The Singhal Team Real Estate Blog

Taxes, Incentives and Credits, Oh My!

2010-03-30T19:15:00.003-06:00

Owning a home is its own reward, but homeownership can also bring rewards at tax time.

This year is especially beneficial for people who are in the market to buy a home, thanks to the
$8,000 first-time buyer credit and the $6,500 tax credit for repeat buyers.

Current homeowners can benefit, as well. Tax credits are available for owners who undertake certain projects to improve the energy efficiency of their home, including replacing exterior windows, skylights and doors and installing efficient heating and air conditioning systems.
Certain home improvements may qualify for as much as 30 percent of the project cost, up to $1,500.

Homeowners also enjoy a mortgage interest deduction; allowing them to deduct all the interest paid on up to $1 million in mortgage debt.

Article taken from NAR, "Home Delivery"

Crunch Time

2010-03-15T11:48:00.003-06:00

The time is coming near...the first time home buyer tax credit is coming to an end on April 30th. So if you qualify as a first time home buyer...BUY NOW!!! Now is the best time to buy a home, because the rates are at an all time low and the home prices are at it's lowest...since...forever. No where else in the world would someone pay you to purchase a home. Right now, The United States will pay you to buy a home, not many times in life can you say that.

Take advantage of the tax credit and buy a home today.

Here's what you need to do:

1. Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract by April 30, 2010 and close by July 1, 2010.
2. Decide whether to: apply the credit to your 2009 tax return, filed on or before April 15, 2010;
file an amended 2009 return; or, apply the credit on your 2010 return, filed on or before April 15, 2011.
3. Attach documentation of purchase to your return.

Will Short Sale be easier?

2010-03-12T12:59:00.002-06:00

Most buyers when they see a short sale home, they either think that they are going to get a good deal or look the other way. Most buyers are looking the other way because short sales tend to take some time before it closes, ranging from two months to as long as ONE year waiting for the third party approval, the bank. Most buyers lose interest quick, especially if they are first time buyers hoping to take advantage of the First Time Homebuyer Tax Credit. However, the government are going to implement some new policy to streamline the process.

"On April 5, 2010, the U.S. government will implement the Home Affordable Foreclosure Alternatives Program. Part of the Home Affordable Modification Program, HAFA helps homeowners who are unable to retain their home under HAMP by simplifying and streamlining the use of short sales and deeds-in-lieu of foreclosures. Homeowners must meet certain requirements to participate and incentive payments are provided to homeowners and servicers."

Now when buyers are looking at short sale homes, lets hope they will be more reluctant to look and purchase the home.

First Time Homebuyer Tax Credit Extended and Expanded

2009-11-20T18:29:00.004-06:00

On November 6, 2009, President Obama signed a bill into law that immediately extended the popular tax credit program offering up to $8,000 for qualified first-time homebuyers (FTHBs) into the first half of 2010.

The bill also instantly expanded the program, offering up to $6,500 in tax credits for qualified repeat home buyers, swinging open the door for even more qualified homebuyers to take advantage of this valuable opportunity at a time when mortgage rates are still near historical lows.

First-Time Buyers: For FTHBs (defined as someone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title), the basic rules remain the same, with one important exception – higher income limits are now in place, increasing the pool of potential buyers eligible for the tax credit of up to 10% of the purchase price or up to $8,000. This is money that does not have to be repaid as long you stay in your new home for at least 36 months.

Single tax filers who earn up to $125,000 are now eligible for the total credit amount. Those who earn more than this cap (but less than $145,000) can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap (but less than $245,000) can receive a partial credit.

Repeat Buyers: The new homebuyer program offers an exciting new opportunity missing from the previous incentives – a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. This gives those who already own a qualifying residence some additional reasons to take advantage of lower home prices and interest rates and finally move up to the home of their dreams.

Important Deadlines: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.Get the FactsThere are other important rules and guidelines you must meet to qualify for this great opportunity. So, if you or someone you know has missed out on the first two home buyer tax credit programs in the last two years, don't wait.

Article Courtesy of Homes and Money Quaterly News

Benefits of a Short Sale for Lenders

2009-11-16T22:31:00.000-06:00

A short sale can save lenders lots of time and money. It is estimated that for each house that goes into foreclosure the bank is spending around $50000+/-. When the lenders decide to sell a property on a short sale, the litigation and foreclosure proceeding are skipped and the cost of holding the property is shorten. When a property falls into foreclosure, the lenders have to find asset managers and real estate brokers to list and sell their properties. In a short sale the lenders do not have to find asset managers and real estate brokers to sell and list their properties. The process is cut down and although it looks like the lenders are losing money up front, they actually will be saving more money by selling a property early before foreclosure.

The most difficult part in a short sale is getting the approval from the lender, because they are usually bombarded by multiple files and don’t have the adequate staff to manage all their files. It will take some time but most lenders will come to terms with an offer and will usually accept the lesser amount owed. In the long run, lenders know that they will benefit more from the short sale.

Benefits of a Short Sale for Seller's

2009-11-11T12:38:00.000-06:00

There are numerous benefits to the sellers, some benefits include:

Won’t affect credit score as much as a foreclosure. When the seller’s only option is to sell a short and not got into foreclosure their credit score is effective as much as a foreclosure. Most seller’s who sell their home as a short sales can regain a good credit standing within 2 years where as a foreclosure your credit can be damage for up to 7 years.

No deficiency judgment. In most cases the banks will not have a deficiency judgment for the seller’s after a sale. The loan is satisfied and recorded as that.

Live in home. As a seller you can still stay in your home until the sale of your home. In a foreclosure the lender will order the sheriff to evict a person out of their home. If a homeowner has missed a payment and believe they have run into a hardship and are unable to work out anything with their lenders, seek a real estate professional trained in managing and selling short sale homes so their homes can be sold in a timely matter before they fall into foreclosure.

Morally correct. Most individuals want to be able to stay in their home and pay for their mortgage but hard times are upon them so they are unable to make the payments. If they can pay for the bills, they would.

Short sales are not easy transactions and everyone involved with a short sale should have patience and understanding of the process and educate their clients about the process. When there is better understanding of the process, all parties will benefit from the outcome.

Benefits of a Short Sale

2009-11-04T20:18:00.003-06:00

I encourage all people falling behind on their mortgage to always first speak and try to work with their lender to see if they will allow a loan modification or provide other options so that a homeowner can keep their home. If the bank’s options are not favorable to the homeowner and they cannot afford the payments and their home is worth less than owed, the next best thing is to sell the home in a short sale instead of letting go into foreclosure.

There are many benefits that the homeowner can gain instead of letting the home fall into foreclosure. Please see below the benefits of a short sale versus a foreclosure.

Benefits of a Short Sale

2009-11-04T20:10:00.001-06:00

There are many benefits that the homeowner can gain instead of letting the home fall into foreclosure. Please see below the benefits of a short sale versus a foreclosure.

Short Sales - Part I

2009-11-02T22:41:00.002-06:00

We are seeing more and more short sales these days and it is now a common sight nowadays. I want to educate the public and all those interested, about the process and benefits of a short sale to all parties involved in the transaction.

For those of you not familiar with short sales, I will explain what a short sale is in common everyday terms. A short sale is when a homeowner is selling his/her property for less than what is owed on the mortgage with the approval from the lender to take the lesser amount to satisfy the loan. In most cases the homeowner does not have to pay what is owed. By this time, the homeowner usually has exhausted all their other options in trying keep their home and is force to sell their property as a short sale instead of falling into foreclosure. I will explain and go into further details about the benefits of a short sale compare to a foreclosure later in another blog.

In order for a short sale to occur two things must occur: the home must be under contract (have a purchase agreement) and the lender must accept that discounted payoff amount.

Short Sales, Short Sales, and more Short Sales

2009-10-28T21:06:00.000-06:00

My next few blogs, I will concentrate on everything related to short sales from what a short sale is to its benefits and reason behind it. Short sales are here to stay…at least a while longer. If you have any questions please do let me know and add some comments. Till then, I am going to eat, breath, sleep, and live with everything related to short sales. So check back often to learn everything you need about short sales.

Ray Singhal earns the prestigious CDPE Designation

2009-10-28T21:05:00.000-06:00

Ray Singhal with Coldwell Banker Burnet (651) 398 - 6261 Ray@TheSinghalTeam.com has earned the prestigious Certified Distressed Property Expert (CDPE) designation, having completed extensive training in foreclosure avoidance and short sales. This is invaluable expertise to offer at a time when the area is ravaged by “distressed” homes in the foreclosure process.
Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.
Hundreds of homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.
“This CDPE designation has been invaluable as I work with sellers and lenders on complicated short sales. It is so rewarding to be able to help sellers save their homes from foreclosure.”
Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys the credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.
The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales.
“Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said.
Ray Singhal with Coldwell Banker Burnet (651) 398 - 6261 Ray@TheSinghalTeam.com

If its working...why stop?

2009-10-21T19:58:00.000-06:00

For first time home buyer's the $8000 tax credit will end on November 30. The tax credit, many believe is what is driving home sales and helping to stabilize home prices. If this is one of the driving factors, why stop the credit on November 30. Let the credit continue onto next year, we have just only begun seeing the real positive changes in the market this summer.

The National Associations of Realtors is fighting for this continuation of the tax credit and many other items at this very moment in Congress. Some of the items NAR hopes to improve and what Congress to address:
• The lack of liquidity in the jumbo mortgage market;
• Tight credit in the commercial real estate market;
• The Home Valuation Code of Conduct’s unintended side effects that are hindering sales;
• Increased funding to help FHA upgrade their technology and for Congress to ensure that funding be included in the final version of the FY2010 appropriation for HUD;
• Administration incentives and uniform procedures for speeding short sales under a new Foreclosure Alternative Program; and
• The potential for significant spikes in interest rates or disruptions to the flow of mortgage capital as the Federal Reserve unwinds the mortgage-backed securities purchase program to ensure that this does not happen.

If Congress listens and addresses those issues for 2010, look for a great change.

Short Sales...anyone?

2009-09-30T22:07:00.000-06:00

In the real estate world we would all love to have quick short sale (as in the time it takes to close on a home) but when you hear or see the words SHORT SALES think opposite. Short Sales can take a very very long time to close, because we now have a third party involve…the bank. The sellers can agree to the buyers’ price, terms, and conditions but the bank has the final approval on the offer and just getting an answer from the bank can take months. The term short sale is used because the banks are being shorted. For example a person owes $200000 mortgage on a home and he/she is selling the home for less than owe to satisfy or release them of their debt $200000. If you have the patience and time to wait for a short sale approval, you can find a great home for a low price.

If you are a First time homebuyer, stay clear of short sales, especially if you are looking to buy in the next few months to receive your $8000 tax credit. You will probably not make the November 30 deadline for the tax credit if you are trying to purchase a short sale home now. However, there are plenty of inventory of homes to choose from now, look in any neighborhood from Roseville to Shoreview to St. Paul, you will surely find a home to suit your needs.

Short sales and foreclosures inventory dwindling…

2009-09-23T19:36:00.001-06:00

Home prices in the current market are favorable to buyers because of the increase in foreclosures and short sales. However, the short sales and foreclosure home inventory are dwindling. Buyers are picking up these properties, especially in the low to median price range because they are really affordable. Many of the buyers have to be quick and aggressive with their offers to secure the property. Banks are pricing homes well below their value just to get a lot of activity and multiple offers on properties. Some contributing factors include Buyers trying to purchase properties before the First Time Homebuyers Tax Credit expires at the end of November.
Be aware, if you are a first time home buyer and you want to get that tax credit, get an offer accepted in October and close in Mid-November. Title companies are going to be bombarded with work during the end of the month of November and you might not be able to close by the end of month if you wait that long. Better be safe than sorry.

