes again -- as in places to live -- and not considered quick-flip investments or ATM machines.
4. It's fun to be a buyer again. Sorry sellers, but nothing is more appealing to a buyer than a "price reduced" sign. People who were shut out before in some overheated markets may be able to afford homes now since they won't have to outbid 40 other offers.
5. If you're an investor who's in this for the long haul, now's your chance to grab some cheap investments.
6. Slower markets afford some time to rethink business models and experiment with new methods. Lots of agents have taken to blogging in their spare time, which has raised the level of community among these early adopters and innovators.
Happy holidays from all of us at The Singhal Team
If you're one of a million or so homeowners going through foreclosure, we feel for you. If you're one of the thousands losing your job because of the real estate downturn, we feel for you. And if this thing tips our economy into a recession, we're all in for a pity party.
But it's the holiday season, which means a time to reflect on the good things in life and what we're all thankful for -- whether we asked for these things or not. There are some upsides to this dumpy market, such as:
1. The downturn has put a fire under real estate brokers to set their property listings free. Many new partnerships between brokers and Internet companies have formed this year. Brokers want free exposure online for properties that are now harder to sell.
2. The industry is getting leaner. Many agents have left or will leave the business; lots of mortgage brokers are gone. The speculators and hobby house flippers have waved goodbye. This means those who are left are more serious and skilled than in past years when all an agent had to do was put a sign in the yard.
3. Homes are homes again -- as in places to live -- and not considered quick-flip investments or ATM machines.
4. It's fun to be a buyer again. Sorry sellers, but nothing is more appealing to a buyer than a "price reduced" sign. People who were shut out before in some overheated markets may be able to afford homes now since they won't have to outbid 40 other offers.
5. If you're an investor who's in this for the long haul, now's your chance to grab some cheap investments.
6. Slower markets afford some time to rethink business models and experiment with new methods. Lots of agents have taken to blogging in their spare time, which has raised the level of community among these early adopters and innovators.
Happy holidays from all of us at The Singhal Team
Friday, November 16, 2007
Minneapolis: Calhoun Square Pre-Development Under Way
Discussions have begun with architects, potential retailers, residents, city staff and elected officials about the future of the shopping center at the corner of Hennepin and Lake. the 145,000-square-foot building has been awaiting a face lift for years and new owner BlackRock, a New York-based investment firm with more than $1 trillion in assets--plans to make it happen. Planners have begun the search for 'magnet' tenants whose presence might attract other businesses. Aaron Rubenstein, chairman of the Calhoun Area Residents Action Group said planners have been receptive of neighborhood concerns and ideas.
Tuesday, November 13, 2007
Blaine: City Wary Of Using Eminent Domain For Sports Complex
Developer John Donnelly said that his plan for a $150 million sports and entertainment complex won't be able to attract investors without removing five light-industrial properties next to the site. Donnelly described the project as an asset to "Blaine's identity as an amateur athletics center for the Midwest." Plans include a hotel, water park, fitness center, restaurants, a lake and public square, not to mention indoor surfing and skydiving! Donnelly's group is a spin-off of a previous developer that proposed a smaller version of the complex in 2005. The current project represents 30 developable acres on a larger site that encompasses 63 acres.
Monday, November 05, 2007
St. Paul: Urban Cabins
When it seems like most Minnesotans are sprinting toward their lakeside cabins for the weekend, some trek to St. Paul for weekends at their 'urban cabins'. "We are so not cabin people. We can't even keep up with the yard we own," said Bonnie McGoon, of Rochester. McGoon and her husband, a cardiologist from Rochester bought their restored Lowry Building condo last year. Weekend warriors from as far away as California have purchased 22 of the building's 124 occupied units. Hailing from rural areas or sleepy towns, they head to St. Paul craving culture, coffee shops, hockey games and museums. "I wouldn't call it an emerging demographic, but it's an interesting piece of the market puzzle," said Bud Kleppe, a downtown agent.
Monday, October 29, 2007
Nation: Improved Mortgage Market Bodes Well For Housing In '08
Lawrence Yun, National Association of Realtors, senior economist, notes that widening credit availability will help turn around homes sales. "Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch and FHA loans are replacing subprime mortgages." Existing home sales are expected to total 5.78 million in 2007 and then rise to 6.12 next year, down from 1.05 million in '06. "A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices," Yun said
Monday, October 22, 2007
Metro: 10,630 New Condo Units On Market And 11,000 More Proposed
The numbers come from a quick third-quarter overview of the market from the Plymouth office of MetroStudy. Not surprisingly, just under half of the actively selling new condos (4,647) are in Minneapolis and only about 14 percent (1,441), are in St. Paul. The study does not include nearly the nearly 11,000 proposed condo units such as Bridges of St. Paul development. As of the third Quarter, about 75 percent of the 10,630 units were under construction and slightly more than half were reported as presold but not closed
Tuesday, October 16, 2007
The Top Ten Reasons It's a Great Time To Buy Real Estate!
1. Selection, Selection, selection, selection. Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 5,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
2. No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the 'feeding frenzy' that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer's market.
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you 'make them an offer they can't refuse'.
4. Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
6. There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords.
9. Location, location, location. Today's buyers can find homes closer to work. In the past buyers flocked to Maricopa and Queen Creek in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
10. Real Financing is available. The 'wink, wink' zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It's a great time to buy real estate!
2. No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the 'feeding frenzy' that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer's market.
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you 'make them an offer they can't refuse'.
4. Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
6. There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords.
9. Location, location, location. Today's buyers can find homes closer to work. In the past buyers flocked to Maricopa and Queen Creek in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
10. Real Financing is available. The 'wink, wink' zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It's a great time to buy real estate!
Monday, October 08, 2007
Housing supply outlook
Builders have dramatically decreased production in response to changing market conditions. Total new construction inventory has fallen by 15.3 percent when compared to this time last year.
The average price per square foot of all new construction units is down 7.9 percent, confirming that builders are reducing prices to sell their excess inventory.
Condos have the highest month's supply of any property type. This growing imbalance is almost entirely due to a large drop off in sales of new construction condos, down 37.4 percent from this time last year.
Single-family detached homes are holding their value better than other property types. Their current supply in months is the lowest, the sales rate has declined the least, and their average sales price is down only 0.7 percent from this time last year.
Massive inventory growth is taking place in the lowest price ranges, possibly due to the role of subprime foreclosures.
Information gathered from the Minneapolis Area Association of Realtors
The average price per square foot of all new construction units is down 7.9 percent, confirming that builders are reducing prices to sell their excess inventory.
Condos have the highest month's supply of any property type. This growing imbalance is almost entirely due to a large drop off in sales of new construction condos, down 37.4 percent from this time last year.
Single-family detached homes are holding their value better than other property types. Their current supply in months is the lowest, the sales rate has declined the least, and their average sales price is down only 0.7 percent from this time last year.
Massive inventory growth is taking place in the lowest price ranges, possibly due to the role of subprime foreclosures.
Information gathered from the Minneapolis Area Association of Realtors
Friday, September 21, 2007
Special Fed Alert
The long awaited Fed decision arrived with a bang! The Fed surprised many economists and traders with a half percent cut in both the Fed Funds and Discount Rates. Stocks soared higher and enjoyed their largest gain since 2003.
What does the Fed cut mean? Rates on consumer debt, car loans, and Home Equity lines will all benefit. But because Home Loan rates are tied more closely to inflation, it is not uncommon to see less of a reaction...or even an opposite reaction in mortgage rates.
The Fed cut also hurts rates of return on investments, which gives foreign investors less incentive to invest in US securities. This has sent the Dollar much lower against the currency of most major foreign countries. This makes foreign goods more expensive for us to buy, which adds to inflation pressures.
Overall, the Fed cut is good news for the economy & for home owners, but may nudge inflation a bit higher. Please call or email us should you have any questions or concerns.
What does the Fed cut mean? Rates on consumer debt, car loans, and Home Equity lines will all benefit. But because Home Loan rates are tied more closely to inflation, it is not uncommon to see less of a reaction...or even an opposite reaction in mortgage rates.
The Fed cut also hurts rates of return on investments, which gives foreign investors less incentive to invest in US securities. This has sent the Dollar much lower against the currency of most major foreign countries. This makes foreign goods more expensive for us to buy, which adds to inflation pressures.
Overall, the Fed cut is good news for the economy & for home owners, but may nudge inflation a bit higher. Please call or email us should you have any questions or concerns.
Tuesday, September 18, 2007
Thinking of buying or selling a home?
Thinking of buying or selling a home, know someone who is thinking of making a move or just interested in the happenings of the real estate market?
Visit www.greatertwincitieshomes.com to sign up for your
VIP all access pass.
Get insider access to all the reports, tools and resources including your own home buying/selling plans, zero down payment programs, Bank owned and foreclosure property reports, your homes current market value online, find out what your neighbors home sold for and much more all provided free with no obligation.
Visit www.greatertwincitieshomes.com to sign up for your
VIP all access pass.
Get insider access to all the reports, tools and resources including your own home buying/selling plans, zero down payment programs, Bank owned and foreclosure property reports, your homes current market value online, find out what your neighbors home sold for and much more all provided free with no obligation.
Wednesday, September 12, 2007
Yes, Twin Cities, It's a Buyer's Market
The Twins Cities residential housing supply reached 7.4 months of inventory in August, well above the 5 month mark that is considered balanced between buyers and sellers. Last August, the supply was 4.5 months and in February of this year it was still only 4.8 months. The housing supply is the theoretical amount of time it would take for all the homes currently on the market to become pending or sold. It is found by dividing the number of homes currently listed by the number of homes being sold each month. Currently there are approximatlely 31,430 homes on the market in the Twin Cities area. If you are thinking of making a move give The Singhal Team a call today or visit www.greatertwincitieshomes.com for your VIP all access pass.
Get insider access to all the reports, tools and resources including your own buying/selling plan, zero down programs, foreclosure reports, your homes value online, find out what your neighbors home sold for and much more all provided free with no obligation.
Get insider access to all the reports, tools and resources including your own buying/selling plan, zero down programs, foreclosure reports, your homes value online, find out what your neighbors home sold for and much more all provided free with no obligation.
Thursday, September 06, 2007
Twin Cities Median Sales Price Virtually Unchanged
The St. Paul Area Association of Realtor released their monthly market statistics today. The median sales price for the 13 county Twin Cities metro area for August, 2006 was $235,000, up only 0.04 percent from $234,900 in August 2005. This is still 2.6 percent higher the the total 2005 median price which was $228,900. All counties did not fare equally, however. The Anoka County median price was up 2.45% from August 2005. Hennepin County was up only 0.42% and Ramsey County was down 0.18%. Washington and Chisago Counties lost 3.42% and 9.80% respectively.
