Featured Listing - Nokomis 2 Story Colonial!

NEW FEATURE!

LISTING OF THE WEEK

Lost in all of the GLOOM and DOOM reporting of the local housing market is the SIMPLE FACT that there some GREAT DEALS for Buyers in the current market.

In an effort to flip the script and get some positivity I have decided to start a new feature here where I put the spotlight on a different listing each week. Your comments on price and condition,as always, are welcome!

4813 15th Ave S

Open this Sunday 1-3

CLICK HERE FOR MORE INFO!

CLICK HERE FOR 360 Tour!

MLS REMARKS: Beautiful 2-sty traditional Colonial w/excellent curb appeal. Demand area 1/2 blk off M'haha Pkwy. Over $35K in new low-maint prof landscaping! Hdwd flrs, charming Oak built-ins, piano windows, updtd kit, 3 BR on 1 lvl, 3-season PO & new paver patio. LISTING INFORMATION (Last Updated 10/23/2007 12:47 PM):

County: Hennepin		Foundation Size: 616 Sq. Ft.
Number Bedrooms: 3		Subdivision: Boulevard Terrace
Baths (Full & Partial): 2		Year Built: 1926
Approx. Sq. Ft.: 1320		Exterior Type: Metal, Vinyl
Garage		Property Style: 2 Story
Property Type: Single Family		Stories: 2
Lot Size: 0.11 Acres

SCHOOL INFORMATION:

School District: MINNEAPOLIS - 1

ADDITIONAL INFORMATION:

Above Ground Square Feet: 1320 Sq. Ft.		Development Name: Boulevard Terrace
Finished Area: 1320 Sq. Ft.		Sewer Type: City Sewer - Connected
Water Type: City Water - Connected

INTERIOR FEATURES:

Appliances: Dishwasher, Disposal, Dryer, Exhaust Fan/Hood, Microwave, Range, Refrigerator, Washer		Cooling Type: Window Air Conditioning
Floor Styles: Hardwood, Tile		Heating Delivery: Other
Heating Source: Gas Heat

Basement Description: Full Number of Fireplaces: 1 Fireplace Description: Living Room, Wood Burning Handicap Features Description: None Additional Interior Features: Kitchen Window, Local Area Network, Multiple Phone Lines, Natural Woodwork, Washer/Dryer Hookup, 3 BR on One Level

ROOM INFORMATION:

Bedroom, Upper	14x10 Feet
Bedroom, Upper	12x9 Feet
Bedroom, Upper	18x10 Feet
Dining Room, Main	12x11 Feet
Kitchen, Main	11x11 Feet
Living Room, Main	21x11 Feet
Three Season Porch, Main	17x12 Feet

Number of Full Baths: 1 Number of 3/4 Baths: 1 ADDITIONAL ROOM INFORMATION: Dining Description: Eat In Kitchen, Separate/Formal Dining Room Bath Description: 3/4 Basement, Upper Level Bath

EXTERIOR FEATURES:

Garage Spaces: 2		Parking Description: Detached Garage
Patio		Roof Type: Asphalt

LOT FEATURES:

Lot Size: 0.11 Acres

Lot Dimensions: 122x40

Fence Description: Wood
Other Lot Features: Road Frontage- City, Curbs, Paved Streets, Sidewalks. City Bus (w/in 6 blks)

COMMUNITY AMENITIES:

Amenities: Bus Line

FINANCIAL CONSIDERATIONS:

Assessments: $0		Homestead
Price: $349,900		Tax Amount: $4,086
Tax Year: 2007		Tax/Property ID: H1402824130048
Terms: Cash, Conventional, DVA, FHA

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Buyers remain firmly in the driver's seat in the Twin Cities housing market, but sellers have begun to do a little backseat driving. Over the past three months, sellers have put 6.0 percent less homes on the market than they did for the same period last year. And for the week ending October 13—our most recent reporting period—they put 7.9 percent less homes on the market. While inventory is still at record highs and sellers are still competing for a smaller pool of buyers, signs of slowing seller activity are welcome news for an oversupplied housing market.

Newly signed purchase agreements (pending sales) for the last three months have declined by 20.5 percent relative to the same period in 2006, with the most recent reporting week seeing an 18.3 percent decline. The total number of active listings on the market has begun its annual autumn drop, with incremental dips each week for the last 5 weeks.

To get a simple and easy-to-understand look at overall conditions in the Twin Cities housing market, take a gander at our Monthly Indicators tool.

The Long View

Lawrence Yun, Chief Economist of the NAR has this to say about the current Real Estate Market:

“How much have real estate investors lost due to the housing market bust?”

That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.

Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.

Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom. That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.

A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. REALTORS® are feeling the pinch as well. The median income of a typical REALTOR® has been falling due to the correction in sales transactions. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead.

Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600. No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.

The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so. Caution is in order, however. As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.

Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed. Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.

As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.

Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.

The Airport Noise Settlement has been APPROVED!