The unofficial end of summer...

2009-09-21T18:48:00.000-06:00

Starts with the end of the Minnesota state fair. After that the kids will be off to school and before you know it the ground will be covered in snow. Why not enjoy the summer weather all year long? Buy a home in Florida. According to article on Zillow.com, Florida has one of the highest in the United States of inventories of homes; many are foreclosures and short sale homes. Because of this buyers have been able to negotiate prices down. But don’t wait too long to make a move at buying…the market is picking up.

Everyday the markets in the twin cities are improving with sales increasing and inventories decreasing. This is trend is starting to pick up in many areas of the country not just the twin cities. The Minneapolis Area Associations of REALTORS (MAAR) reported that the median price sales increase from around $154,000 to $175,000 from March to August. The prices are stabilizing because there are fewer inventories of homes. Don’t wait, make that move and buy now when it is still the buyers’ market.

To search properties in Florida please click here.

Low prices of homes sparking activity…

2009-09-08T21:34:00.000-06:00

Many factors are contributing the low prices of homes, but all that really matters is that if you are a buyer now is the time to buy. Whether you are buying a home in St. Paul, Roseville, Shoreview or anywhere, the price is right.

There are deals out there. Nowadays, it’s not a common site to see banks heavily discount foreclosed homes to increase activity to properties. The banks will price a property at $50000 knowing that a property is worth much more, and receive multiple offers. Sometimes this backfires on the banks and they might not receive a higher sale price, but this will ensure a quick sale of their property. Also Short sales are abundant, and if you have the time to wait for a short sale you can purchase a home 15-25 percent below tax assessed value.

The low prices are sparking many buyers and investors into a buying frenzy. We are now seeing more and more, multiple offers on properties. Many people don’t want to be in multiple offer situations but if you really like a home and feel that it is worth a certain value, why not submit an offer. There are only three answers you can get: Accepted offer, counter-offer, or rejection of offer. There’s no harm in it, so get out there and buy your home today before it’s too late.

Perfect Opportunities for Buyers

2009-08-26T13:07:00.000-06:00

It is a perfect opportunity now to take advantage of the low interest rates and low home prices today and buy a home. There are numerous down payment assistance programs such as CityLiving for both St. Paul and Minneapolis. Also don’t forget the $8000 tax credit given to first time home buyers. Many cities also offer their own incentives for living in a particular location. Nowadays it is also common for Sellers to contribute to buyers closing cost and down payments. These incentives are going to only last for so long.
The interest rate today is hovering around 5.25 percent which is still very low. It will only stay so low for so long and as well as home prices. The market in June and July saw an increase in homes sales and median sales price. As the inventory of homes available decreases, the sales of price of homes will increase. If we continue on this trend the price of homes will only increase. So take advantage of the opportunities and buy a home today.

Market Improving

2009-08-21T12:10:00.000-06:00

According to the Minneapolis Area Association of Realtors, the overall median sales price for all properties was down 17.8 percent from one year ago, but up 2.1 percent from the second quarter median sales price. The median sales price of traditional homes in June was down 6.2 percent from a year ago. Lender-mediated home sales were down 15.4 percent from a year ago.

There appears to be less room for negotiation, as the Percent of Original List Price Received at Sale continues to improve—the July mark of 94.0 is 1.5 percent higher than last July.

A year ago the market was not like it is today. The market is slowly but surely improving.

Home Sales Were Strong In July

2009-08-19T16:20:00.000-06:00

Buyer activity in the Twin Cities housing market continued its strong run in July, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

For the 13th consecutive month, there were more pending sales than there were a year ago. July saw 5,174 signed purchase agreements, up 16.0 % from July 2008 and the strongest July showing since 2005. Of these sales, 43.6 % were lender-mediated foreclosures and short sales.

What does this mean? It means that buyers are very active and the housing supply is shrinking. We started to see the first signs of the housing market correction last year, and we’ve come a long way. But make no mistake, there is still plenty more than has to happen to balance out the market.

Deadline for $8000 Tax Credit Fast Approaching

2009-08-11T12:51:00.001-06:00

The deadline for the $8,000 first time home buyer tax credit is quickly approaching. The deadline is December 1, 2009 and has the following restrictions:

• Taxpayers who have not owned another principal residence at any time during the 3 years prior to the date of purchase are considered first time home buyers.

• The home must be purchased after April 8, 2008 and before December 1, 2009 in order to obtain the credit.

• Income limits apply. For married couples filing jointly the limit is $150,000 and for single people it is $75,000.

What does all of this mean? If you are in the market to buy your first home the clock is ticking for you to take advantage of the $8,000 tax credit. There are still some great homes and great buys in the Shoreview and Roseville areas.

TIME FOR SHOREVIEW HOME BUYERS TO GET OFF THE FENCE

2009-07-22T13:31:00.000-06:00

Rates continue to be at historic lows and let’s face it, any rate below 6% is considered to be outstanding. Especially when you combine it with housing prices that are at their lowest levels in 6 years. Home prices are beginning to stabilize and we are even seeing homes being sold in multiple offer scenarios.

In addition, if you are a first time home buyer, you may qualify to take advantage of the $8,000 tax credit. We’ve heard it before, but it bares repeating. When do you know when we’ve hit the bottom of the housing market…when it starts to go back up.

So, if you are in the market to buy one of the beautiful Shoreview homes or a fantastic home in any other area, it is time for you to make your move and get off of the fence.

Tips for Buying Homes

2009-07-17T15:37:00.002-06:00

Here are just a few tips that buyers should think about when buying a home:

1. Find a real estate professional that you get along with. Not only does
your realtor need to be knowledgeable, but you need to find someone that
works well with your personality.

2. Don’t try to second guess the market. If you find a home that you want,
make an offer on it.

3. Don’t ask for too many opinions from friends and family. Too many ideas
can make it harder to make a decision.

4. Accept the fact that no house is perfect. It is much more important to
focus on the things that are most important and let the minor ones go.

5. While negotiation is a big part of buying real estate, the best negotiation
is when all parties are happy with the outcome. A win-win is always a
better path.

These tips apply to first time home buyers as well as seasoned home buyers that may be purchasing their 10th home. Check back again for more tips on buying homes.

Traditional Home Sales Are On The Rise

2009-07-13T15:15:00.000-06:00

After increasing by $12,000 from April to May, the median sales price in the Shoreview and Roseville housing markets jumped another $8,500 in June as traditional homes again increased their market share. Traditional homes are defined as those excluding foreclosures and short sales.

Of the 4,764 closed sales in the Twin Cities during June, 40.7% were lender-mediated foreclosures and short sales, down from the 59.7% seen at the beginning of the year. While that percentage is still too high, it’s a definite improvement from six months ago. It also is another indication that the low rates and tax credit are helping to encourage traditional home sales.

MORE HELP FOR FIRST TIME HOME BUYERS

2009-07-07T12:22:00.000-06:00

More great news for FHA approved home buyers using the First Time Homebuyer Tax Credit. FHA approved lenders have been given the go ahead to develop a bridge-loan product that will enable first time home buyers to use the benefit of the First Time Homebuyer Tax Credit upfront.

FHA approved lenders can develop bridge loans that first time homebuyers can use to help cover closing costs, buy down their interest rates or put more than the minimum 3.5% down.

It is important to note, that these bridge loans can not be used to cover the minimum 3.5% down payment required by FHA.

Straight Talk About Foreclosures & Short Sales

2009-07-01T14:01:00.000-06:00

Let’s face it, loan modifications, short sales and foreclosures have impacted the housing market in the Twin Cities, and they’re not going away any time soon.

A homeowner first course of action should be to try and work out a loan modification with their lender. If there does not happen, then the homeowner should consider a short sale. A short sale is an arrangement that a home owner makes with the lender to accept less than what is owed on the property. This is often done to try and sell a property before it goes into foreclosure. As a last resort the lender will foreclose on a property. A foreclosed property is one in which the lender has repossessed the property from the homeowner and now the lender owns it.

First quarter statistics for the Roseville area show the number of lender-mediated homes for sale up 56.3% compared to this time last year. While traditional (non-lender mediated) homes for sale were down 33.3% compared to this time last year.

Robust Home Sales In The Twin Cities

2009-06-29T14:57:00.000-06:00

As we near the halfway mark of 2009, the Twin Cities housing market continues to show a pattern of robust home sales and declining new listing activity. Setting aside fluctuations over the Memorial Day holiday, long-term market improvement can be seen when comparing 2009 to 2008.

There were 1,210 pending sales for the week ending June 13—a strong 33.8% increase from last year. There were 1,970 new homes added to the market during the same week, a decrease of 2.6% from the same week in 2008. That 2.6% decline in new listings is a much smaller drop than we have seen in recent months when there were typically year-over-year drops of 10% or stronger.

Opportunity is Knocking for First Time Home Buyers

2009-06-24T13:54:00.002-06:00

If you have been considering purchasing your first home, but have been waiting on the sidelines for the right time, this may be the right time. This year, qualified first time home buyers can receive a tax credit up to $8,000. This is part of the American Recovery and Reinvestment Act of 2009.

Some facts about the Tax Credit:

•Available to first time home buyers
•Credit amount up to $8,000
•Eligible for homes purchased on or after January 1, 2009,
and before December 1, 2009
•Available on single family detached homes, townhomes and condominiums,
new construction or pre-existing homes
•The tax credit does not need to be repaid unless the home is sold
within the first 3 years after the purchase
•Home must be your primary residence
•You have not owned a home during the last 3 years

Interest rates are still low and there are still plenty of wonderful homes available. Now IS a great time to buy a home.

Senate Pushes To Expand Home Buyer Tax Credit To $15,000

2009-06-18T15:37:00.001-06:00

Lawmakers are pushing to revive legislation in the Senate that would almost double an $8,000 tax credit for first-time home buyers and expand the program to all borrowers.

This proposed legislation would extend the home buyer credit to multi-family properties that are used as the borrower’s primary residence. It would also eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit.

“The housing market continues to be a drag on the economy”, said John Castellani, President of the Washington-based Business Roundtable. “We believe that if we don’t stabilize this vital sector, we can’t turn the tide on the recession.”

The business Roundtable and the National Association of Realtors are both pushing to expand the tax credit and to lower mortgage rates to revive the U.S. housing market.

Home Sales Hot Streak Continues...

2009-05-29T11:05:00.000-06:00

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

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

It’s all about low rates and excellent affordability. If you’re in the position to buy a home, opportunities are available and the time for action is now.

Buyer's Market Continues

2009-05-22T13:13:00.001-06:00

The most important tip in economics is to buy low and sell high. Of course, that is easier said than done.

Nobody knows when the housing market will hit rock bottom or if it already has. Everyone wants to know when the bottom of the market will occur, however, we’re not going to know, until the bottom of the market is past by a month or by a quarter or by a half-a-year depending on what stats are being looked at.

What is clear, however, is that this is a buyer’s market for housing.

If you find a good house, buy it now because by the time we know the bottom of the market has come, it will have come and gone.

Why Use A Realtor?

2009-05-19T15:16:00.000-06:00

All real estate licensees are not the same. Only real estate licensees who are members of local, state and national REALTOR® associations and agree to act under and adhere to Professional Standards of Practice and strict Code of Ethics are called REALTORS®. REALTORS® are committed to treat all parties to a transaction honestly, and proudly display their REALTOR “R” logo.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Do it right. Use a REALTOR®.