Monday, August 27, 2007
Minnesota Real Estate Update
Newly signed purchase agreements for the week ending August 11th are down 12% from this exact time in 2006. Thankfully, builders and sellers have slowed a bit in putting new properties on the market, with 2007 seeing a 3.3% decrease compared to 2006 in new listings processed.
Currently, there still remains many active listings on the MLS in the 13 county metro area. Many home sellers are seeing increased market time, with price and condition remaining as crucial as ever.
On the other hand, the short sale and bank owned market here in the Twin Cities is continuing to see high inventory numbers AND high sales numbers. A short sale occurs essentially when the seller is unable to sell the property for what he or she owes on it. The bank takes a loss on it. It should be noted, banks by and large prefer a short sale over a foreclosure. In the case of the foreclosure, the bank loses even a greater amount of money.
If you are a seller who is experiencing a tough situation and needs to avoid foreclosure, you may look at the possiblity of doing a short sale. Please call us at 651-398-6261 for more information. The Singhal Team is here to help you through this process and difficult time period.
Currently, there still remains many active listings on the MLS in the 13 county metro area. Many home sellers are seeing increased market time, with price and condition remaining as crucial as ever.
On the other hand, the short sale and bank owned market here in the Twin Cities is continuing to see high inventory numbers AND high sales numbers. A short sale occurs essentially when the seller is unable to sell the property for what he or she owes on it. The bank takes a loss on it. It should be noted, banks by and large prefer a short sale over a foreclosure. In the case of the foreclosure, the bank loses even a greater amount of money.
If you are a seller who is experiencing a tough situation and needs to avoid foreclosure, you may look at the possiblity of doing a short sale. Please call us at 651-398-6261 for more information. The Singhal Team is here to help you through this process and difficult time period.
Tuesday, August 21, 2007
If you are a consumer who is considering selling your home, now is the perfect time to put your home on the market and show it off to potential buyers. We are experiencing a positive economy, and there are many qualified buyers in the market who are facing the best of all possible circumstances. To maximize their selling opportunity in today's real estate market, most sellers are seeking knowledgeable real estate experts. Call us today!
Tuesday, August 14, 2007
Chinese Proverb
There is a Chinese proverb that states, "May you live in interesting times." It is often argued that the word interesting is meant to be a synonym for turbulent or dangerous. This phrase hits the bull's-eye given the current state of the financial markets.
While stocks and bonds are swinging around wildly there is good news. Interest rates for conforming and FHA/VA loans are still in the 6's, historically low by many standards and the funds are widely available. In addition, the National Association of Realtors has projected home sales will move in a narrow range and improve throughout the year.
While stocks and bonds are swinging around wildly there is good news. Interest rates for conforming and FHA/VA loans are still in the 6's, historically low by many standards and the funds are widely available. In addition, the National Association of Realtors has projected home sales will move in a narrow range and improve throughout the year.
Monday, August 06, 2007
Myths of a Buyers Market
For the better part of two, maybe three, years, communities throughout the Twin Cities, Minnesota and the entire U.S. have been in the throws of a full fledged buyers market. Sellers have adjusted their minds and their prices. They have roll up their sleeves and worked to make their homes shine for the periodic showings. Homes are selling...Just not as quickly as they sold in the past decade. So when a Realtor shows a potential buyer a listing, the sellers want it to make the short list of second showing homes.
With years upon years of sellers running the show, it is hard for the average person to understand why a home is not selling. Heck, it's hard for the average real estate agent. Basically, the homes-for-sale inventory is way up. Buyers have 50-100 homes that will meet their needs. They have become very selective when writing their offers. They want the best deal on a place to call home. Buyers in most cases are no longer buying with just their hearts; their heads are 100% in the game.
Working with both buyers and sellers throughout Anoka County in this changed market, I have noticed some interesting patterns of thinking on both sides of the transaction. Not all buyers or sellers have a firm grasp of what is happen in the real estate market which is causing some misunderstandings and frustration. It is not just in Ham Lake and Forest Lake that these situations arise, in speaking with other agents and several buyers and sellers, these misunderstandings are widespread.
Myth 1 ~ A home with a high DOM (Days on Market) is a "problem" house.
Agents are as guilty of this assumption as their clients. Often in this market, homes just slightly overpriced can sit for months with nothing wrong per say, except price. When the price is adjusted, the DOM is still there, but the "problem" is gone. There are many GREAT homes now properly priced with high DOMs.
Myth 2 ~ Sellers are desperate and will take ANY Offer.
Everyone seems to have heard of someone who got that great deal on a house. Stories of sellers who needed to sell and gave away the property just to get out are running rampant over the proverbial office water cooler. When I hear a story like this from buyers, I ask them if they actually saw the paperwork. If they have not, I remind them not to believe everything they hear. Contrary to all of the stories flying around, people don't give away houses. They just don't. Reality is sellers will accept a fair price for their home based on current market conditions. If a seller has their home priced fairly, they won't want to come down another $20,000-$40,000.
Myth 3 ~ Buyers who write "lowball" offers should be looking for homes in that lower price range.
Again, sellers and their gents alike often think that a very low or "lowball" offer on a home is a junk offer. They will often send it back without a counter offer assuming the buyer is looking out of their price range and can't afford to spend more. Hence, the low offer.
But in many cases, the buyers are not writing an offer at the top of their game. Consider the situation of an entry level buyer in a starter home. It is imperative that a first time buyer not overpay. If their game plan is to sell again in 3-5 years, they will never have enough equity as the market is expected to stay flat for several years. Interested buyers want to start the negotiations at a lower amount and if they believe the home is not priced correctly, it might appear to be a lowball offer. A smart buyer's agent will submit the offer with a competitive market analysis (CMA) to support the low offer. Sellers receiving an offer with a CMA attached would be wise to carefully consider the offer before throwing it back. The first offer could be the best and only offer a seller will see for months.
The bottom-line here is that we are in a changed market where buyers have a bit of the upper hand. But that doesn't mean that buyers and sellers cannot find common ground and negotiate purchase agreements that are acceptable to both sides. Agents play a more important role than ever by making certain that clients have an understanding of the market and how their offer or pricing is being perceived. Choosing to work with a professional Realtor has never been a more important decision than it is today.
With years upon years of sellers running the show, it is hard for the average person to understand why a home is not selling. Heck, it's hard for the average real estate agent. Basically, the homes-for-sale inventory is way up. Buyers have 50-100 homes that will meet their needs. They have become very selective when writing their offers. They want the best deal on a place to call home. Buyers in most cases are no longer buying with just their hearts; their heads are 100% in the game.
Working with both buyers and sellers throughout Anoka County in this changed market, I have noticed some interesting patterns of thinking on both sides of the transaction. Not all buyers or sellers have a firm grasp of what is happen in the real estate market which is causing some misunderstandings and frustration. It is not just in Ham Lake and Forest Lake that these situations arise, in speaking with other agents and several buyers and sellers, these misunderstandings are widespread.
Myth 1 ~ A home with a high DOM (Days on Market) is a "problem" house.
Agents are as guilty of this assumption as their clients. Often in this market, homes just slightly overpriced can sit for months with nothing wrong per say, except price. When the price is adjusted, the DOM is still there, but the "problem" is gone. There are many GREAT homes now properly priced with high DOMs.
Myth 2 ~ Sellers are desperate and will take ANY Offer.
Everyone seems to have heard of someone who got that great deal on a house. Stories of sellers who needed to sell and gave away the property just to get out are running rampant over the proverbial office water cooler. When I hear a story like this from buyers, I ask them if they actually saw the paperwork. If they have not, I remind them not to believe everything they hear. Contrary to all of the stories flying around, people don't give away houses. They just don't. Reality is sellers will accept a fair price for their home based on current market conditions. If a seller has their home priced fairly, they won't want to come down another $20,000-$40,000.
Myth 3 ~ Buyers who write "lowball" offers should be looking for homes in that lower price range.
Again, sellers and their gents alike often think that a very low or "lowball" offer on a home is a junk offer. They will often send it back without a counter offer assuming the buyer is looking out of their price range and can't afford to spend more. Hence, the low offer.
But in many cases, the buyers are not writing an offer at the top of their game. Consider the situation of an entry level buyer in a starter home. It is imperative that a first time buyer not overpay. If their game plan is to sell again in 3-5 years, they will never have enough equity as the market is expected to stay flat for several years. Interested buyers want to start the negotiations at a lower amount and if they believe the home is not priced correctly, it might appear to be a lowball offer. A smart buyer's agent will submit the offer with a competitive market analysis (CMA) to support the low offer. Sellers receiving an offer with a CMA attached would be wise to carefully consider the offer before throwing it back. The first offer could be the best and only offer a seller will see for months.
The bottom-line here is that we are in a changed market where buyers have a bit of the upper hand. But that doesn't mean that buyers and sellers cannot find common ground and negotiate purchase agreements that are acceptable to both sides. Agents play a more important role than ever by making certain that clients have an understanding of the market and how their offer or pricing is being perceived. Choosing to work with a professional Realtor has never been a more important decision than it is today.
Wednesday, July 25, 2007
Sub-Prime Mortgage Companies in Major Trouble
Things are cooling off fast in the Sub-Prime mortgage business. Several companies who were in the vanguard of lending to homebuyers with iffy credit ratings are closing their doors. Others are desperately looking for buyers who will take the firms off their hands.
Default rates on these loans has jumped dramatically, and realistic people are expecting more defaults as low-interest and interest-only Adjustable Rate Mortgages (ARMs) reset to their permanent higher interest rate. Those reset dates are just starting to fall due, and can raise payments by hundreds of dollars a month.
Of course, this is leading borrowers to scramble for refinancing, as their reset dates approach. Sadly, fewer and fewer loan outfits are ready to refinance a loan for someone with a questionable credit history, so it's getting harder and harder for the homeowner, soon to be beset with a house payment he or she can't afford.
This problem is affecting even huge banks and other corporations, which buy these loans from the loan brokers and other finance companies. It's getting scary out there for the deep pocket folks, who have been planning on nice profits when the higher rates kick in on these loans.
The problem is made worse by the flat or falling housing market in many areas, including the Twin Cities. In some cases, homebuyers have purchased homes with 0% down payment, creatively financing the entire purchase price of their home with one of these ARMs. They figured that they'd just refinance before the resetting of the interest rate. Trouble is, they now owe more on their existing mortgage than the home is currently worth. They're upside down on their loan.