Minneapolis Approves

Airport Settlement

$127 million Agreement Provides Airport Noise Protection for 9,560 Metro Homes

Oct. 16, 2007 (MINNEAPOLIS) –Minneapolis Mayor R.T. Rybak today signed the unanimous City Council action to approve a proposed settlement that will provide significant and meaningful relief from airport noise pollution for residents in the cities of Minneapolis, Richfield and Eagan.

“More than 9,000 residents, most who live in Minneapolis, will now get significant protection from airport noise pollution,” Mayor Rybak said. “That was part of the original deal for expanding the airport more than a decade ago. When that promise was broken, we stood up for our citizens and today we delivered for those people who have waited too long for justice.”

“This forever changes the relationship between an airport and its surrounding neighborhoods that were ignored for too long,” Rybak added. “The airport is critically important to this city and state and we want it to succeed, but that success needs to be accomplished in partnership with the people and neighborhoods most affected.”

The settlement stems from an airport noise lawsuit brought in 2005 against the Metropolitan Airports Commission (MAC) by the three cities and the Minneapolis Public Housing Authority. The $127 million settlement provides $100 million more in noise relief than the MAC originally offered and is nearly double the amount in a proposed settlement of a separate class action lawsuit.

“This settlement has been a long time in the making and provides significant noise relief for the residents of South Minneapolis,” said City Council Member Scott Benson (Ward 11). “As with any compromise, it is acceptable but not fully satisfactory to either side. While not everyone who was promised full relief will receive it, this settlement provides more homes with more benefits sooner than any other alternative.”

“This isn’t about putting money into people’s pockets,” said City Council Member Sandy Colvin Roy (Ward 12). “This money will be invested into Minneapolis’ housing stock, which is an essential part of the city’s infrastructure. Sheltering the most affected residents from airport noise will stabilize parts of the community, and in the process will benefit the city as whole.”

Richfield and Eagan will consider the settlement at their respective city council meetings tonight. Mayor Rybak said that he looks forward to working with leaders in all three cities to communicate the impact of this settlement for the affected residents.

If approved by all three cities, the settlement also requires that three conditions be met:

Judge Stephen Aldrich must approve the proposed consent decree.
The Federal Aviation Authority (FAA) must sign off on the settlement no later than November 30, 2007.
Plaintiffs in the separate airport noise class action suit must structure the terms of their settlement in a manner consistent with the cities’ lawsuit, and this must occur within 90 days of the issuance of the judge’s consent decree.


The proposed settlement agreement between the cities and the MAC offers significant noise relief to airport neighbors. Specifically, the settlement calls for the MAC to:

Provide noise protection to homes in the 63-65+ DNL (day/night noise level) in the 2007 noise contour. There are around 450 homes in this DNL eligible to receive a 5 decibel noise reduction package. To reduce jet noise by 5 decibels inside a home, noise mitigation may involve air conditioning, wall insulation, new windows and doors, roof baffles, furnace, ductwork, etc. This work would occur between November 1, 2008 and December 31, 2009.

Install central air conditioning in one, two and three-family homes in the 60-62 DNL noise contour created in 2007 if they do not have air conditioning. These homes would also receive insulation and other noise mitigation improvements up to a value of $4,000 from a pre-established menu of possible improvements. Households in this noise contour that already have air conditioning would be allowed to select from a pre-established menu of improvements up to a value of $14,000. The noise protection menu to be established in the future would likely include items such as insulation, sealing and caulking, acoustical windows, etc. This work would be done between December 1, 2008 and December 1, 2012. This noise contour encompasses more than 5,340 eligible homes.

Install permanent, through-the-wall air conditioning units and acoustical air conditioning covers in apartment and condominium buildings in the 60-64 DNL noise contour. Roughly 1,930 units are located within this 2007 noise contour. This work would be done between December 1, 2008 and December 1, 2010.

Provide an estimated $6 million to cover the costs of noise mitigation work for homes located between the 2007 and 2005 60 DNL noise contours. This could include up to 1,835 homes. Reimbursement would only be provided for work done after the date of the settlement, not for past noise abatement improvements.

The noise mitigation work outlined in the settlement includes an inflation factor to cover rising costs for future work over the next five years. Additional terms of the settlement agreement call for MAC to pay $2.25 million to the plaintiffs for reimbursement of attorney’s costs.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Despite an environment of improving affordability, motivated sellers, low interest rates and a large amount of homes to choose from, buyer hesitancy in the Twin Cities and national housing markets continues. While enjoying a nice rebound from the previous tepid weeks, Twin Cities pending sales were behind this time last year by 20.9 percent for the week ending October 6. New listings on the market were even with last year for the same time comparison.

This week's edition of the MAAR Weekly Market Activity Report features an updated October 2007 Months Supply of Inventory figure of 9.9 months. This means that it will take the current inventory of homes on the market roughly 9.9 months to sell through completely. The largest growth in supply in the last year has been in the lower price ranges.

Click the logo for more info!

New Monthly Market Update

Edina Realty now offers a concise, easy to digest Monthly Market Update. You can see the highlights above or click here for this months report.