Strong Home Sales Continue Into Spring

2009-05-15T16:16:00.001-06:00

Based on data from the Regional MLS of Minnesota, Inc. April home sales in the Twin Cities were even stronger than March's upswing according to the Minneapolis Area Association of Realtors. There were 5,211 pending sales in April, up 23.8 percent from a year ago. This is the highest showing of signed purchase agreements since April of '05 and the tenth consecutive month of year-over-year increases. Of the month's pending sales 46% were lender-mediated foreclosures and short sales-down from the last few months as more traditional properties are sold during the spring selling season but up from last year at this time.

Pending Home Sales On The Rise

2009-05-13T13:16:00.001-06:00

Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”

Housing Sales Spring Back in the Metro Area

2009-05-08T10:56:00.000-06:00

The 2009 spring selling season appears to be off to a strong start as indicated from the 13 county metro housing statistics released by the Saint Paul Area Association of REALTORS®.

Closed home sales were up 14.25% from one year ago. There was also an increase in the number of mortgage applications compared to last year. Some contributing factors include the first time homebuyers $8,000 tax credit and historically low interest rates. It appears as though buyers are feeling more confident, moving off the sidelines and purchasing homes again.

First Time Home Buyers Give Market A Boost!

2009-05-04T12:20:00.002-06:00

Affordable home prices combined with historically low mortgage rates and first-time buyer's tax credit are fueling the sudden real estate turnaround. We've heard of open houses with a home that was priced in the $110,000 - $115,000 range getting 30+ people through in two hours. And many homes are now selling in multiple offer scenarios. Our optimism is supported by hard numbers. Pending home sales have jumped 20% compared to the same period a year ago. Chris Galler heads The Minnesota Association of Realtors® and says the housing market in the $100,000 to $250,000 price arena is extremely hot right now.

Could You Use $8,000?

2009-04-25T05:33:00.000-06:00

Pohlad charity gives $8,000 to Dayton's Bluff homebuyers
Grant aimed at two hard-hit ZIP codes
By Tad Vezner

People looking to buy a home in St. Paul's Dayton's Bluff neighborhood will get extra money for a down payment, with the help of a $1 million grant from a Minneapolis charity.

Anyone who purchases a single-family home or duplex in the east St. Paul neighborhood by the end of the 2009 calendar year will receive $8,000. The money will not have to be repaid if the owner keeps the home for seven years. The owner has to stay in the home to qualify, and there are no limits on income.

The homes also must be in the 55411 or 55106 ZIP codes — the two areas hardest hit by foreclosures statewide, according to the Minnesota Housing Finance Agency. The funding would be in addition to an $8,000 federal tax credit that is part of this year's federal stimulus package.

"We're pretty excited. We should be ready to go shortly," said Jim Erchul, executive director of Dayton's Bluff Neighborhood Housing Services of St. Paul, the local nonprofit that is managing the grant funds. "That would help them (homebuyers) buy some furniture when they move in."

The funds are part of a $20 million effort by the Pohlad Family Foundation, a charity that focuses on family-based programs, to combat the effects of the economic downturn. It is giving job retention grants and low-interest capital improvement loans to small businesses; improving neighborhoods hit by the housing crisis and assisting homeless families with rent; and helping local nonprofits with other needed services, primarily in the areas of employment and housing.

In addition to several local and state housing agencies, the primary fund managers include the Minnesota Chamber of Commerce Foundation and MAP for Nonprofits.

The foundation usually gives $7 million to $10 million annually, primarily to local Twin Cities programs. The $20 million grant was made in addition to the foundation's regular allocations this year.

Anyone interested in the Dayton's Bluff program should contact Dayton's Bluff Neighborhood Housing Services at 651-774-6995.

Tad Vezner can be reached at 651-228-5461.

St.Paul: City Offers 'Heroes' Tax Credit For First Home Buyers

2009-04-09T13:38:00.000-06:00

Later this month, St. Paul and Minneapolis city officials will unveil a program that provides $8 million worth of federal tax credits to qualified first-time homebuyers who purchase homes in either city. St. Paul's Housing and Redevelopment Authority voted to sweeten the deal for vets, firefighters, emergency med techs, members of the US armed forces, health care workers and certain public sector employees. Those borrowers could receive loans of up to $15,000 for down-payment assistance, closing costs or reducing the principal amount owed on a mortgage.

Market Trend Continues

2009-04-01T13:38:00.001-06:00

When compared to the same week a year ago, the market trends of the past few months continued this week with an increase in pending sales while new listings remaining about the same. Interest rates remain at record low's. Call us today to open the door to your dream home.

Weekly Market Activity Report

2009-03-24T13:06:00.003-06:00

Weekly Market Activity Report 3.23.09
Has everyone remembered to “spring” forward? It looks like the Twin Cities housing market certainly has, as the new season has brought in an uptick in sales along with the warm weather. The market can only hope that “spring” fever is more than just a figure of speech.

Speaking of pending sales, while they have tapered off during the week ending March 14, there is no denying that since the new year began pending sales have steadily outperformed last year’s numbers. In fact, even with almost no increase in pending sales activity the 870 pending sales for the week are still 14.9 percent higher than last March at this time.

Total active listings are another story. While new listings for this period are only 13.9 percent lower than last year, active listings are down nearly 14.7 percent. This can be looked at in a positive light however if you consider the combination of pending sales, decreasing inventory, and higher HAI (Housing Affordability Index) are all helping to get more people into homes throughout the new spring season. This coupled with the federal government’s tax credit efforts could give the Twin Cities housing market the added boost it needs to awaken and to realize the potential that is out there.

There are many other events that coincide with spring: spring training, spring fever, spring boards…ok that last one isn’t technically associated with the season. But with the Month’s Supply of Inventory for March down 15.2 percent over last year, agents across the Twin Cities can assist buyers in diving right into the market now that conditions are beginning to warm

Need Help with Your Fannie Mae or Freddie Mac Mortgage? Making Home Affordable is Here!

2009-03-20T09:41:00.000-06:00

A new government help program just launched yesterday with to assist homeowners in restructuring their loans. The US Treasury Department’s easy-to-navigate website and telephone hotlines were activated on March 19, 2009, for the Making Home Affordable program. This program was created to assist the over 9 million homeowners with a Fannie Mae or Freddie Mac mortgage refinance or modify their mortgage. The website is makinghomeaffordable.gov and the toll-free hotline numbers is 1-888-995-4673.

The site offers in formation on how to refinance to a new loan as well as steps to modify a current Fannie Mae or Freddie Mac loan. Easy step by step instructions are available so that you can quickly determine if you are eligible for the program. Not certain if your home loan is held by either Fannie or Freddie? There are weblinks and phone numbers to help you determine if your mortgage is held by either organization.

Minnesota: Feds Buying Thousands Of Acres Along MN River For Wildlife Reserve

2009-03-11T14:05:00.001-06:00

A federal agency is quietly spending tens of millions of dollars to lengthen a swath of publicly owned natural areas up and down the Minnesota River. It's possible because of a fund created almost a decade ago when a new airport runway sent flights over a part of the MN Valley Wildlife Refuge for the first time. The Metropolitan Airports Commission agreed to set up the $26 million fund to compensate for its intrusion. Th e result could more than double the number of miles of reverfront included in what is already an unusual asset for any big metro area. Land buys are taking place as far south as Mankato.

St. Paul: Getting First-Time Buyers To Bite!

2009-03-03T16:42:00.000-06:00

Real estate agents and builders hope an $8,000 tax credit will encourage new buyers to bite, jump-starting the market. Oakdale residents Mandy Palank and her fiance, Jeff Thalhuber, toured a bank-owned home in Eagan and liked the yard but the kitchen needed work. "The $8,000 credit is definitely a huge incentive." In the unfolding drama of the nation's troubled market, the role of first-time buyers has come into focus with the passage of the federal stimulus package but the tax credit is only available to people who haven't owned a home in the past three years and it can be applied to home purchases made by November 30. The National Association of Realtors estimates that the measure could compel as many as 300,000 people to buy homes.
Reprinted from St.Paul Pioneer Press article

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2009-02-24T14:00:00.001-06:00

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What's Ahead for Real Estate in 2009?

2009-02-17T14:43:00.001-06:00

2009 will be a year of recovery and stabilization for the real estate industry. Here are my 15 top predictions for 2009:

1. Mortgage rates will drop, then rise, and finally stabilize
• Rates will be at a historical low in the first part of the year.
• Rates will go up in spring & level off after the first half of the year.

2. Investors will come back into the market in 2009
• The Federal Reserve plans to pump up the housing sector by buying up to $100 billion dollars worth of bonds issued by Fannie Mae & Freddie Mac.
• The Fed will also buy ½ trillion dollars of mortgage-backed securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae.

3. Buyers will jump off the fence and come back into the market
• With fixed rates in the mid-fives -- combined with pricing at 2003 and 2004 levels -- it is an excellent time to buy.

4. Sellers will become creative with alternative ways to add value to their home sale with incentives such as:
• Interest rate buy-downs
• Seller financing & Other incentives

5. Listing Inventory will go down as the market absorbs inventory
• Nationally, listing inventory will begin to go down as inventory is consumed by many markets where new home inventory is on the decline. Builders in 2008 focused on selling existing inventory and did not focus on building new projects so as the year goes on inventory numbers will decrease. Coupled with lower interest rates and higher investor confidence, this consumption of inventory will continue.

6. Market time will decline and remain on the lower end of the spectrum
• Days-on-market numbers will go down in 09 due to a lack of new home inventory coming on the market.

7. Real Estate agents will leave the industry in record numbers

8. Builders will use auctions to sell off inventory; many will leave the business entirely
• Builders will turn to auctions to liquidate remaining properties.
• Builders will leave the industry due to financial pressures from the lack of 2008 sales.
• New construction will virtually grind to a halt as builders are unable to develop new product as a result of excess inventory / poor sales in 2008.

9. New home inventories will reach record low numbers in the fall of 2009
• Many builders stopped buying land in 2008, and will therefore be unable to build in 2009.
• Builders stopped building in 2008 and concentrated on selling standing inventory. As a result, they were not building new inventory. This will lead to an inventory shortage in 2009.
• Existing new home inventory will be absorbed by the fall of 2009.

10. Consumer confidence will improve in the spring of 2009
• Consumer confidence will improve in the spring of 2009, and buyers jump back into the market…carefully.
• Consumers will look to real estate agents for guidance in buying and selling.

11. Appreciation will be small to nonexistent in most markets as the industry stabilizes
• Most markets across the country will see little or no appreciation while the market stabilizes and inventory gets absorbed by the market.
• Some markets will continue to see their markets decline into the second half of 2009 as inventory levels stabilize.

12. The rental market will BOOM IN 2009
• It’s estimated that almost 2 million homes will be foreclosed on in 2009. This will transform many former homeowners into tenants.
• Banks will rent their real estate owned properties rather than sell at a substantial loss.
• Tighter credit criteria will force potential buyers to renew their current leases after they are turned down for a mortgage.
• Consumer fear and an uncertain employment picture will keep would-be, credit- worthy buyers on the sidelines, leading to reduced turnover in rental housing.
• Americans who have realized a loss by recent homeownership will decide that ownership is not worth the risk and trouble. They will sign a rental lease and happily return to rental living.

13. "In demand" homes will become the "safe necessity" of 2009
• Smaller, green-built, and energy efficient homes will be in big demand.
• Home with a good location in relation to work and school will be in demand.
• Homes in the mid-range of price for their market will be in demand as more homebuyers become more frugal.

14. Real estate companies will merge in 2009
• Smaller real estate companies will merge with larger companies to make it through the market downturn.
• Competition in the industry will shrink as the number of companies and the numbers of agents is reduced.