Typically, such borrowers don't have much cash on hand to make up the difference between what they owe on the home and what lenders are willing to loan them. Worse, the fancy-schmancy mortgages with the adjustable rates and the 100% financing are just about drying up out there. You can still get one, maybe, if you're not too much upside down and your FICA credit score is over 700, but it'll take some hunting. If your credit score is around 650, you can just forget about it right now. Nobody's going to want to talk to you, especially if you have no equity in your home or are upside down on your mortgage. If your credit score is over 750 or so, you'll have no problem, but you're probably not in this situation anyhow.
Lots of folks are going to do what lots of folks have already done...walk away from the home and let the foreclosure happen. That's already starting, with foreclosure rates jumping like Mexican jumping beans. They'll go back to renting again, and the home will be on the market, joining the glut of homes already out there. That will drive prices for existing homes lower, making the problem even worse. The rental market will do well, and rents will rise, due to the increased demand, making life even tougher for folks living on the margin.
Worse, homebuilders are going to be hit hard, since a glut in the home marketplace makes it tough to sell all those new homes they want to build. Many builders have already cut back on their future plans for developments, and have had to offer deep discounts to get buyers into the homes they've already built.
What to do? Well, if you own a home with a traditional mortgage and you've built up equity, don't worry about it. Just keep making the payments. If you have a home with little or no equity, an ARM that will reset soon, then worry a lot. Start making phone calls to see if you can line up a refinance now, even if your ARM doesn't reset for quite a while. If you're upside down on your loan, meaning that you owe more than your house is currently worth, worry even more. Try to find a way to raise as much cash as possible, with the goal being to wipe out the difference between the home's value and the amount you owe on it. If you can do that, you'll be more appealing in a refinance.
If you're in a bad spot and have a poor credit score, then your worrying is more than justified. Given the current nervous state of lenders, you'll have a very difficult time getting a new loan, particularly if you have no equity or negative equity. You need to talk to a credit counselor who is not a loan broker and see if there's a solution for you. It could be a tough spot.
You'd be amazed at which major banks and corporations are tied up in this potentially disastrous situation. Wells Fargo, CitiGroup, Wachovia...all have their fingers deep in the subprime mortgage pie. Even General Motors, which just spun off its GMAC division, which had tons of money in the subprime mortgage business, may have to take a hit of almost $1 Billion in writeoffs. That's not good, given its current weak position in the automotive marketplace.
Default rates on these loans has jumped dramatically, and realistic people are expecting more defaults as low-interest and interest-only Adjustable Rate Mortgages (ARMs) reset to their permanent higher interest rate. Those reset dates are just starting to fall due, and can raise payments by hundreds of dollars a month.
Of course, this is leading borrowers to scramble for refinancing, as their reset dates approach. Sadly, fewer and fewer loan outfits are ready to refinance a loan for someone with a questionable credit history, so it's getting harder and harder for the homeowner, soon to be beset with a house payment he or she can't afford.
This problem is affecting even huge banks and other corporations, which buy these loans from the loan brokers and other finance companies. It's getting scary out there for the deep pocket folks, who have been planning on nice profits when the higher rates kick in on these loans.
The problem is made worse by the flat or falling housing market in many areas, including the Twin Cities. In some cases, homebuyers have purchased homes with 0% down payment, creatively financing the entire purchase price of their home with one of these ARMs. They figured that they'd just refinance before the resetting of the interest rate. Trouble is, they now owe more on their existing mortgage than the home is currently worth. They're upside down on their loan.
Typically, such borrowers don't have much cash on hand to make up the difference between what they owe on the home and what lenders are willing to loan them. Worse, the fancy-schmancy mortgages with the adjustable rates and the 100% financing are just about drying up out there. You can still get one, maybe, if you're not too much upside down and your FICA credit score is over 700, but it'll take some hunting. If your credit score is around 650, you can just forget about it right now. Nobody's going to want to talk to you, especially if you have no equity in your home or are upside down on your mortgage. If your credit score is over 750 or so, you'll have no problem, but you're probably not in this situation anyhow.
Lots of folks are going to do what lots of folks have already done...walk away from the home and let the foreclosure happen. That's already starting, with foreclosure rates jumping like Mexican jumping beans. They'll go back to renting again, and the home will be on the market, joining the glut of homes already out there. That will drive prices for existing homes lower, making the problem even worse. The rental market will do well, and rents will rise, due to the increased demand, making life even tougher for folks living on the margin.
Worse, homebuilders are going to be hit hard, since a glut in the home marketplace makes it tough to sell all those new homes they want to build. Many builders have already cut back on their future plans for developments, and have had to offer deep discounts to get buyers into the homes they've already built.
What to do? Well, if you own a home with a traditional mortgage and you've built up equity, don't worry about it. Just keep making the payments. If you have a home with little or no equity, an ARM that will reset soon, then worry a lot. Start making phone calls to see if you can line up a refinance now, even if your ARM doesn't reset for quite a while. If you're upside down on your loan, meaning that you owe more than your house is currently worth, worry even more. Try to find a way to raise as much cash as possible, with the goal being to wipe out the difference between the home's value and the amount you owe on it. If you can do that, you'll be more appealing in a refinance.
If you're in a bad spot and have a poor credit score, then your worrying is more than justified. Given the current nervous state of lenders, you'll have a very difficult time getting a new loan, particularly if you have no equity or negative equity. You need to talk to a credit counselor who is not a loan broker and see if there's a solution for you. It could be a tough spot.
You'd be amazed at which major banks and corporations are tied up in this potentially disastrous situation. Wells Fargo, CitiGroup, Wachovia...all have their fingers deep in the subprime mortgage pie. Even General Motors, which just spun off its GMAC division, which had tons of money in the subprime mortgage business, may have to take a hit of almost $1 Billion in writeoffs. That's not good, given its current weak position in the automotive marketplace.
Friday, July 20, 2007
Real Estate Weekly Update
The market continues to be soft here in the Twin Cities for sellers. This past week, there were 2400 new MLS listings put on the market, and 1000 MLS listings went pending. Inventory levels continue to hover at the 43,000 active properties mark. This is up from 38,000 actives as of last year at this time.
Compared to one year ago at this time, pending sales are down almost 16%. Thankfully, new listings processed were also down this week 3% compared to last year at this same time. The rise in interest rates over the past month has also created more affordability problems for many buyers.
In spite of this "doom and gloom," the Singhal Team continues to find qualified buyers who are looking to buy. Sellers however are being forced to be "realistic" on sales price.
Compared to one year ago at this time, pending sales are down almost 16%. Thankfully, new listings processed were also down this week 3% compared to last year at this same time. The rise in interest rates over the past month has also created more affordability problems for many buyers.
In spite of this "doom and gloom," the Singhal Team continues to find qualified buyers who are looking to buy. Sellers however are being forced to be "realistic" on sales price.
Friday, July 13, 2007
Market update
Should we believe everything we have heard from the media regarding today's real estate market? Numerous reports speculate the local and national real estate market might be declining. Unfortunately, the media only reports part of the story about today's real estate market. True, the market in the Twin Cities and nationally is in a state of correction. Contrary to what is being reported in the media, the bubble has not burst. It is a very good time to sell a home and even better time to buy. Here are just a few points to consider: interest rates are at record lows, builders are cutting priced due to oversupply on new construction homes, plus there is a good supply of existing homes available.
Tuesday, July 10, 2007
H&R Block posts loss on U.S. subprime woes
NEW YORK (Reuters) - H&R Block Inc. (NYSE:HRB - news), the largest U.S. tax preparer, posted a fourth-quarter loss on Thursday, as the deterioration of the U.S. subprime market hurt the value of its mortgage business.
The company also said the value of its subprime unit Option One Mortgage Corp. fell to $1.1 billion as of April 30. H&R Block agreed on April 20 to sell Option One to Cerberus Capital Management for a price tied to its closing date value. The deal is expected to be finished in the quarter ending October 31.
Block posted a net loss of $85.6 million, or 26 cents a share, reflecting $678 million in losses attributed to Option One, its UK tax business and other units up for sale.
Excluding discontinued operations, income rose 9 percent to $591.2 million, or $1.81 a share, in the quarter ended April 30, from $541.7 million, or $1.63, a year earlier. Even on this basis, Block fell short of the average forecast by 7 cents.
The shortfall and the depressed value of Option One sent shares of H&R Block down 4 percent.
"Missing their number didn't help," said FTN Midwest business services analyst Kartik Mehta, who has a "buy" rating on Block shares. "I think investors wanted them to buy back more shares and add leverage, but getting a bank charter has hindered them."
FTN's Mehta said Block earnings fell short because its tax rate was higher than expected, while development spending squeezed profit margins in the tax preparation business.
BEYOND TAX
The Kansas City-based company has tried for years to expand from once-a-year tax accountants to a full service banking, loans and advice company. Some moves, such as expanding into mortgages, have backfired, while its promotion of refund anticipation loans prompted regulatory action and lawsuits.
Among its latest efforts is building a consumer bank, for which Block seeks a federal charter. H&R Block expects that by offering savings accounts, credit cards and financial advice that will generate revenue even after tax season.
During a conference call with analysts, the company said it would not buy back stock until it meets regulatory capital requirements for the bank unit. Chief Executive Mark Ernst said Block likely won't be able to repurchase shares until the fiscal fourth quarter.
The company repeated it expects to complete its sale of Option One to Cerberus during the October quarter. Block said the unit's net asset value fell by roughly $300 million to $1.1 billion as of April 30.
Under the Cerberus agreement, which calls for a $300 million discount, H&R Block will receive $800 million in cash upfront plus up to $300 million in Option One profit over following 18 months.
Block also will retain about $300 million in tax loss benefits, which will help offset any losses.
For the quarter, revenue rose 8 percent to $2.4 billion, also falling shy of expectations. Tax services revenue rose 8 percent to $1.9 billion, as clients served through U.S. branch offices and online rose 4.4 percent to a record 20.3 million.
Operations in Canada and Australia also boosted results, with 22.9 million clients served. Consumer financial services revenue rose 57 percent to $120.2 million.
Looking ahead, Block said it expects earnings from continuing operations of $1.25 to $1.45 per share in fiscal 2008, below the current average forecast of $1.47.
The company also said the value of its subprime unit Option One Mortgage Corp. fell to $1.1 billion as of April 30. H&R Block agreed on April 20 to sell Option One to Cerberus Capital Management for a price tied to its closing date value. The deal is expected to be finished in the quarter ending October 31.
Block posted a net loss of $85.6 million, or 26 cents a share, reflecting $678 million in losses attributed to Option One, its UK tax business and other units up for sale.
Excluding discontinued operations, income rose 9 percent to $591.2 million, or $1.81 a share, in the quarter ended April 30, from $541.7 million, or $1.63, a year earlier. Even on this basis, Block fell short of the average forecast by 7 cents.
The shortfall and the depressed value of Option One sent shares of H&R Block down 4 percent.