15. Second home markets will see far less activity; many will suffer in 2009
• Second home markets in many markets will suffer due to the financial losses owners of second homes experienced as their stock portfolios, pensions, or other investments devalued and deteriorated.
• Second home markets will suffer due to consumers’ need to relocate assets and financial priorities.

While we will see adjustments in 2009, it’s sure to be a much better year than 2008.

Published by Realty Times: February 12, 2009

Weekly market report

2009-02-10T14:18:00.001-06:00

For the week ending January 31, new listings continue at a lower level than
seen last year, clocking in at 1,635—a 15.3 percent drop. Conversely, pending
sales continue to raise sand with 673 recorded for this week's report—25
percent above last year. Basically, this is all welcome news. Having fewer
listings on the market, combined with an increase in pending sales, helps to
reduce the Months Supply of Inventory to 13.5 percent when compared to last
year at this time—down from 8.9 to 7.7 months. This means it will take the
current supply of houses for sale 7.7 months to sell (on average).
The Percent of Original List Price Received at Sale continues to fall, with the
January figure of 89.5 sitting at 1.6 percent less than 2008. It's important to
consider sales prices of foreclosure homes and how they affect this figure.
Our new Housing Affordability Index jumped to 202 in February. This is a new
record and means that the median family income is 202 percent of what is
necessary to qualify for the median-priced home. Again, we must consider how
the sales prices in the lender-mediated market are affecting this figure, but we
can say with some confidence that there are a number of very attractive buying
opportunities in the local housing market.

What would convince home buyers to buy in today’s market:

2009-02-03T13:43:00.000-06:00

What is the magic mix that will get buyers motivated. Mortgage rates lower than today’s 5%? smaller down payments? Below market value pricing? Special amenity packages? Or a big tax credit? Strategies to bring buyers back into the market dominated the recent Annual convention of National Association of Home Builders in Las Vegas.

Survey results suggest that a tax credit alone is not sufficient to motivate buyers to sign purchase contracts.. The most effective in convincing them to buy now is: a 30 year loan with a fixed 3% interest rate. The Zero down option would be highly attractive to potential buyers Guarantees by builders that loan applications will be accepted when buyers verify their income and have a fair credit score. Price concessions also are compelling to would-be buyers. Most effective of all: a 10% discount below TRUE market value—in other words, instant equity for the purchase upfront.

Bottom line: Look for builders to offer combination packages of special financing, price concessions, lower down payments and perhaps loan application approval guarantees. Tax credits would continue to get more push on Capitol Hill but financing concessions appear to have more clout with potential home buyers.

Downtown St.Paul: Hot For This Market

2009-01-27T14:39:00.000-06:00

Downtown St. Paul managed a 6 percent increase in the median sale price for a home during 2008, making the district a Twin Cities oddity alongside Edina and two sections of Dakota County in posting price gains, compared with the previous year. Overall, the median price in the 13-county metro dropped 13 percent this past year, with declines being posted in the majority of districts defined by Realtors. The new data had St. Paul civic leaders boasting about the joys of downtown living and agents offered a variety of explanations for the uptick, ranging from size of the condos sold to a small number of downtown foreclosure properties.

Nation: National: Long-Term Rates Fall For Eleventh Consecutive Week

2009-01-20T14:55:00.000-06:00

Long term interest rates fell again in the week ending January 15th, according to Freddie Mac's Primary Market Mortgage Survey. Rates are the lowest they have been since Freddie Mac begin the PMMS in 1971

LONG-TERM RATES FALL FOR TENTH CONSECUTIVE WEEK SETTING YET ANOTHER NEW LOW

2009-01-12T11:28:00.000-06:00

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.01 percent with an average 0.6 point for the week ending January 8, 2009, down from last week when it averaged 5.10 percent. Last year at this time, the 30-year FRM averaged 5.87 percent. The 30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.

The 15-year FRM this week averaged 4.62 percent with an average 0.7 point, down from last week when it averaged 4.83 percent. A year ago at this time, the 15-year FRM averaged 5.43 percent. The 15-year FRM has not been lower since June 13, 2003, when it averaged 4.60 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.49 percent this week, with an average 0.7 point, down from last week when it averaged 5.57 percent. A year ago, the 5-year ARM averaged 5.63 percent.

One-year Treasury-indexed ARMs averaged 4.95 percent this week with an average 0.5 point, up from last week when it averaged 4.85 percent. At this time last year, the 1-year ARM averaged 5.37 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Interest rates for 30-year fixed-rate mortgages fell for the tenth week to a fourth consecutive record low due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," said Frank Nothaft, Freddie Mac vice president and chief economist. "On November 25, 2008, the Federal Reserve announced that it planned to purchase up to $500 billion of these securities by the end of June of this year. For the sake of comparison, there were roughly $4.7 trillion of such securities backed by home mortgages available as of September 30, 2008.

"Since the end of October 2008, these rates have declined by almost 1 1/2 percentage points, or payment savings of about $184 a month for a $200,000 loan – an additional $11 dollars from last week."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Nation: 4 Facts About Down Payments In Today's Market

2009-01-05T12:29:00.001-06:00

There is some misinformation in the media lately about the required size of a down payment for a mortgage in today's market. According to the National Association of Realtors, here are the facts: There is some misinformation in the media lately about the required size of a down payment for a mortgage in today's market. According to the National Association of Realtors, here are the facts:

An individual may be required to put down 20 percent based on that person's financial situation but that's not a requirement for all buyers.
A borrower who puts down less than 20 percent is required to obtain mortgage insurance.
Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.
FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with famly help) can become a homeowner.

Record low mortgage rates toss housing a lifeline

2008-12-29T11:34:00.000-06:00

With the $500 of monthly savings Jim Hennessy of San Diego gained by cutting the rate on his $417,000 mortgage, he plans to rebuild his beaten-up retirement account and maybe even take a cruise.

This is the outcome the U.S. government was driving at when it said it would pump hundreds of billions of dollars into buying mortgage bonds, freeing up lenders to make new loans and lower-rate refinancings that spur consumer spending and the economy.

"Maybe there's a vacation in our future, maybe a cruise because those rates have come down so much," said Hennessy, managing director of a marketing firm.

The worst housing slump since the Great Depression has crippled top international banks and has tipped the world's biggest economies into recession.

Hennessy cut his mortgage rate by a full percentage point by refinancing 11 days ago into a 5-1/2 percent 30-year loan.

That will help to pay college tuition for his children, and "we'll probably put more into savings and try to have some semblance of a retirement," he said.

Hennessy is just one example of borrowers aiming to reduce their home loan payments or buy a home as a result of government actions to push mortgage rates to new lows.

The average 30-year U.S. mortgage fell more than 1/4 point in the week ended December 18, to 5.19 percent, the lowest since Freddie Mac started its weekly survey 37 years ago.

It was the seventh straight weekly decline and brought rates down from about 6-1/2 percent in October.

The decline was also the result of the Federal Reserve cutting its benchmark federal funds rate target to a record low this week.

"Being baby boomers, we're looking down the road at retirement, and are making every effort to be as debt free as possible," Hennessy said.

Deep stock market losses and two years of home price declines have shredded wealth for many homeowners who may be able to restore some of their losses with cheaper borrowing.

Rodney Anderson, managing partner of Rodney Anderson Lending Services, a unit of Supreme Lending, in Plano, Texas, said mortgage applications are starting to flood in.

"We're seeing pre-approvals in the amount comparable to 2003, and July 2003 was my biggest month ever in mortgage history," he said. "I closed 287 loans that month and we're already seeing closings occurring in December and our January pipelines are just starting to launch."

Swapping high-rate home loans for more affordable mortgages is driving most of the demand, but purchases are also starting to revive, he said.

"With current low gas prices and the amount of money people save on refinancing, this is an opportunity for the economy to start making moves in the right direction," Anderson said.

MULTIPLE CHOICES

An overabundance of unsold homes has been one of the biggest thorns in this housing crisis. In addition, much lending froze amid huge write-downs by banks on soured mortgages and record foreclosures.

The latest interest rate cuts may be enough to entice some buyers who were waiting for even lower prices. Borrowers with strong credit have plenty of homes from which to choose.

Keith Freeman, a director at a technology consulting firm who now rents in Atlanta, plans on moving to Miami and has made a bid on a house there. Despite some trepidation that rates could fall still further, he said, "Rates are historically low, let me just bite on something."

It makes it easier that he doesn't have to sell a home, a stumbling block for many buyers in a struggling market.

"I'm not concerned about myself," Freeman said. "I have phenomenal credit, money in the bank, a good-paying job, I can put 20 percent-plus as a down payment. I know I'm a candidate that lenders will probably drool over and I can close in a minimal amount of time."

But borrowers without pristine credit and easily documented income will have a harder time. Stringent lending standards could mean that at least a third of those who apply to refinance will fail to win approval, several analysts said.

Many owners also have mortgages that are higher than their homes' value, and won't be able to refinance.

"Don't count your chickens before they've hatched," advised John Murray of Realty Executives Prestige Properties in Boston.

"Historically speaking, if we saw a half-a-point rate drop we would expect a 10 percent rise in sales," he said. "There's a lot of desire, but we have yet to see if that yields fruit."

Weekly market activity update

2008-12-22T12:40:00.000-06:00

As the holidays loom, activity in the the Twin Cities housing market that isn't lender-mediated (i.e. foreclosures and short sales) is quieting down quickly, while the lender-mediated market is plugging along with no discernable effect from the usual seasonal ebbs and flows.

For the week ending December 13 there were 1,240 total new listings and 556 pending sales, which are up 2.2 percent and 36.3 percent, respectively, from the same week in 2007. Of these new listings, 48.0 percent of them are lender-mediated, while a hearty 60.0 percent of pending sales are. The market share comprised of these lender-mediated homes has been growing steadily every week for the last several months and should either hold steady or continue to grow through the rest of 2008. Traditional sellers always pull back this time of year—banks do not.

Minnesota:Why Are Property Valuations Up?

2008-12-15T09:54:00.001-06:00

In this economic downturn, with home prices down,then your taxes for next year should go down, right? Homeowners showing up at truth-in-taxation hearings around the state are finding that is not necessarily the case and grappling with the fact that their property taxes will actually go up in 2009! Last night's hearing in St. Paul got a little heated with Christopher Rocco of St. Paul asking for an explaination of his taxes. The county has assessed the value of his home at $120,000 but he says that seven of the 21 units in his complex are in foreclusure. "They're selling for $20,000 apiece, so if they're trying to tell me that they're going to tax me on a $120,000 home, I'm not going to stand for that." Homeowners who want to appeal their property valuations need to do so in the spring, not December. Last spring, about 3,000 people contested their home values in Ramsey County and that figure could double next year. Says Gordon Folkman who directs the property tax division for the state's Revenue Department, "The primary reason that taxes change is that it's a function of a budget decision by cities, counties and school districts.

Drop in mortgage rates leads to jump in affordability

2008-12-11T10:17:00.000-06:00

Drop in mortgage rates leads to jump in affordability

Minneapolis, Minnesota (December 10, 2008) – According to the Minneapolis Area Association of REALTORS®
(MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc., a combination of substantial
declines in mortgage rates and the continued downward movement of home prices is leading to an unusually
attractive affordability environment.
Mortgage rates declined well into the 5 percent range
in the last month—the best rates of 2008 and the most
attractive since 2003. Add November’s tantalizingly
low median sales price of $175,000—down 19.2
percent from the same time last year and the lowest
November showing since 2001—and you have
extremely healthy affordability.

It is absolutely ‘go time’ for anyone interested in
making an affordable home purchase,”said Kevin
Knudsen, MAAR President. “The current combination
of low prices and low rates is unprecedented.”

MAAR’s Housing Affordability Index (HAI) jumped 19 points in the last month, and currently sits at 180. This is up
27.7 percent from last December’s mark of 141 and is the highest recorded HAI since we began tracking the data in
1990.
Lender-mediated home sales, which accounted for 53.5 percent of pending sales and 47.3 percent of closed sales,
posted a November median price of $130,881. This is a drop of $5,000 from last month and a decline of 20.7
percent from last year. Traditional properties, which exclude foreclosures and short sales, had a November median
sales price of $225,420, a decrease of 2.0 percent from last year.
The stark differences in home prices between the lender-mediated market and the traditional sales market has led
to two very different market segments, each comprising roughly half of total market activity. Foreclosure and short
sale prices are falling fast as banks aggressively price their homes, while the traditional market is more effectively
maintaining its value as buyers appear willing to pay a fair-market price for “turnkey” properties that are closer to
move-in ready. The one thing each market segment has in common is a large increase in affordability thanks to the
recent drop in mortgage rates.
“Buyers are being rewarded by market conditions that have continued in their favor all year,” said MAAR President-
Elect, Steve Havig. “Mortgage rates haven’t been this good in five years.”

Nation: Mortgage Rates Dip For 4th Straight Week!

2008-12-05T10:39:00.000-06:00

30-year mortgages fell below 6 percent and are heading lower due to the government's massive new effort to aid the U.S. housing market. The Fed's move to spend up to $600 billion buying mortgage-backed securities owned or guaranteed by Freddie Mac and Fannie Mae caused rates to drop immediately by one half-point. Rates on 30-year fixed-rate mortgages dropped to 5.97 percent down from 6.04 the week previous. Rates on the 30-year hit a high for 2008 of 6.63 percent in July.

Holiday Season Opportunity For Today's Sellers

2008-12-01T10:38:00.003-06:00

Holiday Season Opportunity For Today's Sellers

If you're getting ready to sell your home, doing so this season offers some real advantages. Although spring is the traditional high season for home listings and sales, it isn't necessarily a better time to sell. By waiting until spring to list your home, you could face more competition from other sellers. In addition, interest rates could be higher by then, discouraging some would-be buyers.

Here are more great reasons to consider listing your home now:

Motivated buyers. With fewer buyers in the marketplace during fall and winter, home shoppers tend to be more serious about purchasing. Consider that many corporate moves are made during December and January. Transferees need to find new homes fast--perhaps in your neighborhood!

Fast start for kids. Some experts advise parents that the transition to a new home can be smoother for some kids when they are moved during the school year--rather than spending the summer "friend free." Starting at a new school immediately upon arrival in the area helps kids establish routines more quickly.

Seasonal charm. Selling your home during cooler weather or over the holidays heightens its "warm" appeal. Keep your home bright by turning on lights and opening curtains and shades.

Call us today

Metro: Market Gains Momentum

2008-11-25T11:32:00.000-06:00

Driven by bargain hunters and first-time buyers, the local market is feeling an uptick. Joel Jordan was pleasantly surprised when the house he fell in love with in Stillwater, dropped in price by nearly $30,000 and making it affordable. He had looked at about 40 houses, mostly foreclosures and fixer-uppers. Despite an almost daily dose of dim economic news, the Twin Cities metro area is gaining some momentum. Pending home sales rose 6.9 percent during October from a year ago. It was the fourth consecutive month of year-over-year increases. Closed home sales for the year are still almost 5 percent behind last year, but rose 12 percent in October. A growing share of those sales were distressed sales which help drive down the median sale price and those prices are now approaching levels not seen since the beginning of the decade.

Nation: Rise In First-Time Buyers, Long-Term Plans

2008-11-17T11:36:00.000-06:00

The 2008 National Association of Realtors Profile of Home Buyers and Sellers shows first-time buyers have risen and they plan to own their homes longer than buyers in the past. Lawrence Yun, NAR chief economist, "First-time buyers are more flexible in entering the market because they aren't concerned about selling an existing home. Given low home prices, plentiful supply and affordable interest rates, it's been an optimal time for entry-level buyers with a long term view. The number if first-time buyers rose to 41 percent from 39 percent of transactions last year and 36 percent in 2006. The median age of first-time buyers was 30, down from 31 in '07 and the median income was $60,000. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007.

Metro: Housing Researcher Finds A Ray Of Sunshine

2008-11-10T11:59:00.000-06:00

spotted some encouraging signs in residential construction trends. Closed sales of newly built homes in the Twin Cities came in with a 23 percent decline compared wit the previous 12-month period. The silver lining? It's one of the mildest year-over-year declines recorded since 2005 says Jones. Jones also noted that the inventory of finished vacant homes on the market dropped by a third to 2,377, during the third quarter of 2008. Homebuilders have been trying to work through that supply because these spec homes exert a downward pressure on overall prices. These bits of relatively good news in the MetroStudy report to build on some other positive signs for homebuilders. For example, the U.S. Commerce Department reported that new home sales unexpectedly rose to 2.7 percent in September, although median sale prices dropped too. The Minneapolis Area Association of Realtors reported a 42 percent increase in pending sales for September. Despite the silver lining, there's no denying the clouds; the financial crisis, more restrictive credit policies, the psychological affects of falling prices and foreclosures.

Today’s Market Commentary. Slightly higher rates today.

2008-11-07T12:03:00.001-06:00

Commentary: The mortgage market was bounced around a little this morning by the Bank of England’s stunning 150 basis-point cut in short-term rates, well in excess of the most aggressive forecasts calling for a cut of 50 basis-points. .Short-term interest rates in Britain are now at their lowest level in more than 50 years.

The sudden swoon in mortgage prices this morning suggest that mortgage investors are beginning to believe that the massive effort by the world’s central bankers will ultimately prove to be effective in jump starting the global economic engine. Rate cuts are viewed as leading to a greater demand for capital which in-turn ultimately leads to higher interest rates.

Closer to home the Labor Department said initial jobless claims for the week ended November 1st fell by 4,000 drew nothing more than a passing glance from mortgage investors. In a separate report the Department said third-quarter Productivity grew at a very anemic 1.1% pace while unit labor costs climbed 3.6%. While the unit labor costs increase is a bit disconcerting, most analysts see virtually no reason to fear a resurgence in wage driven inflation pressures.

The media channels are full of text and talk regarding the recession – and some even talking about an extended recession. As usual these “talking heads” fail to provide much perspective in terms of the time this economic condition might prevail. I think it is worth noting that since the Great Depression, there have been six major recessions; the recession of 1953, 1957, the 1973 oil crisis recession, the 1980 recession following the Iranian Revolution, the 1990’s recession and the early 2000 recession brought on by the collapse of the dot-com bubble. Three of these recessions lasted two years – and the other three lasted one year – start to finish.

If, as many suggest, the current recession began in mid-2007 -- we should reach the point at which economic activity begins to show a notable and sustained improvement somewhere between March and June of 2009. We personally find it hard to believe that $10 trillion in stimulus provided by the world’s central banks -- together with massive cuts in short-term interest rates -- will fail to have its intended effect of freeing the economic pendulum from the current recessionary mire. If our assumption is accurate, look for the economic pendulum to get a very healthy push in the direction of accelerating growth as the largest amount of cash and cash equivalents the world has ever seen that is presently sitting on the sidelines gets deployed.

2008-10-31T10:59:00.000-06:00

What, a Halloween that is not scaring the markets? Halloween may not be, but October 2008 will go down as the most volatile and scariest month ever in the world wide financial markets and we cannot wait for November to come. Oil in October dropped below $100 a barrel, than $90, than $80, than $70 and now is around $65 a barrel. Gas is now being reported in the Twin Cities as $1.99 a gallon. Dow tumbles to almost 8,000 and now back up over 9,000. What a month. History in the making but we have to be honest, we are glad the month is over.

So what’s gong on in the Markets on Halloween. Nothing scary right now. MBS prices are up +12/32 (FNMA 30-yr 6.0 at 100.10), which is slightly below where PHH priced this morning which was around +16/32nds. The 30-yr fixed FNMA required net yield (60 day) is now at 6.37%, up from 5.84% at the end of September. This morning, MBS markets have recovered some of the losses seen earlier in the week. Today's economic data had little impact. The Core PCE price index rose 2.4% from one year ago, matching expectations, and Personal Income also came in close to the consensus forecast. The Dow is up, but only 10 points. Chicago PMI and Consumer Sentiment will be released soon, and Bernanke will be speaking this afternoon and that could add one more round a volatility to this October 2008.
Happy Halloween

Minnesota: State Gets Cash Boost To Help With Selling And Rehabbing Of Homes

2008-10-27T11:06:00.000-06:00

Three metro counties and the state of Minnesota will receive federal money through a new unit of the Department of Housing and Urban Development that aims to help communities hard hit by the foreclosure crisis. From the $57.8 million federal pot, the Minnesota Housing Finance Agency received $38.8 million, Minneapolis, $5.6 million, St. Paul, $4.3 million, Hennepin county $3.9 million, Dakota County, $2.8 million and Anoka county $2.4 million. Those communities were chosen based on the number and rate of subprime mortgages, delinquencies and defaults. The aid is funneled through HUD's new Neighborhood Stabilization Program and can be used to purchase foreclosed properties for rehab and sale and in some cases demolition. Homes that are sold through the program must be sold at or below the purchase price plus the rehab investment. The money can also be used to offer down-payment and closing cost assistance to buyers who are at or below 120 percent of the area's median income or to create land banks to stabilize neighborhoods and encourage development.

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2008-10-20T09:00:00.000-06:00

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Big discounts push increase in September home sales

2008-10-15T12:39:00.001-06:00

With the stock market skidding and the credit markets in disarray, Marissa McDonald and Travis Gehling are paying close attention to what's happening in the economy. None of that, however, will deter them from buying a house, McDonald said, as they drove to an inspection on a house they plan to buy in Cottage Grove.

The first-timers said that sellers were offering serious discounts on just about all of the 20 or so houses they looked at during the past couple of months, and they're hoping to get a 7.5 percent discount on the one they plan to buy.

Such discounts and a flood of clearance-priced foreclosures helped drive a 42 percent increase in pending home sales last month compared with a year ago, the third consecutive month of year-over-year increases, according to data released Friday by Twin Cities-area Realtors associations. Whether that translates into a long-term recovery against a backdrop of economic uncertainty remains to be seen.

Among sales that closed in September, the median sale price declined 15.6 percent, to $189,000.

Much of that decline was caused by a steady increase in foreclosures and "short sales" -- sales where lenders agree to a sale for less than what is owed on the mortgage -- that are moving through the market. Almost 42 percent of September pending sales were these lender-mediated transactions, up from 17.5 percent last year at this time, according to the Minneapolis Area Association of Realtors.

The distressed sales are putting tremendous downward pressure on sale prices across the board. The median sale price of lender-mediated transactions only was $146,000, 11.5 percent decline over 2007, and even the sale price of traditional homes fell 8.6 percent.

Such declines are an indication that sellers are offering steep discounts. During September, sellers on average received 92.2 percent of their asking price; just two years ago they got 96 percent.

The September spike in pending sales will help the market regain some ground after a very slow start to the year. So far this year, pending sales are now running neck-and-neck with last year.

Although a 42 percent increase sounds impressive, the 4,036 pending sales last month were less than the five-year September average of 4,138. The increase was due in part to a particularly slow September 2007, which was the slowest September in a decade.

Dogged by record numbers of distressed sales, the market is also getting a boost from a slowdown in listing activity. Last month the number of new listings to hit the market was 4.2 percent behind last year at this time and 13.2 percent below 2006. That's a trend that's been underway for most of the last half of this year; so far this year new listings are off 11.2 percent compared with last year.