"Missing their number didn't help," said FTN Midwest business services analyst Kartik Mehta, who has a "buy" rating on Block shares. "I think investors wanted them to buy back more shares and add leverage, but getting a bank charter has hindered them."
FTN's Mehta said Block earnings fell short because its tax rate was higher than expected, while development spending squeezed profit margins in the tax preparation business.
BEYOND TAX
The Kansas City-based company has tried for years to expand from once-a-year tax accountants to a full service banking, loans and advice company. Some moves, such as expanding into mortgages, have backfired, while its promotion of refund anticipation loans prompted regulatory action and lawsuits.
Among its latest efforts is building a consumer bank, for which Block seeks a federal charter. H&R Block expects that by offering savings accounts, credit cards and financial advice that will generate revenue even after tax season.
During a conference call with analysts, the company said it would not buy back stock until it meets regulatory capital requirements for the bank unit. Chief Executive Mark Ernst said Block likely won't be able to repurchase shares until the fiscal fourth quarter.
The company repeated it expects to complete its sale of Option One to Cerberus during the October quarter. Block said the unit's net asset value fell by roughly $300 million to $1.1 billion as of April 30.
Under the Cerberus agreement, which calls for a $300 million discount, H&R Block will receive $800 million in cash upfront plus up to $300 million in Option One profit over following 18 months.
Block also will retain about $300 million in tax loss benefits, which will help offset any losses.
For the quarter, revenue rose 8 percent to $2.4 billion, also falling shy of expectations. Tax services revenue rose 8 percent to $1.9 billion, as clients served through U.S. branch offices and online rose 4.4 percent to a record 20.3 million.
Operations in Canada and Australia also boosted results, with 22.9 million clients served. Consumer financial services revenue rose 57 percent to $120.2 million.
Looking ahead, Block said it expects earnings from continuing operations of $1.25 to $1.45 per share in fiscal 2008, below the current average forecast of $1.47.
Wednesday, June 27, 2007
New home sales, consumer confidence fall
WASHINGTON (Reuters) - U.S. new home sales fell in May while consumer confidence hit a 10-month low in June on worries about jobs and the business climate.
"These are numbers that are consistent with a slowing down in activity, a moderation on the consumption side," said Steven Wieting, an economist with Citigroup Global Markets in New York.
Sales of new U.S. homes fell 1.6 percent last month to an annual rate of 915,000 units from a downwardly revised pace of 930,000 in April, the Commerce Department said on Tuesday. Analysts had been looking for May new home sales of 925,000.
While sales fell, prices rose. The median sales price of a new home climbed 1.5 percent in May to $236,100 from $232,700 in April. That marked a reversal from April, when prices took a big tumble but sales rose strongly.
However, adding to the gloomy picture for housing, a separate report released on Tuesday showed existing U.S. single-family home prices declined in April, extending a string of negative year-on-year decreases that started in January.
As woes deepened for the housing sector, the second-largest U.S. home builder, Lennar Corp. (NYSE:LEN - news), posted a quarterly loss, forecast a loss for the current quarter, and warned the housing market could tumble further.
The drag the struggling housing market has created for the broader economy looks set to persist, analysts said.
"Housing's contribution to (economic) growth will be negative in both the second quarter and the third quarter," said Steven Wood, chief economist at Insight Economics in Danville, California.
U.S. stocks slipped for a third straight day as investors worried about potential fallout from the ailing subprime mortgage market. The blue chip Dow Jones industrial average closed down 14.39 points at 13,337.66.
Prices for U.S. government bonds were little changed, while the dollar fell against the Japanese yen.
CONFIDENCE SLIPS
While the U.S. economy appears to have gained strength after expanding at an anemic 0.6 percent pace in the first quarter, concerns remain the stalwart American consumer may stumble under the weight of high gasoline prices and hard-to-afford mortgages.
The Conference Board said its index of consumer sentiment fell to 103.9 in June, the weakest since August 2006, from an upwardly revised 108.5 in May. Economists polled by Reuters had been looking for a reading of 105.5.
"A perceived softening in present-day business and employment conditions are the major reasons behind this month's pull-back in confidence," said Lynn Franco, director of the Conference Board's Consumer Research Center.
The business research group's present situation index fell to 127.9 in June -- its lowest level since November 2006 -- from 136.1 in May. The expectations index slipped to 87.9 from 90.1 a month ago.
"Even though gasoline prices have fallen back from their peak, it seems that they have taken their toll on the consumer," said Nigel Gault, chief U.S. economist at Global Insight in Lexington, Massachusetts.
"In addition, the labor market component of the Conference Board survey hints at softening in the job market," he said.
While economists say shifts in consumer confidence do not always portend changes in spending, two reports on Tuesday showed chain store sales growth softened last week.
Redbook Research said chain store sales rose only 1.4 percent last week from a year earlier, slowing from 2 percent a week earlier, while the International Council of Shopping Centers and UBS Securities said sales rose 1.7 percent from a year ago, off from 1.9 percent in the prior week.
"These are numbers that are consistent with a slowing down in activity, a moderation on the consumption side," said Steven Wieting, an economist with Citigroup Global Markets in New York.
Sales of new U.S. homes fell 1.6 percent last month to an annual rate of 915,000 units from a downwardly revised pace of 930,000 in April, the Commerce Department said on Tuesday. Analysts had been looking for May new home sales of 925,000.
While sales fell, prices rose. The median sales price of a new home climbed 1.5 percent in May to $236,100 from $232,700 in April. That marked a reversal from April, when prices took a big tumble but sales rose strongly.
However, adding to the gloomy picture for housing, a separate report released on Tuesday showed existing U.S. single-family home prices declined in April, extending a string of negative year-on-year decreases that started in January.
As woes deepened for the housing sector, the second-largest U.S. home builder, Lennar Corp. (NYSE:LEN - news), posted a quarterly loss, forecast a loss for the current quarter, and warned the housing market could tumble further.
The drag the struggling housing market has created for the broader economy looks set to persist, analysts said.
"Housing's contribution to (economic) growth will be negative in both the second quarter and the third quarter," said Steven Wood, chief economist at Insight Economics in Danville, California.
U.S. stocks slipped for a third straight day as investors worried about potential fallout from the ailing subprime mortgage market. The blue chip Dow Jones industrial average closed down 14.39 points at 13,337.66.
Prices for U.S. government bonds were little changed, while the dollar fell against the Japanese yen.
CONFIDENCE SLIPS
While the U.S. economy appears to have gained strength after expanding at an anemic 0.6 percent pace in the first quarter, concerns remain the stalwart American consumer may stumble under the weight of high gasoline prices and hard-to-afford mortgages.
The Conference Board said its index of consumer sentiment fell to 103.9 in June, the weakest since August 2006, from an upwardly revised 108.5 in May. Economists polled by Reuters had been looking for a reading of 105.5.
"A perceived softening in present-day business and employment conditions are the major reasons behind this month's pull-back in confidence," said Lynn Franco, director of the Conference Board's Consumer Research Center.
The business research group's present situation index fell to 127.9 in June -- its lowest level since November 2006 -- from 136.1 in May. The expectations index slipped to 87.9 from 90.1 a month ago.
"Even though gasoline prices have fallen back from their peak, it seems that they have taken their toll on the consumer," said Nigel Gault, chief U.S. economist at Global Insight in Lexington, Massachusetts.
"In addition, the labor market component of the Conference Board survey hints at softening in the job market," he said.
While economists say shifts in consumer confidence do not always portend changes in spending, two reports on Tuesday showed chain store sales growth softened last week.
Redbook Research said chain store sales rose only 1.4 percent last week from a year earlier, slowing from 2 percent a week earlier, while the International Council of Shopping Centers and UBS Securities said sales rose 1.7 percent from a year ago, off from 1.9 percent in the prior week.
Tuesday, June 26, 2007
U.S. economy to expand in coming months
NEW YORK — The U.S. economy should expand modestly in coming months as a healthy job market continues to trump weakness in housing prices, a gauge of future business activity showed on Thursday.
The Conference Board said its index of leading economic indicators rose a higher-than-expected 0.3 percent in May, boosted by rising stock prices, higher consumer expectations and the availability of jobs.
Economists said that jobs should continue to be plentiful, despite an unexpected surge in jobless claims last week.
The Labor Department reported Thursday that unemployment claims totaled 324,000 last week, up 10,000 from the previous week, to the highest level since mid-April.
While the big increase was unexpected, analysts said it did not change their view that the labor market remains hardy. Even with the increase, analysts noted claims remain close to their average — 319,000 — over the first 5 1/2 months of the year.
While the overall U.S. economy grew at a lackluster 0.6 percent in the first three months of this year, many analysts believe the pace has picked up significantly in the spring.
The Conference Board's upbeat report shows that the impact of the housing slump has been fairly contained so far, said Patrick Newport, an economist with Global Insight.
"It just hasn't spilled over to the rest of the economy," he said. It also indicates the economy is doing better than last month's leading indicators report suggested, Newport said.
May's increase reversed a revised 0.3 percent drop in April, down from the original 0.5 percent decline that economists blamed on soaring gas prices and a drop in building permits.
The report, designed to forecast economic activity over the next three to six months, tracks 10 economic indicators.
The advancing contributors in May, starting with the largest, were weekly unemployment insurance claims, stock prices, building permits, consumer expectations and vendor performance.
The negative contributors, beginning with the largest, were real money supply, average weekly manufacturing hours and interest rate spread.
With the latest report, the cumulative change in the index over the past six months has gone up 0.3 percent.
Wall Street is fairly confident that falling home prices and rising mortgage defaults won't damage the broader economy. Treasury Secretary Henry Paulson said Wednesday the housing slump is nearing an end and that the losses so far have been contained.
But if mortgage rates keep rising, fewer people will want to buy homes and fewer homeowners will be able to refinance. If that happens, the residential real estate market's troubles could snowball and dampen consumer spending.
The Federal Reserve's Open Market Committee, which sets short-term interest rates, meets next week and is widely expected to leave rates unchanged as they have been for about a year.
A pickup in the economy has raised worries about rising inflation, however.
Stocks rose on Thursday, after the Philadelphia Federal Reserve's report on manufacturing activity in its region jumped a stronger-than-expected 18 in June, up from 4.2 in May.
According to preliminary calculations, the Dow Jones industrial average rose 0.42 percent to 13,545.84 after dropping 146 points Wednesday.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 0.62 percent to 1,522.19 and the Nasdaq composite index advanced 0.65 percent to 2,616.96.
On Tuesday, the Commerce Department said construction of new homes fell in May as the nation's homebuilders were battered by the crisis in subprime lending and rising mortgage rates. Industry sentiment about the housing market fell in June to the lowest point in more than 16 years.
Secondary effects from the housing downturn like layoffs and restrained consumer spending could also start surfacing, said Aaron Smith, an economist with Moody's Economy.com. But the overall drag on the economy from the housing industry should decline in coming months, he said.
"Building permits cannot continue declining at the pace they have," Smith said.
The Conference Board said its index of leading economic indicators rose a higher-than-expected 0.3 percent in May, boosted by rising stock prices, higher consumer expectations and the availability of jobs.
Economists said that jobs should continue to be plentiful, despite an unexpected surge in jobless claims last week.
The Labor Department reported Thursday that unemployment claims totaled 324,000 last week, up 10,000 from the previous week, to the highest level since mid-April.
While the big increase was unexpected, analysts said it did not change their view that the labor market remains hardy. Even with the increase, analysts noted claims remain close to their average — 319,000 — over the first 5 1/2 months of the year.
While the overall U.S. economy grew at a lackluster 0.6 percent in the first three months of this year, many analysts believe the pace has picked up significantly in the spring.
The Conference Board's upbeat report shows that the impact of the housing slump has been fairly contained so far, said Patrick Newport, an economist with Global Insight.
"It just hasn't spilled over to the rest of the economy," he said. It also indicates the economy is doing better than last month's leading indicators report suggested, Newport said.
May's increase reversed a revised 0.3 percent drop in April, down from the original 0.5 percent decline that economists blamed on soaring gas prices and a drop in building permits.
The report, designed to forecast economic activity over the next three to six months, tracks 10 economic indicators.
The advancing contributors in May, starting with the largest, were weekly unemployment insurance claims, stock prices, building permits, consumer expectations and vendor performance.
The negative contributors, beginning with the largest, were real money supply, average weekly manufacturing hours and interest rate spread.
With the latest report, the cumulative change in the index over the past six months has gone up 0.3 percent.
Wall Street is fairly confident that falling home prices and rising mortgage defaults won't damage the broader economy. Treasury Secretary Henry Paulson said Wednesday the housing slump is nearing an end and that the losses so far have been contained.
But if mortgage rates keep rising, fewer people will want to buy homes and fewer homeowners will be able to refinance. If that happens, the residential real estate market's troubles could snowball and dampen consumer spending.
The Federal Reserve's Open Market Committee, which sets short-term interest rates, meets next week and is widely expected to leave rates unchanged as they have been for about a year.
A pickup in the economy has raised worries about rising inflation, however.
Stocks rose on Thursday, after the Philadelphia Federal Reserve's report on manufacturing activity in its region jumped a stronger-than-expected 18 in June, up from 4.2 in May.
According to preliminary calculations, the Dow Jones industrial average rose 0.42 percent to 13,545.84 after dropping 146 points Wednesday.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 0.62 percent to 1,522.19 and the Nasdaq composite index advanced 0.65 percent to 2,616.96.
On Tuesday, the Commerce Department said construction of new homes fell in May as the nation's homebuilders were battered by the crisis in subprime lending and rising mortgage rates. Industry sentiment about the housing market fell in June to the lowest point in more than 16 years.
Secondary effects from the housing downturn like layoffs and restrained consumer spending could also start surfacing, said Aaron Smith, an economist with Moody's Economy.com. But the overall drag on the economy from the housing industry should decline in coming months, he said.
"Building permits cannot continue declining at the pace they have," Smith said.
Friday, June 22, 2007
Rates on 30-year mortgages down
WASHINGTON - Rates on 30-year mortgages, after rising for five straight weeks, edged down slightly this week as investors digested news that suggested the economic drag from housing could last longer than expected.
Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.69 percent this week. That was down from 6.74 percent last week, when rates had jumped to the highest level in 11 months.
Analysts said the slight retreat occurred because financial markets saw two weak reports on housing as indications that troubles in the slumping sector are continuing to mount.
The government reported that construction of new homes and apartments fell by 2.1 percent in May, leaving building activity 24.2 percent below the level of a year ago, while the National Association of Home Builders said its index of builder sentiment in June fell to a 16-year low.
Builders have been slashing prices and offering other incentives to move a glut of unsold homes. Demand has been hurt by mounting troubles in the market for subprime mortgages, loans offered to borrowers with weak credit histories.
"Mortgage rates eased this week due to market concerns that the housing market will be a longer drag on the economy," said Frank Nothaft, Freddie Mac's chief economist.
The overall economy slowed to an anemic 0.6 percent growth rate in the first three months of this year, the weakest performance in more than four years, with housing one of the key factors depressing activity.
All mortgage rates tracked by Freddie Mac showed declines this week.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 6.37 percent, down from 6.43 percent last week.
Five-year adjustable-rate mortgages averaged 6.31 percent, down from 6.37 percent while one-year adjustable mortgages fell to 5.66 percent, down from 5.75 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.5 point. Five-year adjustable mortgages carried a fee of 0.6 point while one-year ARMs had a fee of 0.7 point.
A year ago, rates on 30-year mortgages stood at 6.71 percent, 15-year mortgages were at 6.36 percent, five-year adjustable-rate mortgages averaged 6.32 percent and one-year ARMs were at 5.75 percent.
Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.69 percent this week. That was down from 6.74 percent last week, when rates had jumped to the highest level in 11 months.
Analysts said the slight retreat occurred because financial markets saw two weak reports on housing as indications that troubles in the slumping sector are continuing to mount.
The government reported that construction of new homes and apartments fell by 2.1 percent in May, leaving building activity 24.2 percent below the level of a year ago, while the National Association of Home Builders said its index of builder sentiment in June fell to a 16-year low.
Builders have been slashing prices and offering other incentives to move a glut of unsold homes. Demand has been hurt by mounting troubles in the market for subprime mortgages, loans offered to borrowers with weak credit histories.
"Mortgage rates eased this week due to market concerns that the housing market will be a longer drag on the economy," said Frank Nothaft, Freddie Mac's chief economist.
The overall economy slowed to an anemic 0.6 percent growth rate in the first three months of this year, the weakest performance in more than four years, with housing one of the key factors depressing activity.
All mortgage rates tracked by Freddie Mac showed declines this week.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 6.37 percent, down from 6.43 percent last week.
Five-year adjustable-rate mortgages averaged 6.31 percent, down from 6.37 percent while one-year adjustable mortgages fell to 5.66 percent, down from 5.75 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.5 point. Five-year adjustable mortgages carried a fee of 0.6 point while one-year ARMs had a fee of 0.7 point.
A year ago, rates on 30-year mortgages stood at 6.71 percent, 15-year mortgages were at 6.36 percent, five-year adjustable-rate mortgages averaged 6.32 percent and one-year ARMs were at 5.75 percent.
Tuesday, June 05, 2007
Slower Market Dampens "Ugly" Home Business
HomeVestors of America, the company known for its “We Buy Ugly Houses” signs, is having a tough time as the market slows down — particularly in Florida, which used to be one of its best markets.
Some of the factors making its business more challenging: The sharp run-up in home prices in recent years, the lack of equity that owners have in many of the properties now for sale, and slack demand among homebuyers.
“This is temporary,” says John Hayes, chief executive officer of Dallas-based HomeVestors. "We're just riding through this transition with Florida."
The median resale price of an Orlando-area home was appreciating as much as 36 percent annually by mid-2005, before settling back to single digits by mid-2006 and turning negative in April for the first time in five years.
Some of the factors making its business more challenging: The sharp run-up in home prices in recent years, the lack of equity that owners have in many of the properties now for sale, and slack demand among homebuyers.
“This is temporary,” says John Hayes, chief executive officer of Dallas-based HomeVestors. "We're just riding through this transition with Florida."
The median resale price of an Orlando-area home was appreciating as much as 36 percent annually by mid-2005, before settling back to single digits by mid-2006 and turning negative in April for the first time in five years.
Tuesday, May 29, 2007
Setting the Stage for a Successful Sale
What's the best way to help your home make a glorious first impression on would-be buyers? Real estate experts agree that “staging” (also called “fluffing”) your home to show it in the most favorable light is well worth your time and effort.
Beyond the pre-sale cleaning and organizing you would expect to do, successful staging includes strategically arranging objects and furniture, adding decorative touches and more. Here are a few tips from the pros to help buyers make an immediate emotional connection with your home:
Add a pot of fresh blooming flowers to the entryway (yellow is a very welcoming color)
Open blinds to show off nice views. A vase on the window sill plays down less attractive views
Add throw pillows, a soft lap blanket, candles and a candy dish for a cozy living room
Use a soft bedspread, quilt, pillows and a throw rug to turn a bedroom into a relaxing retreat
Set your dining room table with dishes, placemats, wine glasses, etc.
Banish television sets, computers, kitchen and bathroom appliances from sight
Don't forget the garage! Make sure surfaces are clean and neat. Store tools and gardening products to make room for cars.
Whether you do the staging yourself or have your home fluffed by a professional, one Chicago-area expert confirms that homes that are staged often sell 75% faster and for 3%–6% higher than the asking price!
Beyond the pre-sale cleaning and organizing you would expect to do, successful staging includes strategically arranging objects and furniture, adding decorative touches and more. Here are a few tips from the pros to help buyers make an immediate emotional connection with your home:
Add a pot of fresh blooming flowers to the entryway (yellow is a very welcoming color)
Open blinds to show off nice views. A vase on the window sill plays down less attractive views
Add throw pillows, a soft lap blanket, candles and a candy dish for a cozy living room
Use a soft bedspread, quilt, pillows and a throw rug to turn a bedroom into a relaxing retreat
Set your dining room table with dishes, placemats, wine glasses, etc.
Banish television sets, computers, kitchen and bathroom appliances from sight
Don't forget the garage! Make sure surfaces are clean and neat. Store tools and gardening products to make room for cars.
Whether you do the staging yourself or have your home fluffed by a professional, one Chicago-area expert confirms that homes that are staged often sell 75% faster and for 3%–6% higher than the asking price!
Monday, May 21, 2007
Update to Predatory Lending Law
Update to Predatory Lending Law
From the Pioneer Press, May 15, 2007--A third section of the new predatory lending law was signed by Minnesota Gov. Tim Pawlenty this past Monday night. This latest regulatory crackdown comes as the Twin Cities area (along with the rest of the nation) endures a wave of home foreclosures thought to be caused, at least in part, by mortgage fraud. The new law goes into effect Aug. 1.
Under this latest addition, anyone who helps commit mortgage fraud (defined as knowingly misrepresenting or omitting important information in the lending process) commits a felony that is punishable by up to two years in prison. Violators also must pay restitution to their victims. Victims of dishonest mortgage lending or inflated home appraisals also will have the right to sue violators for damages and other costs – something that’s been nearly impossible in the past.