While sellers are certainly cursing the market and the flood of bargain-priced foreclosures they're competing with, the fundamentals for buyers like Gehling and McDonald who have good credit and cash for a down payment remain strong. Mortgage interest rates have remained relatively stable and near 30-year lows, there are nearly 10 houses on the market for every buyer and the government is offering a $7,500 tax credit for first-time buyers. And that's why the housing affordability index rose to 159, its highest level since the spring of 2003.

With consumer confidence waning but discounts on the rise, the market is becoming increasingly nuanced as segments of the market improve while others decline. In Minneapolis, for example, there was nearly a 40 percent increase in the number of closed sales last month, but nearly a 24 percent decline in the median sale price.

Data were even more extreme in St. Paul, where the number of sales in September rose nearly 44 percent from 202 during 2007 to 290 last month with the median sale price falling 28 percent. The same was true in several suburbs, where there were fewer sales, but many striking examples of huge increases. The number of sales in Richfield, for one, doubled from 26 to 52.

Nation: Pending Homes Sales Increased 7.4% From July To August

2008-10-08T13:52:00.002-06:00

The National Association of Realtors® released reports of the highest increase in pending home sales since June of 2007. The group said its seasonally adjusted index of pending sales for existing homes rose to 93.4 from an upwardly revised July reading of 87. Wall Street economists surveyed by Thomson/FR had predicted the index would fall to 84.9. The index had sunk to a record of of 83 in March.

Twin Cities: Signs Of Hope On The Housing Front

2008-10-06T11:24:00.000-06:00

The Minneapolis Area Association of Realtors said that in the last seven weeks, 1500 more homes were sold than the same period last year and there are eight percent fewer homes on the market than a year ago. The translation: the bulk of homes for sale is beginning to ease. "We're seeing some buyer entry into the marketplace and that's really good news", said Kevin Knudsen, President of the association. However, many homeowners haven't seen evidence of the recovery because most of the movement is on homes priced below $200,000 and many of those foreclosures. The big question is how the events of this past week will affect what appears to be the beginning of a recovery. Some experts predict that home loans will be easier to get it the bailout passes.

Real Estate Outlook: Impacts of Bailout

2008-09-30T10:08:00.001-06:00

The federal government's multi-billion-dollar bailout of bad mortgage debt could be a game-changer for home buyers, sellers and real estate professionals.

But how much may not be clear for months, maybe even a year.

In the short term, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association, the government's plan to greatly expand purchases of mortgage backed securities by the Treasury, Fannie Mae and Freddie Mac, should "provide a signal to the market that there's going to be an underlying floor on (interest) rates."

That's because when the Treasury buys mortgage securities -- and it's pledging $10 billion for this month alone, plus lots more to come - it has the effect of pumping fresh capital into the mortgage market, allowing more home loans to be made at more favorable rates.

Now, although rates should remain low, currently they're close to 6 percent for 30-year fixed rate loans on average -- that doesn't mean it'll be easier to qualify for a home purchase if you've got damaged credit or an income too low to pay for what you want to buy.

Those days are over for years to come.

What about the larger economic impacts of the bailout plan? Again, we're at the earliest stages of this whole process, but if the plan brings a sense of stability to the financial markets, then, absolutely, the net effect should be to restore confidence.

And consumer confidence is an essential ingredient for a home buying recovery. People who are worried about the safety of their money market investments and bank deposits aren't good candidates for purchasing houses -- even at rock bottom prices.

But the reverse is true as well: Greater consumer confidence in the financial marketplace -- along with modest interest rates and attractive prices -- could kick the whole cycle into gear and get housing moving again.

There's another factor here too: Without the big bailout plan, hundreds of thousands of financially distressed homeowners were on a non-stop conveyor belt to foreclosure. But when the government takes over mortgage portfolios, it's likely there'll be at least temporary halts to foreclosures and massive efforts to "work out" the terms of delinquent loans to enable owners to make payments at levels they can afford.

For neighborhoods hard hit by foreclosures -- and the distressed owners themselves -- that will definitely be a game changer.

Nation: 30-Year Rates Fall To Five-Month Low Of 5.93%

2008-09-15T09:58:00.000-06:00

The federal takeover of Fannie Mae and Freddie Mac increased industry confidence in their future. Rates dropped sharply this past week, falling to the lowest level in five months as the government's takeover of Fannie and Freddie had the desired effect. The decline pushed the 30-year rate below 6 percent for the first time since late May. The 30-year rate hit a 2008 high of 6.63 percent on July 24 and had been above 6 percent since late May.

Multiple Purchase Offers Can Work To Buyer's Advantage

2008-09-08T10:19:00.000-06:00

During the housing boom, where demand was high compared to the inventory of homes for sale, it wasn't uncommon for a home seller to receive multiple offers from different buyers. Then, sellers were in the happy position of being able to pick the best offer that came in. Today, some buyers may find the best value by making multiple, simultaneous purchase offers on several different homes.

Normally, a buyer's purchase offer is valid during the offer period--the time stipulated for the seller to respond, say, 48 hours. If the seller signs the offer, a contract is created.

For a buyer to make several simultaneous offers on different homes, the offers should always include a special clause declaring the offer not valid until the seller approves--again, within a specified time frame. In this case, the offer is validated by the seller and returned to the buyer, but the contract only becomes ratified when the buyer approves it.

In this multiple-offer scenario, sellers compete for the buyer's contract, and the buyer gets to pick the best of the counteroffers that come back approved by the sellers.

Multiple purchase offers are not for everyone. Talk with us to find out whether a multiple-offer strategy could work for you in today's market.

Mortgages: More Documentation Required

2008-09-02T10:31:00.002-06:00

The first time Jeff and Dana Prottas applied for a mortgage they weren't surprised that they might have to jump through a few hoops to get an OK from the bank, so they worked hard to improve their credit score.

So when they backed away from a complicated deal in which they tried to buy a house from a borrower who owed more than the house was worth, they thought that getting a mortgage on another, less-expensive house would be a breeze, as they had already been approved.

They were wrong. Between canceling that deal and finding a new house in Golden Valley, the mortgage markets continued to unravel, access to credit tightened and the lender who had approved them several months earlier was now asking for a bigger down payment and more detailed documentation, including photocopies of their Social Security cards.

"I was almost on my way to the doctor to get a finger pricked to give blood," Jeff Prottas said.

Though buying conditions are prime -- mortgage interest rates are still near historic lows and home prices are coming down at a steady clip -- coming changes resulting from the continuing credit crunch are going to make getting a mortgage more time-consuming and costly for some borrowers.

Tired of gloom and doom stories about the US real estate market? We are, too. So welcome to Happy Real Estate News.

2008-08-27T08:33:00.000-06:00

In real estate it's important to remember: there isn't one market out there, there are hundreds of thousands. And the factors driving these markets vary from city to city, neighborhood to neighborhood, even from street to street.

There's no denying that the mortgage meltdown has meant tragedy for many home owners. But take a look around.

You'll see there's very positive activity in many vibrant markets throughout the US. By focusing on the good news and passing the message around, we can help speed up the market recovery.

Mortgages: More Documentation Required

2008-08-25T09:13:00.000-06:00

With the fallout in the mortgage market, new requirements and higher costs will be part of equation for home buyers if they need a mortgage. However, with home prices where they are, the opportunity to buy at these lower prices may offset the effort and cost necessary to obtain a mortgage.

Arden Hills: TC Army Ammunition Plant Development To Get New Name

2008-08-19T08:23:00.000-06:00

Before development begins on the 500-acre plot that sits east of 35W and south of County Rd. I, city officials want to give it a new name in hopes of changing the public's perception of the area. Formerly the site of weapons and equipment manufacturing during WWII, the property could house condos, shops, quaint streets, parks and be called, The Ridges at Arden Hills, or Capstone at Rice Creek or Arden Crest.

Minneapolis: 100 Boarded Up Houses May Fall To Wrecking Ball

2008-08-11T14:14:00.000-06:00

After a news conference, a backhoe went to work on 2914 Dupont Ave. N, the first of scores of foreclosed houses in Minneapolis that will be razed with $1.25 million of aid from Hennepin County. The aim is to double the number of demolished and boarded properties to 100 this year and give some people hope to the patch of Minnesota most damaged by foreclosures."We need productive properties on the tax base, not shells," said Mike Opat, a Hennepin County commissioner, at the third news conference held on the block in less than five months. He pushed for the $1.25 million in aid the county is providing. The city is required to pay $875,000 back to the county by the end of 2010 for the average collection rate on demolition assessed against the properties and paid by the current or future owner.

How To Beat Your Neighbor To A Fast Sale

2008-08-04T09:20:00.000-06:00

If you're getting ready to sell your home, news reports of foreclosures, a buyer's market or slower home sales may not sound encouraging. The good news? You're not really competing with the entire world—you're competing with your neighbors!

Remember: All real estate is local. What's happening nationally, in other regions or communities, has little relationship to your local real estate micromarket, which has a buyer demand, housing supply, location and amenities that are unique to your area. Even neighborhoods within larger markets can differ a lot in home prices and the pace of sales.

Also understand that buyers typically narrow their sites to a particular neighborhood; then they zero in on the best value among the homes for sale in that neighborhood. Value means more than price—it's a combination of amenities (location, size, style, condition, conveyances, etc.) and financial considerations (price and monthly payment, closing costs, utility bills, taxes and so on).

To sell quickly today at the best price, you must show buyers that your home offers better value than competing neighborhood homes. Accomplishing that in a buyer's market calls for a creative approach. Consider the following strategies.

Price Right From The Start

Many home sellers are tempted to start their home sale with the highest listing price they could hope to get. Unfortunately for sellers, today's buyers are more educated about home values than ever before—and they're comparison shopping. In a buyer's market, a creative strategy is setting your home's price at the lower end of its market-value range, maybe even below neighborhood comparables. This attracts pent-up buyer attention fast and generates competition that could result in a full-price (or higher) offer. We'll be happy to conduct a comparative market analysis (CMA) to determine the best listing price for your home.

Maximize Visual Appeal

We've discussed in previous newsletters how important it is to create curb appeal, clean everything, declutter, remove personal items, paint and recarpet, update fixtures and repair anything that's not working properly. Those are necessary basics to home selling in today's market. Here are some creative strategies to consider:

Hire a professional to “stage” your home. Using proven design techniques, “stagers” rearrange furnishings to best complement a home's unique features. The stager may ask you to place some of your furnishings and possessions in storage or might bring in furniture to create a particular look.

Add fresh flowers for scent and color in rooms throughout the home and, weather permitting, in flowerbeds and pots outside.

Decorate dining tables with beautiful cloths or placemats and full place-settings to emphasize the entertainment possibilities of the space.

Focus on first impressions. Pay special attention to the front-door area outside and the area a buyer first sees upon walking inside.

Get The Word Out

Having your agent include your home in the local multiple listing service is important, of course, but you can do other things yourself to turn up the volume on your home-sale announcement.
Make sure your home's property flyer highlights the unique and attractive aspects of your home: upgrades to structure or systems; new appliances; energy-saving features; landscaping; etc. Enlist a child to keep a brochure box filled. Consider a map showing proximity to amenities such as public transportation, parks, schools, supermarket and so on. Include a floorplan showing location and sizes of rooms, so buyers can plan how their furniture might fit.

Use your e-mail signature to promote your home sale. Even if recipients aren't interested, they may know someone who is.

Inform your most likely buyers (first-timers, young families, empty nesters, retirees, etc.) through organizations you and/or they may be involved with. Use bulletin boards, newsletters, websites, meetings, etc.