The previous parts of this bill were signed into law over the last month and include a section on requirements for becoming a mortgage broker, approved training hours, and a crackdown on the use of “no documentation” loans.
From the Pioneer Press, May 15, 2007--A third section of the new predatory lending law was signed by Minnesota Gov. Tim Pawlenty this past Monday night. This latest regulatory crackdown comes as the Twin Cities area (along with the rest of the nation) endures a wave of home foreclosures thought to be caused, at least in part, by mortgage fraud. The new law goes into effect Aug. 1.
Under this latest addition, anyone who helps commit mortgage fraud (defined as knowingly misrepresenting or omitting important information in the lending process) commits a felony that is punishable by up to two years in prison. Violators also must pay restitution to their victims. Victims of dishonest mortgage lending or inflated home appraisals also will have the right to sue violators for damages and other costs – something that’s been nearly impossible in the past.
The previous parts of this bill were signed into law over the last month and include a section on requirements for becoming a mortgage broker, approved training hours, and a crackdown on the use of “no documentation” loans.
Monday, May 14, 2007
Use a Buyer's Agent When Purchasing Your Home
Purchasing a home is a big step, and a big decision. The average person spends around 1/3 of their income on their home. The home that you choose has a big impact on your life, and can have a big impact on your finances, as well. It always surprises me when Buyers attempt to "go at it alone" because of the possibility of mistakes. A good Buyer's Agent is invaluable to a Buyer, and can be the difference between a wonderful transaction, and a nightmare.
Thursday, May 10, 2007
With apartments staging a big comeback as an investment class, even rundown "problem" buildings are becoming more desirable to would-be rehabilitators
With apartments staging a big comeback as an investment class, even rundown "problem" buildings are becoming more desirable to would-be rehabilitators, as the cooling of the condo craze boosts demand and rents for multihousing properties.
Monday, May 07, 2007
Rosemount: 290-Acre Development Proposal Seeks Several Private Streets
Acron's development proposal raises questions. Some Rosemount City Council members raised the question of public vs. private streets as they reviewed Arcon Development's proposal, east of the Bloomfield neighborhood. The issue was only one of a few discussion points regarding the 735 housing units, which includes a new location for District 917, and 50 acres of commercial land along County Road 42 on both sides of Akron Avenue.
Tuesday, May 01, 2007
St. Paul: Stepping Up Effort To Remove Blighted Homes
St. Paul: Stepping Up Effort To Remove Blighted Homes
St Paul has removed 11 blighted and unsafe homes so far this year, and many more demolitions are on the way. Neighbors on Jessamine Ave. are cheering the move in one North End neighborhood but some housing advocates are saying the city should not be tearing down homes in affordable housing neighborhoods. Says neighbor Linda Clark as she watched from across the street, "I'm glad they're getting rid of these abandoned houses. Put something nice where people want to live." In February Mayor Chris Coleman announced "Invest St. Paul", a broad, multimilliion-dollar neighborhood revitalization program focusing on Frogtown, Dayton's Bluff, the North End and the East Side
St Paul has removed 11 blighted and unsafe homes so far this year, and many more demolitions are on the way. Neighbors on Jessamine Ave. are cheering the move in one North End neighborhood but some housing advocates are saying the city should not be tearing down homes in affordable housing neighborhoods. Says neighbor Linda Clark as she watched from across the street, "I'm glad they're getting rid of these abandoned houses. Put something nice where people want to live." In February Mayor Chris Coleman announced "Invest St. Paul", a broad, multimilliion-dollar neighborhood revitalization program focusing on Frogtown, Dayton's Bluff, the North End and the East Side
Monday, April 23, 2007
St. Paul: Old Jail Site On Riverfront To Be Marketed Nationally
St. Paul: Old Jail Site On Riverfront To Be Marketed Nationally
Some of the most prime riverfront real estate in St. Paul is about to hit the national marketplace. County officials have hired a national real estate broker, United Properties, which is based in the Twin cities--to market the property. "We'll reach 2,500 to 3,000 investors and developers around the country with one push of a button," said Jolly Mangine the county's property manager. The county will pay United $75,000 to market the 6-acre site, handle inquiries and sort offers
Some of the most prime riverfront real estate in St. Paul is about to hit the national marketplace. County officials have hired a national real estate broker, United Properties, which is based in the Twin cities--to market the property. "We'll reach 2,500 to 3,000 investors and developers around the country with one push of a button," said Jolly Mangine the county's property manager. The county will pay United $75,000 to market the 6-acre site, handle inquiries and sort offers
Wednesday, April 18, 2007
Bright Outlook for Housing Market Activity Revealed; Number of Unsold Homes Declining
Bright Outlook for Housing Market Activity Revealed; Number of Unsold Homes Declining
From RIS Media, April 6, 2007--Overall housing market indicators improved substantially in many areas of the country during the first quarter of 2007 despite the concern over subprime mortgage lending problems and a rise in foreclosures, according to results from the latest HouseHunt "Current Market Conditions" national survey of member agents. Inventories of unsold homes are trending downward; annual positive price appreciation is up; buyer-seller ratios are more balanced; average time on the market from listing to sale is improving; and more home sellers say they are getting 95-100 percent of asking prices.
From RIS Media, April 6, 2007--Overall housing market indicators improved substantially in many areas of the country during the first quarter of 2007 despite the concern over subprime mortgage lending problems and a rise in foreclosures, according to results from the latest HouseHunt "Current Market Conditions" national survey of member agents. Inventories of unsold homes are trending downward; annual positive price appreciation is up; buyer-seller ratios are more balanced; average time on the market from listing to sale is improving; and more home sellers say they are getting 95-100 percent of asking prices.
Monday, April 16, 2007
Twin Cities: McMansions Face A Tough Sell
Toll Brothers, the nation's biggest luxury home developer, extended its empire to this area with a burst of optimism two years ago. Now, eight months after the first home sales at Steeplechase of Eagan, the Pennsylvania company finds itself caught in a tough period locally for high-end sales. The metro area has an oversupply of high-end homes, judging by the time they spend on the market. The figure for homes costing $1 million and more has risen from 13 months a year ago to 19 months today. For homes valued from $500-$1 million, supply rose from eight months to eleven.
Monday, April 09, 2007
Minneapolis: Jackson Square Condos Are Unique Project
Minneapolis: Jackson Square Condos Are Unique Project
Smaller neighborhood-scale condo projects with unique locations are still finding favor among developers, when larger projects have slowed. The 46-unit project planned for the Edison High School area, has gotten approval from the Minneapolis Planning Commission to proceed. Niles Schulz of St. Paul-based Dolphin Development will replace a pair of blighted houses on two city-owned vacant lots. The condos will range in price from $180,000, a segment of the market that's still attracting buyers will says Schulz, will reflect the ethnically diverse makeup of the neighborhood.
Smaller neighborhood-scale condo projects with unique locations are still finding favor among developers, when larger projects have slowed. The 46-unit project planned for the Edison High School area, has gotten approval from the Minneapolis Planning Commission to proceed. Niles Schulz of St. Paul-based Dolphin Development will replace a pair of blighted houses on two city-owned vacant lots. The condos will range in price from $180,000, a segment of the market that's still attracting buyers will says Schulz, will reflect the ethnically diverse makeup of the neighborhood.
Tuesday, April 03, 2007
Anoka County: City Blocks Sale Of Land To DNR To Save It For Homes
Anoka County: City Blocks Sale Of Land To DNR To Save It For Homes
The fate of an ecologically rare piece of land in the city of Columbus has taken some surprising turns. The owners of the 160-acre parcel planned to sell their land to the DNR and have it acquired into the Carlos Avery Wildlife Management area. But the city of Columbus and then Anoka County voted not to allow the sale to avoid a loss of the potential tax revenue of building homes.
The fate of an ecologically rare piece of land in the city of Columbus has taken some surprising turns. The owners of the 160-acre parcel planned to sell their land to the DNR and have it acquired into the Carlos Avery Wildlife Management area. But the city of Columbus and then Anoka County voted not to allow the sale to avoid a loss of the potential tax revenue of building homes.
Thursday, March 29, 2007
Existing Home Sales Creep Up - Prices Fall
Existing Home Sales Creep Up - Prices Fall
According to the latest data from the National Association of Realtors, existing-home sales continued to recover last following the trend started in October. However, home values continued to fall and were 3.1% lower than the same time one year earlier.
According to the latest data from the National Association of Realtors, existing-home sales continued to recover last following the trend started in October. However, home values continued to fall and were 3.1% lower than the same time one year earlier.
Monday, March 26, 2007
TOP-TEN SMALL TOWNS OFFER AFFORDABILITY, JOBS
Cities such as New York, San Francisco and Los Angeles might be great places to
jump-start a career, but their high cost of living can break the bank for many grads and young families. Some of the best places to live and work, however, may be smaller so-called flyover cities. Here's a top-ten list of affordable small towns where the cost of living and unemployment are low, and the number of jobs is growing steadily. Topping the list? Fayetteville-Springdale-Rogers, Arkansas-Missouri. Also on the list are: Idaho Falls, Idaho; Logan, Utah; Auburn-Opelika, Alabama; Iowa City, Iowa; Dubuque, Iowa; Pensacola-Ferry Pass-Brent, Florida; Blacksburg-Christiansburg-Radford, Virginia; Huntsville, Alabama; Fargo, North Dakota. (Source: MSNRealEstate)
jump-start a career, but their high cost of living can break the bank for many grads and young families. Some of the best places to live and work, however, may be smaller so-called flyover cities. Here's a top-ten list of affordable small towns where the cost of living and unemployment are low, and the number of jobs is growing steadily. Topping the list? Fayetteville-Springdale-Rogers, Arkansas-Missouri. Also on the list are: Idaho Falls, Idaho; Logan, Utah; Auburn-Opelika, Alabama; Iowa City, Iowa; Dubuque, Iowa; Pensacola-Ferry Pass-Brent, Florida; Blacksburg-Christiansburg-Radford, Virginia; Huntsville, Alabama; Fargo, North Dakota. (Source: MSNRealEstate)
Wednesday, March 21, 2007
Market Watch
WASHINGTON, D.C. (MCT) - A recovery in the nation's housing market is "likely" this year, though problems in the subprime lending marketplace and unusual weather have posed challenges in assessing conditions, according to a Tuesday forecast from the National Association of Realtors.
Total sales this year will be "fairly close" to the prior year because "last year started high and ended low," said David Lereah, NAR's chief economist, in a statement.
Existing-home sales for 2007 are projected at 6.42 million, improving to 6.66 million in 2008. These figures compare with a total of 6.48 million existing homes sold last year.
"Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next," Lereah said.
Lereah said winter storms last month, the coldest February since 1979, "brought markets to a halt" in much of the country, adding that sales should be dragged down in March. There may not be an upturn in closed transactions before May 25, when NAR is scheduled to report sales for April.
"Lending problems in our nation's subprime marketplace are building, which could inhibit future housing activity and further dampen our forecast," Lereah said. "Even so, these problems are likely to be contained and not spill over into the prime mortgage market."
There will be "some additional pain" in the new-home market, though existing-home sales are expected to "slowly improve" from a cyclical low last fall, Lereah said. NAR now forecasts new-home sales at 950,000 in 2007, followed by 981,000 next year. A total of 1.06 million new homes were sold in 2006.
The national median existing-home price is projected to rise 1.2 percent to $224,500 this year, higher than the 1 percent gain seen in 2006, according to NAR.
The median new-home price should grow 1.7 percent to $249,600 in 2007, following on a 1.9 percent increase last year, according to NAR.
As for 2008, NAR expects existing-home prices to rise 3.1 percent and new-home prices to grow 3 percent.
Total sales this year will be "fairly close" to the prior year because "last year started high and ended low," said David Lereah, NAR's chief economist, in a statement.
Existing-home sales for 2007 are projected at 6.42 million, improving to 6.66 million in 2008. These figures compare with a total of 6.48 million existing homes sold last year.
"Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next," Lereah said.
Lereah said winter storms last month, the coldest February since 1979, "brought markets to a halt" in much of the country, adding that sales should be dragged down in March. There may not be an upturn in closed transactions before May 25, when NAR is scheduled to report sales for April.
"Lending problems in our nation's subprime marketplace are building, which could inhibit future housing activity and further dampen our forecast," Lereah said. "Even so, these problems are likely to be contained and not spill over into the prime mortgage market."
There will be "some additional pain" in the new-home market, though existing-home sales are expected to "slowly improve" from a cyclical low last fall, Lereah said. NAR now forecasts new-home sales at 950,000 in 2007, followed by 981,000 next year. A total of 1.06 million new homes were sold in 2006.
The national median existing-home price is projected to rise 1.2 percent to $224,500 this year, higher than the 1 percent gain seen in 2006, according to NAR.
The median new-home price should grow 1.7 percent to $249,600 in 2007, following on a 1.9 percent increase last year, according to NAR.
As for 2008, NAR expects existing-home prices to rise 3.1 percent and new-home prices to grow 3 percent.
Thursday, March 15, 2007
Top 7 Reasons to Use a Buyer's Agent When Purchasing Your Home
Purchasing a home is a big step, and a big decision. The average person spends around 1/3 of their income on their home. The home that you choose has a big impact on your life, and can have a big impact on your finances, as well. It always surprises me when Buyers attempt to "go at it alone" because of the possibility of mistakes. A good Buyer's Agent is invaluable to a Buyer, and can be the difference between a wonderful transaction, and a nightmare.
1) Full Access to the MLS
The Multiple Listing Service (MLS) is a powerful tool that only Realtors have access to. When listing agents market a home for sale, they typically allow any Realtor to present the home to potential buyers, and to present contracts for purchase. The MLS is a database of all homes listed by Realtors, and represents roughly 99% of the homes for sale in any given market. As technology advances, so does the MLS. It has evolved into an extremely powerful search engine that allows your buyer's agent to enter in search criteria, and returns only homes that match those specific parameters. Buyers can find a lot of this information online through IDX feeds available on many websites, but this information is a "watered down" version of the MLS because the IDX search engines aren't quite as powerful, and don't return as detailed profiles as the MLS.
2) Maximize Your Time
While driving neighborhoods is an excellent idea to help you decide which locations you prefer, it's not a very efficient way to find your new home. Gas is expensive, and your time is valuable. Your Buyer's Agent will listen to your needs, make fantastic suggestions based on your likes & dislikes, and provide you with a list of homes that ALL match your wants & needs. Your Buyer's Agent has helped MANY new homebuyers through MANY purchases, and will help you better organize your search & decision making process – saving you valuable time.
3) Representation
Listing Agents enter into legally binding agreements that require them to ALWAYS act in the best interest of the seller. They are the seller's "coach" and will make sure that their clients' best interests are looked after. Luckily, your Buyer's Agent is there to make sure YOUR best interests are accounted for. With your expert Buyer's Agent in your corner, you can rest assured that you're on, at least, even ground with the home seller. A football team would be at a pretty significant disadvantage without a coach – just as you would be without a Buyer's Agent.
4) Negotiating Power
The MLS maintains a record of, not only all homes listed by Realtors in a given market, but also the sales price of those homes. Your Buyer's Agent will run a Comparative Market Analysis (CMA) to determine a prospective home's Fair Market Value (FMV). In simpler terms, your Realtor will look at similar homes in the same neighborhood that have sold recently. This way, you will know whether or not the seller has their home priced fairly. If the home is priced over Fair Market Value, your Buyer's Agent can present your "under asking price" offer with plenty of firepower – and a greater chance that the offer will be accepted.
5) Experience
The average person buys 3-5 homes in their lifetime. A good Buyer's Agent will assist in 3-5 home purchases every month. What might seem complicated and intimidating to you is fairly common and familiar to your Realtor. Your Buyer's Agent will know what to expect, and will know when to alert you if anything out of the ordinary occurs.
6) Industry Contacts
It takes a lot of people to close a real estate transaction – Buyer's Agent, Listing Agent, Loan Officer, Inspector, Appraiser, Insurance Agent, General Contractors, and sometimes more! A good agent will come with a strong closing team that has performed in the past, and will continue to perform. A transaction is only as strong as its weakest link – with your strong Buyer's Agent & their closing team, you can rest assured that you will have plenty of support.
7) Piece of Mind
If you are like most people, your home is the largest purchase you will ever make. The average person spends around 1/3 of their total monthly income on their home. This is a big decision and you don't want to go at it alone. When you use a trusted Buyer's Agent, you know that your best interests are accounted for, and that you can feel confident in your purchase.
Purchasing a home can be a fun and exciting process. However, the home buying process can be intimidating, and mistakes are possible. A Realtor who specializes in working with Buyers can help alleviate the fears & possibilities for mistakes. Make sure and use a Buyer's Agent on any real estate transaction, and you will help ensure that you are making the right decisions.
1) Full Access to the MLS
The Multiple Listing Service (MLS) is a powerful tool that only Realtors have access to. When listing agents market a home for sale, they typically allow any Realtor to present the home to potential buyers, and to present contracts for purchase. The MLS is a database of all homes listed by Realtors, and represents roughly 99% of the homes for sale in any given market. As technology advances, so does the MLS. It has evolved into an extremely powerful search engine that allows your buyer's agent to enter in search criteria, and returns only homes that match those specific parameters. Buyers can find a lot of this information online through IDX feeds available on many websites, but this information is a "watered down" version of the MLS because the IDX search engines aren't quite as powerful, and don't return as detailed profiles as the MLS.
2) Maximize Your Time
While driving neighborhoods is an excellent idea to help you decide which locations you prefer, it's not a very efficient way to find your new home. Gas is expensive, and your time is valuable. Your Buyer's Agent will listen to your needs, make fantastic suggestions based on your likes & dislikes, and provide you with a list of homes that ALL match your wants & needs. Your Buyer's Agent has helped MANY new homebuyers through MANY purchases, and will help you better organize your search & decision making process – saving you valuable time.
3) Representation
Listing Agents enter into legally binding agreements that require them to ALWAYS act in the best interest of the seller. They are the seller's "coach" and will make sure that their clients' best interests are looked after. Luckily, your Buyer's Agent is there to make sure YOUR best interests are accounted for. With your expert Buyer's Agent in your corner, you can rest assured that you're on, at least, even ground with the home seller. A football team would be at a pretty significant disadvantage without a coach – just as you would be without a Buyer's Agent.
4) Negotiating Power
The MLS maintains a record of, not only all homes listed by Realtors in a given market, but also the sales price of those homes. Your Buyer's Agent will run a Comparative Market Analysis (CMA) to determine a prospective home's Fair Market Value (FMV). In simpler terms, your Realtor will look at similar homes in the same neighborhood that have sold recently. This way, you will know whether or not the seller has their home priced fairly. If the home is priced over Fair Market Value, your Buyer's Agent can present your "under asking price" offer with plenty of firepower – and a greater chance that the offer will be accepted.
5) Experience
The average person buys 3-5 homes in their lifetime. A good Buyer's Agent will assist in 3-5 home purchases every month. What might seem complicated and intimidating to you is fairly common and familiar to your Realtor. Your Buyer's Agent will know what to expect, and will know when to alert you if anything out of the ordinary occurs.
6) Industry Contacts
It takes a lot of people to close a real estate transaction – Buyer's Agent, Listing Agent, Loan Officer, Inspector, Appraiser, Insurance Agent, General Contractors, and sometimes more! A good agent will come with a strong closing team that has performed in the past, and will continue to perform. A transaction is only as strong as its weakest link – with your strong Buyer's Agent & their closing team, you can rest assured that you will have plenty of support.
7) Piece of Mind
If you are like most people, your home is the largest purchase you will ever make. The average person spends around 1/3 of their total monthly income on their home. This is a big decision and you don't want to go at it alone. When you use a trusted Buyer's Agent, you know that your best interests are accounted for, and that you can feel confident in your purchase.
Purchasing a home can be a fun and exciting process. However, the home buying process can be intimidating, and mistakes are possible. A Realtor who specializes in working with Buyers can help alleviate the fears & possibilities for mistakes. Make sure and use a Buyer's Agent on any real estate transaction, and you will help ensure that you are making the right decisions.
Tuesday, March 13, 2007
Nation: Mortgage Applications Hit Two-Month High
With interest rates falling, the number of mortgage applications rose 7.3 percent on a seasonally adjusted basis in the week ending March 2. Application volumes last week rose about 16 percent from the same week a year ago, reported by the Mortgage Bankers Association. The number of applications for loans to buy homes rose 1 percent on a week-to-week basis and about 2 percent from a year ago. Although foreclosure rates are driving some lenders out of business, applications for loans to refinance existing mortgages increased 15 percent to the highest level seen in 12 weeks. Refinancing loans were up about 38 percent compared with this time last year. the average rate for 30-year fixed-rate loans dropped to 6.04 percent--the lowest rate in 11 weeks. The rate for 15-year fixed- averaged 5.73 percent, the lowest in 13 weeks. The Mortgage Bankers Association covers about half of all mortgages in the US.