Metro: Yes Prices Are Down A Bit But Not Everywhere

2008-07-21T08:49:00.001-06:00

Minnesota Association of Realtors CEO Christopher Galler suggests that market observers consider that in January 2001 the median house price in the Twin Cities was just $162,000. Prices soared until they peaked at $239,000 in 2006 and the current meading price of $205,000 is still considerably higher than prices 7 years ago. Re/Max's Greg Cecchetttini offers of few beams of sunlight for sellers as well as buyers, claiming that some local towns are actually enjoying a bit of a boom. For instance Bayport, on the St. Croix is sailing along just fine, with home prices up $20.5%. Average prices in posh North Oaks are reportedly up 32.3% and nearby Arden Hills can boast a 24.1% boost with a prime factor being Arden Hills' proximity to both downtowns. Not all realtors agree with such a rosy picture noting that condition of the home and the old rule of 'location, location, location' still matters in home prices

Nation: Homes Sales To Vary In Narrow Range, Then Rise In Second Half

2008-07-14T07:52:00.000-06:00

The latest forecast by the National Association of Realtors is for modest near-term movement with a recovery in sales seen during the second half of the year. The Pending Home Sales Index, a forward-looking indicator based on contract signed in May, fell 4.7 percent and remains 14 percent below May 2007. NAR's chief economist Lawrence Yun, said some pullback after a sharp increase in the previous month was expected. "the overall decline in signings suggests we are not out of the woods by any means. The housing stimulus bill that is still in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy." Yn said that location has never mattered more than in the current market. "Some markets have seen a doubling in sales from a year ago while others are seeing signings cut in half. Price conditions vary, even within a locality, depending upon a neighborhood's exposure to subprime loans." NAR President Richard F. Gaylord, said the current market offers immediate benefits and long-term value for buyers. "Home buyers are getting a great deal right now." Existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million and then increase 5.0 percent next year to 5.58 million.

Nation: May Existing-Home Sales Show Modest Gain

2008-06-30T11:05:00.000-06:00

Existing-home sales increased in May with buyers responding to lower home prices, according to the National Association of Realtors. Existing-home sales, including single-family, townhomes, condos and co-ops, increased 2.0 percent. NAR President Richard F. Gaylord of Long Beach, CA said buyers are seeing value in the current market. "Homebuyers are starting to get off the fence and into the market, drawn by drops in prices in many areas and armed with greater access to affordable mortgages." "Today's buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth." NAR chief economist Lawrence Yun, "The large supply of homes on the market clearly favors buyers and it should take several months to draw the inventory down," "Stabilization in prices can only occur with buyers returning to the market, so we are encouraged by rising sales, particularly in distressed markets." Although conditions remain mixed around the country, unpublished data shows a number of areas are experiencing much higher sales activity than May a year ago, including Sacramento, San Fernando Valley and Monterey County CA, Sarasota Florida and Battle Creek Michigan.

Nation: Boomers Buy Now, Retire Later!

2008-06-23T11:43:00.000-06:00

A buyer's market and favorable tax laws are motivating more baby boomers to buy now and retire later. Where are the hot spots? Near Water and Mountains. Minneapolis CPA Ronald Kelner's retirement is about 15 years away but he and his wife are renting out their future retirement home near Palm Springs. The Kelners are reaping the tax benefits and getting a step up on their peers that will flood the market in years to come. While most second-home purchases are for use now, the National Association of Realtors' survey shows that those born between 1946 and 1964 are more active buyers than any other group, owning 57 percent of all vacation homes and 58 percent of rental properties. the second-home market got a boost when tax laws changed in 1997, allowing owners to sell and get a $500,000 exemption from capital gains (for couples), as long as they lived in the property for two of the five years before the sale.

Metro: Market Continues Road To Recovery

2008-06-16T09:41:00.000-06:00

The Saint Paul Area Association of Realtors reports that there were 4,418 more pending home sales during the month of May compared to 4.208 in April. However, that is a decline of 7.59 percent from the pending sales of May 2007. At the end of May, there were 33,229 active single-family residential listings in the 13-county metro and at the same time one year ago, there were 35,236 active listings. The 'months-supply of inventory' peaked in December of 07 at 14 and is a measure of the number of months it would take to sell the supply of inventory at the current pace of sales. "This is a sign that the housing market in the Twin Cities continues to recover even with the challenging economic factors of high oil prices and instability in the markets," said Greg Bauman, president of SPAAR. "the market continues to perform as expected and we will see continued stabilization for the 2nd half of 2008 and into the beginning of next year."

Vadnais Heights: Council Oks Townhouses Instead Of Senior Condos

2008-06-02T11:52:00.001-06:00

The western half of the planned Arcade Estates apartments and condos for seniors, will instead become townhouses open to all age ranges. At last week's City Council meeting, developer Pat Goff's request to build 14 six-unit townhouses on his 8.5-acre site was approved. That's instead of the two three-story, 48-unit senior condos that were originally approved in 2005 on the west side of Arcade Street, just south of City Hall. According to Goff, the townhouses will be about 1,000 square feet with two bedrooms and a single-vehicle attached garage. Market value will be between $140,000 and $150,000.

Vadnais Heights: Council Oks Townhouses Instead Of Senior Condos

2008-06-02T11:52:00.000-06:00

North Shore: Residential Property Values Could Jump With Great Lakes Clean-Up

2008-05-19T09:47:00.000-06:00

A new study by researchers with the Brookings Institute claims Great Lakes cities stand to gain billions in economic benefits through lake restoration. The study says the city of Duluth alone would see property values skyrocket by 200-300-million dollars if the Great Lakes region's water quality was restored. A recent follow-up to a study released in 2007 estimates that it will cost 20-billion dollars to restore the Lakes, but the region would reap benefits valued at ten times that amount. The two larges cities on the Lakes, Chicago and Detroit, would see property values soar by up to seven-billion dollars.

The Housing Crisis Is Over

2008-05-13T11:56:00.000-06:00

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor. . New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.

Twin Cities: April's Home Sales Stats Offered Some Measure Of Comfort

2008-05-12T11:55:00.001-06:00

Here's the good news: the huge inventory of homes for sale in the Twin Cities appears to be stabilizing. The total number (which excludes new construction) grew just 1.5 percent last month, its smallest year-over-year increase in at least three years, as more sellers pulled back. New listings fell by double digits for the second month in a row, the steepest declines in many years. Plus, the pace at which pending and closed sales have been declining from last year, slowed in April and have even picked up in recent months. With 32,368 homes on the market, there is still a 10.2 month supply of homes, double the 5-month supply that's considered a balanced market. Hope springs eternal among agents. "Buyers are coming back into the market because they can see the boom and opportunity is now," says Greg Bauman, president of the St. Paul Area Association of Realtors. Kevin Knudsen president of the Minneapolis Area Association, called the drop in seller activity "A sign of hope for market recovery.

Twin Cities: April's Home Sales Stats Offered Some Measure Of Comfort

2008-05-12T11:55:00.000-06:00

Afton: Neighbors Oppose 'Pine Tree' Radio Tower

2008-05-05T11:10:00.000-06:00

Even if it does look like a pine tree, neighbors don't want to be next to a public-safety transmitter Washington County wants to put on a 1.6 acre plot in their neighborhood. Residents Frank and Susan Sando asked Washington County commissioners to tour the spot where the sheriff's office wants to construct a tower. "Nine other property owners turned it down and now we've got it in our back yard," Frank Sando said. Last month, the sheriff's office, which had previously proposed a 190-foot tower at a different Afton site, submitted plans to build a shorter tower designed to look like a pine tree. The tower is one of 14 planned for the regional digital radio system. Washington County will spend $12 million on the system to dedicate a single frequency to police, fire and medical personnel. The County Board voted this week to extend the deadline for environmental review

Blaine: New City Manager Sees Bright Future

2008-04-28T09:43:00.000-06:00

Blaine: New City Manager Sees Bright Future
Crookston native Clark Arneson was stunned to learn that in one of Minnesota's fastest-growing communities, you can still hunt deer and ride snowmobiles! After working 20 years in Bloomington, Arneson comes to the Anoka County suburb that seems to have it all: established commodities in the National Sports Center and TPC golf course, open land, close proximity to the cities and an airport that's undergoing a $35 million refurbishing. Once considered the future home of the new Vikings stadium and the $1.6 billion Northern Lights complex, Blaine is moving in a new direction.

2008-04-24T09:24:00.000-06:00

Curb Appeal: 17 Ways to Get Buyers Inside the Home

We all have had that experience where you drive up to a house and don’t even want to go inside. It’s an immediate “un-appeal.” In today’s market where lots of choices in housing are available, why should they?
Here are some easy, inexpensive fixes that will help create that outside appeal and get you one, giant step further to a sale.

1. Paint or stain the front and garage doors, especially if they show any weathering. These are the first visuals where a potential buyer focuses. If garage doors are metal and dented, they may need to be replaced.
2. Any old, basically abandoned sheds or small structures, must be removed, the area graded and the grass replaced.
3. Change any dated, outside light fixtures.
4. Fix that driveway. If it is blacktop, make sure cracks and crumbling areas are dug out and filled and then the whole driveway sealed. If it is cement, have large cracks filled and repaired professionally. The buyer must at least feel they can drive the moving truck in confidently!
5. Make sure landscaping bricks are in their proper placement. Mowing, weed-whipping sometimes moves them and this is something the homeowner rarely notices, but makes the property look unsightly.
6. Fill in bare dirt under large shade trees. Plant shade-tolerant plants in defined planters or groundcover. Landscape properly for that area.
7. All landscaping beds should be cleaned out and updated for the time of year it is in your region. Place new bedding material down.
8. Have trees and bushes pruned and trimmed. If a bush or tree is looking old or about to expire, remove it and replace it with a similar size and type if you can. If there is a tree limb(s) over the roof, have them removed.
9. If the house needs painting and a full paint job is not in the cards; have it touched up professionally in the worst, most visible spots. Paint shutters and fix them if they are hanging crooked. At least this may help get your client in the front door, even if they negotiate a full paint job into the sale later.
10. If the house is sided, have it power-washed and have gutters and windows cleaned. Window cleaning inside and out makes the house feel updated and fresh, rather than old and dingy.
11. Make sure grass is in good shape, weeds are removed, trimming done regularly. So many sellers fall down on this job the minute the house is listed, and this is critical to selling a house quickly, especially one where the owners have already moved out. In snowy climates, removal must be done regularly too. If owners have moved out, make sure you have an HWA Home Warranty to re-assure buyers.
12. Keep garbage and recycle containers inside the garage, along with all toys and equipment. Make sure the garage is neat and organized. Painted walls and floors also go a long way in this area and are inexpensive to do.
13. Decks should be washed and repainted or re-sealed; plantings around them cleaned, weed-free and looking good. Patio furniture should be in excellent condition. Even though it is in the backyard, this is the area where the family can envision enjoying the warm days and the new yard.
14. If the roof has missing shingles and they can be replaced inexpensively, suggest this be done as it may save negotiation over a completely new roof. Roof repair needs and costs should be minor or the homeowner might as well replace the entire roof.
15. If the homeowner wants to do a bit more, suggest solar lights lining the driveway or installing a more attractive front door with lead glass inserts and replacing plain doorknobs with something more custom.
16. If you have an evening showing, make sure lights are on outside and inside the house. This is warm and inviting.
17. If it’s a holiday season, by all means decorate the home! Just like sugar cookies or vanilla scent on the inside of the house, this really says “it’s a home” and I can see myself enjoying life here! In the least, always have some greenery or flowers for the season on the front step or porch; even a birdbath with a little garden around it says home.