Monday, March 05, 2007
St. Paul: West Side Happenings
A developer wants to add a a riverfront development of condos and shops to one of the most distinct and ethnically rich neighborhoods in St. Paul. The plans for The Bridges of St. Paul however are not without controversy. With points of contention including scale and financing, The Bridges is just part of the continuing development and revitalization taking hold in this historic neighborhood. Reservations are being taken for another development, the West Side Flats condo project. The condos will offer front-door access to Harriet Island Regional Park and views across Raspberry Island to the St. Paul skyline. Away from the riverfront is the renaissance of District Del Sol, an area in the heart of the West Side that includes restaurants, shops and the district's icon, El Burrito Mercado, a marketplace that draws shoppers from across the Twin Cities.
Monday, February 26, 2007
Nation: Mortgage Rates Hit 6-Week Low!
Rates on 30-year mortgages fell this week to the lowest level in six weeks. Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.22 percent this week compared to 6.30 last week. The decline was only the second since early December. It pushed rates to the lowest level since the 6.21 rate of the week of Jan. 11. One year ago, rates on 30-year mortgages stood at 6.26 percent.
Monday, February 19, 2007
Homebuilder confidence jumps
NEW YORK (Reuters) -- Homebuilders' confidence rose in February to its highest level since June 2006 as low mortgage rates and sales incentives helped boost demand, the National Association of Home Builders said Thursday.
The NAHB/Wells Fargo Housing Market Index jumped to 40 from 35 in January, its highest reading since hitting 42 in June 2006, the group said. The index has also rebounded from a 15-year low of 30 notched in September 2006.
Economists polled by Reuters had forecast the index to be unchanged. Readings below 50 indicate more builders view their market conditions as poor rather than favorable.
"The ... results are consistent with Federal Reserve Chairman Ben Bernanke's assessment to Congress this week that there are signs of stabilization on the demand side of the housing market," said David Seiders, chief economist at NAHB.
To read all of the story click the link in the title, and be sure to to come to us for all your Real Estate Needs!
The NAHB/Wells Fargo Housing Market Index jumped to 40 from 35 in January, its highest reading since hitting 42 in June 2006, the group said. The index has also rebounded from a 15-year low of 30 notched in September 2006.
Economists polled by Reuters had forecast the index to be unchanged. Readings below 50 indicate more builders view their market conditions as poor rather than favorable.
"The ... results are consistent with Federal Reserve Chairman Ben Bernanke's assessment to Congress this week that there are signs of stabilization on the demand side of the housing market," said David Seiders, chief economist at NAHB.
To read all of the story click the link in the title, and be sure to to come to us for all your Real Estate Needs!
Tuesday, February 13, 2007
Real Estate Remains The Best Investment Available.
The average home purchased five years ago has appreciated 49%. Even with the recent 2.2%decline in the median home price, this still equates to a more than 45% return on investment for the average homeowner. Media reports of a vast market decline are deceiving, and consumers will benefit from purchasing a home now before prices begin to rise once again.
According to Forbes magazine(using U.S. Department of Housing and Urban Development statistics), U.S. real estate sale prices increased more than 56% from the beginning of 1999 to the end of 2004. The S&P 500 index dipped nearly 6% during the same period.
While year -to-year fluctuations are normal, real estate remains one of the best performing and consistent long-term investments. Median existing U.S. home sale prices have increased on average 6.5% each year from 1972 through 2005, and 88.5% over the last 10 years combined. For consumers looking for long-term and stable growth rates, real estate is still their number one choice.
According to Forbes magazine(using U.S. Department of Housing and Urban Development statistics), U.S. real estate sale prices increased more than 56% from the beginning of 1999 to the end of 2004. The S&P 500 index dipped nearly 6% during the same period.
While year -to-year fluctuations are normal, real estate remains one of the best performing and consistent long-term investments. Median existing U.S. home sale prices have increased on average 6.5% each year from 1972 through 2005, and 88.5% over the last 10 years combined. For consumers looking for long-term and stable growth rates, real estate is still their number one choice.
Friday, February 09, 2007
Existing-Home Sales To Improve, With Later Recovery For New Homes
February 07, 2007 -
Consumers are beginning to respond to more favorable housing market conditions, but new home construction will be dampened until inventories decline further, according to the latest forecast by the National Association of Realtors®.
David Lereah, NAR’s chief economist, is looking for a steady rise in existing-home sales. “After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008,” he said. “New-home sales should continue to slide, but we look for that sector to turn around later in the year. When you put it all together, home sales may appear weak in comparison with the record surge in 2005, but they will be sustained at historically high levels that are in line with long-term demand.”
Existing-home sales, after reaching the third highest total on record, 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million next year. New-home sales, following a fourth-best 1.06 million in 2006, are projected to decline to 961,000 this year and then rise to 971,000 in 2008.
Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. “When new home demand begins to catch up with supply, builders will slowly increase construction – probably in the second half of this year,” Lereah said.
The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. “Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions,” Lereah said. “When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.”
The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new-home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation-adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.
Consumers are beginning to respond to more favorable housing market conditions, but new home construction will be dampened until inventories decline further, according to the latest forecast by the National Association of Realtors®.
David Lereah, NAR’s chief economist, is looking for a steady rise in existing-home sales. “After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008,” he said. “New-home sales should continue to slide, but we look for that sector to turn around later in the year. When you put it all together, home sales may appear weak in comparison with the record surge in 2005, but they will be sustained at historically high levels that are in line with long-term demand.”
Existing-home sales, after reaching the third highest total on record, 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million next year. New-home sales, following a fourth-best 1.06 million in 2006, are projected to decline to 961,000 this year and then rise to 971,000 in 2008.
Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. “When new home demand begins to catch up with supply, builders will slowly increase construction – probably in the second half of this year,” Lereah said.
The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. “Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions,” Lereah said. “When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.”
The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new-home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation-adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.
Monday, February 05, 2007
Minneapolis: Should Historic Alley Block $200 Million Development?
Minneapolis: Should Historic Alley Block $200 Million Development?
City officials and developers debated that question in a recent hearing on the Pacific Condo/Hotel project proposed for the 200 block of Washington Avenue. Project consultants said they did not realize construction of a parking ramp over an alley would even be a point of contention. "The alley is not a core feature of the Warehouse District," Historian Charlene Roise told the Heritage Preservation Commission, referring to the alley next to the Monte Carlo Building. Heritage Preservation and Zoning & Planning commissioners disagreed, voting that elimination of the 150-year old alley would negatively impact building bulk and scale, ultimately hurting the historic character of the neighborhood.
City officials and developers debated that question in a recent hearing on the Pacific Condo/Hotel project proposed for the 200 block of Washington Avenue. Project consultants said they did not realize construction of a parking ramp over an alley would even be a point of contention. "The alley is not a core feature of the Warehouse District," Historian Charlene Roise told the Heritage Preservation Commission, referring to the alley next to the Monte Carlo Building. Heritage Preservation and Zoning & Planning commissioners disagreed, voting that elimination of the 150-year old alley would negatively impact building bulk and scale, ultimately hurting the historic character of the neighborhood.
Monday, January 29, 2007
Nation: Why Women Pay More For Mortgages
Women are 32 percent more likely to carry mortgages with high interest rates than men with similar incomes, even though women generally have better credit scores, according to a study released recently by the Consumer Federation of America.
The study also found that wealthier women were 50 percent more likely to carry expensive loans than their male counterparts. In 2005, 10 percent of women who took out mortgages received the highest-cost sub-prime loans, compared with about 7.5 percent of men.
Why do women pay more? Allen Fishbein, the federation’s director of housing and credit policy, speculates that the most likely reason for the disparity was that women were less familiar with the mortgage market than men and didn’t shop around.
''There is some research indicating that women are, on the whole, less likely than men to bargain for major consumer purchases and credit transactions,'' he says.
The study also found that wealthier women were 50 percent more likely to carry expensive loans than their male counterparts. In 2005, 10 percent of women who took out mortgages received the highest-cost sub-prime loans, compared with about 7.5 percent of men.
Why do women pay more? Allen Fishbein, the federation’s director of housing and credit policy, speculates that the most likely reason for the disparity was that women were less familiar with the mortgage market than men and didn’t shop around.
''There is some research indicating that women are, on the whole, less likely than men to bargain for major consumer purchases and credit transactions,'' he says.
Thursday, January 11, 2007
A Matter of Timing
Buying real estate can sometimes involve tricky timing. For example, you
may have found the perfect house and are thinking about making an offer,
but are feeling pressured to make a decision just when you want time to
consider the matter. The agent tells you that another party is thinking
about making an offer, so you shouldn't hesitate if you really want the
house. What should you do? Trust your agent!
It is natural to feel some pressure from even the most easy-going real
estate agent--and some uncertainty about making an offer. If you really
like a house, there is always the possibility that someone else will
share your enthusiasm for it. Whether your local market is active or
sluggish, it is sensible to assume that another offer is likely to come
in. Perhaps you can afford to "sleep on it", but moving as quickly as
possible will minimize the possibility that the house will go to another
buyer.
may have found the perfect house and are thinking about making an offer,
but are feeling pressured to make a decision just when you want time to
consider the matter. The agent tells you that another party is thinking
about making an offer, so you shouldn't hesitate if you really want the
house. What should you do? Trust your agent!
It is natural to feel some pressure from even the most easy-going real
estate agent--and some uncertainty about making an offer. If you really
like a house, there is always the possibility that someone else will
share your enthusiasm for it. Whether your local market is active or
sluggish, it is sensible to assume that another offer is likely to come
in. Perhaps you can afford to "sleep on it", but moving as quickly as
possible will minimize the possibility that the house will go to another
buyer.
Monday, January 08, 2007
Nation: Housing Expected To Rebound But Some Markets Will Feel Pain
Economists expect the housing market to rebound in 2007 for most of the nation. "We may be bottoming out on the sales side," says David Lereah, chief economist for the NAR. Sellers are being a lot more flexible he says and lower prices are bringing some buyers back into the market. Home builders have cut back on production of new houses which will "make for a much healthier market going forward". Lereah predicts the housing market will grow in three-fourths of the country in 2007. Markets in the rest of the country, including California and coastal resort areas from Delaware to Florida--"are going to experience some pain".
Friday, January 05, 2007
Do'a and Don'ts of home decorating
Hello friends!
We hope you have had a safe and fun year! We are looking forward to what the New Year brings! We hope this year to work with you on your buying or selling your home!
With any market conditions decorating your home can help or harm you. This great story gives some helpful tips for your home decorating! Just click the link above. We hope you all have a great New Year!
We hope you have had a safe and fun year! We are looking forward to what the New Year brings! We hope this year to work with you on your buying or selling your home!
With any market conditions decorating your home can help or harm you. This great story gives some helpful tips for your home decorating! Just click the link above. We hope you all have a great New Year!
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