Remember, most home buyers cannot visualize even these simple changes and clean ups in a house and the ones who can, will be looking for a reduced price. So to sell the house at top dollar and quickly, make it “appeal” to the many who will be seeing it rather than the few who are looking for a “fixer upper.” These people know what they want, go after it and need less assistance.

Finally, have neighbors or friends look at the finished results to see if you or the home owner has missed anything key that would be quick and easy to do. Use this article in your listing presentations so they can get started right away on these easy, inexpensive fixes and adapt the ideas to their home. When that home looks fabulous, update that picture on the Internet! This is especially important if the season has changed too and it’s a reward to your client too!

Metro: Development And Defiance On Metro's Final Frontier

2008-04-21T10:06:00.000-06:00

Julie Zignego is one of thousands of landowners caught in a growth boom along I94 from 494 to Hudson, wondering whether she should sell her land to developers. The rural suburbs thought they would never be as congested as 'another Woodbury', but by 2030, Washington county is expected to have 165,000 new residents--which is like three Woodburys! while most farmland in the area sells for about $9,000 an acre, farmland near the freeway is now worth 10 times that. Zignego's neighbor sold his 121 acre farm to a developer for $8 million that he had bought five years ago for $250,000. The growth is spreading millions of dollars unevenly, creating jealousy and anger. It is turning sleepy towns into battlegrounds for developers and preservationists. Neighbors are pitted against neighbors, builders against farmers and towns against their oldest residents, who's way of life was set in the 1800's.

Current Housing Market Favors Buyers

2008-04-17T09:40:00.000-06:00

Happy Spring!
The Minneapolis Area Association of REALTORS® (MAAR) just reported that the Housing Affordability Index jumped to 155 in early April, a 10.9 percent increase over April 2007. This means that home ownership is well within the means of the average home buyer in the Twin Cities metro area.
Interest rates are still at historic lows, which is giving consumers more buying power. Fixed-rate conforming loans with no points are being offered by local lenders with rates in the high 5 percent range for 30-year loans and in the low-5 percent range for 15-year loans.
The recent interest rate cuts and subsequent reductions in mortgage rates are significantly improving prospective homebuyers’ ability to afford a home, and are allowing them to purchase more amenities in a home than they thought possible. For example, with a 1.5 percent reduction in interest rates on a $250,000 home, a buyer could purchase a home that costs 14.5 percent more (with 80 percent financing and using the same down payment).
Another positive development is the economic stimulus package that will give consumers a welcome rebate and that raises the FHA loan limits on homes bought through the end of the year. In the 13-county metro area, the FHA limit for one unit was increased from $271,050 to $365,000, in Cook County (Minnesota) it was increased to $296,250, and in other parts of the state it was increased to $271,050. FHA loans are a great alternative to sub-prime loans, and the higher limits should provide more options for consumers and allow even more first-time homebuyers to enter the market.
Our area also has a large supply of homes for sale, which is giving buyers more choice. The inventory levels are the strongest for starter homes, which is great news for first-time home buyers. According to MAAR, in early April compared to April 2007 there were 150.3 percent more homes priced under $120,000, 55.8 percent more homes prices from $120,001 to $150,000, and 21.2 percent more homes priced from $150,001 to $190,000.
A recent issue of Time magazine included a story entitled “Ignore the Headlines” by Dan Kadlec that confirmed that now is an ideal time to purchase a home. The author referred to the renowned money manager Peter Lynch and noted that in Lynch’s view, “A top reason to not buy stocks is if you don’t already own a home—in which case that should be your first investment, since an owner-occupied home is nearly always profitable.” The article noted, “Let’s say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It’s time to get serious—before an inevitable rise in interest rates wipes out your advantage.”
So the message to prospective homebuyers is clear. There is a plentiful supply of homes for sale, financing is available at attractive rates, homes in our area are affordable, and higher loan limits are giving buyers even more options including the ability to purchase a higher priced home. Buyers need to act now so they will be able to enjoy the best of all possible circumstances.

Metro Area: Surplus Sales Boost Housing Market

2008-04-14T11:31:00.000-06:00

What Buyers are finding is a lot of choices and lots of room for negotiation! Plus, interest rates are still low so what has changed? Falling homes prices, and several houses on the market for every buyer, not the other way around. Stricter mortgage standards mean that lenders are verifying borrowing power. A year ago, no downpayment? No Problem! Today? Not so simple! MN Mortgage Association President Tom Bendel said 100 percent financing has all but disappeared. He advises borrowers with good credit seeking a conventional loan to come to the table with a 5 percent down payment. borrowers with credit scords below 700 may need a down payment in two figures. Where even poor credit could get you a house a year ago, buyers may need an FHA loan, with loan limits having been increased through the end of the year in the Metro to $365,000 (with the rest of the state at a $271,000 limit). A year ago, buyers could make an offer that sellers couldn't refuse. Today? Buyers take their time and offer 10 percent less but they need to count on their financials being thoroughly checked out. Buyers in today's market can afford to be conservative and buy smart.

Metro Area: Surplus Sales Boost Housing Market

2008-04-07T10:05:00.000-06:00

Minnesota: Home Sales Rise 2 Percent In January

2008-03-31T09:51:00.000-06:00

There is good economic news on the housing front. Nationally home sales rose 2.9 percent from January to February and Minnesota also saw its first real sign that real estate may be on the rebound. Seller, Molly Evans of Lakeville, put her home on the market for a while but took it off recently. She then put it back on after a $25,000 price drop. Her Realtor also created a personalized Website just for her home. Since then showings have skyrocketed. Greg Bauman, president of the the St. Paul Area Association of Realtors, said sellers have a lot to celebrate. "Our numbers are actually higher on the rebound when you look nationally right now. Pendings are up three to four percent nationally compared to the Twin Cities, which are up 20 percent. That's a significant change or difference from the total nation.

Minneapolis: Developers Preaching Patience With Condo Projects

2008-03-24T10:02:00.000-06:00

Tom Lohmann of Pinehurst Properties has big plans for his condo project in SW Minneapolis at 3500 50th st W. Lohmann has been pitching the site as the future home of The Bancroft Condominiums, a high-end project just a few blocks from Edina. Bancroft LLC paid $3.5 million for the 1.6-acre site in December 2005. Lohmann isn't expecting to get much traction until next year at the earliest. " We don't want to make the mistake of going ahead with a project in a market that's just limping along...We're just biding time and hoping for a resurgence in the market." Lohmann has sold 8 of the planned 52 units and deposits have been refunded to some buyers who couldn't wait for an uncertain delivery date. Unit prices at The Bancroft with pricing at $510 per square foot range from $583,000 to more than $2 million for a penthouse. Downtown projects, the Nicollet and the Penfield are still on the drawing board until the market tides turn.

Nation: NAR Campaign Relates Long-Term Investment Value Of Real Estate

2008-03-17T13:13:00.000-06:00

Beginning this year, the National Association of Realtors is reaching out to consumers with the facts about homeownership and the value of real estate as a long-term investment. The new advertising campaign will provide current, relevant housing data to help prospective buyers make informed decisions. Over the past 30 years, the median price of existing homes has increased an average of more than 6 percent every year and home values double nearly every 10 years. A Federal Reserve study has shown that the average homeowner's net worth is 46 times the net worth of the average renter. Despite positive research reports, some potential buyers are being kept on the sidelines as they react to national media reports about the market. "Nobody buys a home in the national real estate market," said NAR President Dick Gaylord. "All real estate markets are local and buyers and sellers who are thinking about making a move should consult with a Realtor in their local market." According to NAR's most recent forecast, existing-home sales are likely to total 5.66 million in 2007, the fifth highest on record, rising to 5.70 million in 2008 and 5.91 million in 2009. Existing-home prices are likely to be down 1.9 percent in 2008, hold steady in 2008 and rise 3.1 percent in 2009.

New Brighton: City Seeks 'Plan B' For Northwest Quadrant

2008-03-10T12:14:00.000-06:00

The project is about $12 million in the red and New Brighton is concerned about the future of 100 acres of land at the NW corner of Interstates 35W and 694. The plan is to turn old industrial sites into offices, hundreds of new homes, stores and parks. So far, $85 million has been spent on the project but spiraling environmental costs and and the recent pullout of a major housing developer have raised concerns among some officials. Newly elected Council Member David Phillips wrote a resolution in January recommending a task force to study the situation but Council Member Mary Burg thinks the focus should be on attracting developers instead of analyzing finances. Mayor Steve Larson declined to voice his opinion on the task force. Cleanup of contaminated areas has already cost the city millions and questions remain as to the land being safe for building homes.

Attention all buyers:

2008-03-07T11:23:00.001-06:00

The housing market will continue its downward spiral, forecasts say, and that means opportunities for buyers. But waiting for the market bottom may not be the smartest strategy. Here are 5 reasons to buy now
5 REASONS TO BUY

1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price.

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.

4. You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.

5. You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.

Best Home Selection. Ever.

2008-03-03T13:27:00.002-06:00

Forget the negative hype about the housing market. There is an excellent inventory of homes for sale. If you are wondering whether you should purchase a home, consider these facts:

• As of Dec. 3, 2007 there were 33,146 homes for sale in the Twin Cities metropolitan area compared to only 30,183 homes for sale at this same time last year, according to the Minneapolis Area Association of REALTORS®. That’s 9.8 percent more choice for home buyers!

• There is a wide variety of high quality homes available in all price ranges and communities in the Twin Cities. You can choose from new construction, existing homes, starter homes, luxury properties, condominiums, co-ops, townhomes, and lofts.

• The greatest opportunities are with single-family detached homes. In November of this year, there were 12.9 percent more single-family homes for sale than in November 2006.

• First-time homebuyers looking for a great starter home will be pleased with the numerous choices. This November compared to last November, there were 100.4 percent more homes priced under $120,000, 47.5 percent more homes priced from $120,001 to $150,000, and 19.7 percent more homes priced from $150,001 to $190,000.

• The inventory of homes priced at $1 million and above was 18.5 percent more this November than last November. This provides tremendous opportunities for consumers interested in purchasing upper-bracket homes.

• Real estate is one of the best and safest long-term investments. Over 10 years, a $10,000 investment in the stock market at a normal 10 percent market rate of return would yield nearly $16,000. Compare that to a 5 percent ($10,000) down payment on a $200,000 home at a normal appreciation rate of 5 percent over the same 10 year period. Through the power of leverage, your return would be $125,000—nearly eight times the stock market return.

• Homeowners benefit from favorable tax laws, including deductions on mortgage interest and property taxes and up to $500,000 in capital gains tax exemptions on personal residences at the time of sale.

With the best home selection ever, you’ll wish you bought today.

Nation: Structured Sales Provide Alternative To 1031 Exchanges

2008-02-29T14:10:00.000-06:00

A 1031 exchange is a way of deferring capital gains tax on investment property by 'exchanging' it for another investment property with the exchange going through the hands of a qualified intermediary and not your own hands). If that lake cabin doesn't qualify as an investment property under the IRS regulations or if your gains on an apartment building are more than your new property is worth, or if you don't want your money in real estate again, what can you do? "Structured sales are not for everyone but it's a tremendous strategy for people with highly appreciated properties" says Niel Friedman of Investment Property Exchange Services Inc. Patterned after structured settlements that are common in liability law, both are ways to break a large lump-sum payment into an annuity or installment payments over several years or a lifetime. The option has been around for a few years but it is just being introduced into the local market. Friedman says that a classic situation for a structured sale is one in which someone may have owned a lake property for 21 years but it doesn't qualify as an investment property under the 1031 exchange rules. The couple might sell the cabin and create annuities for themselves and their children. The result is to earn a return, spread out the tax burden and lock in payments to their children.