One of Every 16 Americans is Buying a Home This Year

One of Every 16 Americans is Buying a Home This Year!

That really floor me when I read that stat! I had to repeat it! Also, according to the NAR's head number cruncher Lawrence Yun, 2007 will end up being the 5th highest year on record.

OK can you tell I am searching for a silver lining? Well, while I am at it here's a few more gems from Yun:

Mortgage Rates Will Stablize Favorably
Despite the headline news coverage of turmoil in the mortgage market, mortgage rates have actually been falling for borrowers who take out prime conforming loans. Because these borrowers account for the majority of home buyers, affordability conditions for most buyers have improved. FHA loans – the traditional financing vehicle for low-and-moderate income households – have also begun to build market interest and momentum. FHA loans offer very attractive rates nearly comparable to those of conforming loan rates and save homeowners a bundle – about $180,000 in lower interest payments over a 30-year loan cycle compared to high-interest rate subprime loans. A near-certain legislative change that will allow higher FHA loan limits in high cost areas will further free up the mortgage market to offer safer alternative products (i.e., FHA loans) and away from subprime loans. It is important to note, though, that subprime loans may make sense for some home buyers such as young couples with large income potential but little downpayment. But the subprime market share at most should be no more than 5% rather than the 20% market share of recent years.

While mortgage rates look good for conforming and FHA loan clients, the same is not true for jumbo loan borrowers. Without the backing of a guarantee by Fannie Mae and Freddie Mac, bond investors are shying away from jumbo loans. As a result, interest rates on these large loans have increased and will significantly hold back home sales in the high cost housing areas like California. The whiplash will be short-term, however. After sorting through the numbers, bond investors will likely conclude that jumbos are quite safe – even without the government guarantees. A million dollar borrower generally has solid credit and pays bills on time. Any temporary legislative change in raising the loan limit well above the current $417,000 or in permitting the GSEs to purchase jumbos loans to include in their portfolios will mitigate the crisis. (The median prices will artificially trend lower during the period of jumbo loan crisis just due to fewer higher priced home sale transactions).


Pent-Up Demand Will be Unleashed
Consider this – four million net job additions in the past two years during the housing market slump. Yet, home sales have fallen. As home sales fell, people doubled and tripled up because apartment rents increased at their highest pace in five years. These people are waiting to buy a home. Then there are the approximately two million marriages that occur each year. Those newlyweds are waiting to buy a home. About four million babies are born each year – forcing some families to consider trading up from a smaller house or condo to a larger one.

Homebuilders Take Heed
The inventory of both new and existing homes is at high levels. Builders have already cut back production and are encouraged to cut back even further. The market needs less inventory additions in a time of transition. Wall Street should and will punish any builders who add to inventory in the current market. Why build only to lose money on the home? With builders cutting back, inventory will fall. Some home owners of vacant homes will also consider the juicier rent growth and take their “empty” home off the market. In addition, many owners are in a no hurry to sell their home that they actually occupy (except perhaps for those in the few areas of the country that are losing jobs), and they may also choose to delay listing their home for sale or de-list it. Unleashing of that pent-up demand for home buying will also eat into inventory.

Drawing Down the Inventory
The law of (lower) supply and (higher) demand will then firm up home prices. The media will be forced to report on the price gains. Many potential buyers, with solid financial wherewithal, will regain confidence. The wheels of housing turn faster and faster. The full unleashing of the pent-up demand could mean about two million additional homeowners. Such absorption into the marketplace will bring down the current existing-home inventory of four million units and the new home inventory of one million units to a total of three million homes (new and existing) available for sale. That level of inventory equates to a 5-6 months’ supply – generally considered a balanced market condition.

Balanced Gains Ahead
As the housing market recovers, potential home buyers (both first-timers and repeat purchasers) will gain more confidence in the housing sector. This, in turn, will drive more demand for homeownership, helping to keep inventory at or slightly below market balance and spur additional increases in home price appreciation. In sum, a closing of the subprime market does not directly mean equally lower home sales. FHA/VA and conforming government-backed loans will pick up a large chunk of the former subprime market. The jumbo loan concerns will be mitigated over time with better market knowledge, and will be assisted by changes in legislation permitting higher loan limits. Pent-up demand is strong. Inventory will move in the right direction. Builders are assisting by holding back production. A market recovery in 2008. Back-to-the-historical norm in 2009.

Good News/Bad News -Less Buyers/Better Buys

This latest Press Release from MAAR addresses the most recent Market Statistics

Tighter Credit Standards, Typical Fall Slowdown Shrink Buyer Pool

Housing Affordability Improves

Minneapolis, Minnesota (October 10, 2007) – Tighter credit standards are a factor in the recent decline in home sales in September, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. Buyer activity fell in an environment of abundant choice, improved interest rates and motivated sellers. Newly signed purchase agreements (pending sales) in September fell relative to the same month last year by 24.4 percent, posting 2,839 unit sales. Similarly, closed sales are down 22.6 percent for the same time comparison.

“The consumer’s interest in real estate is always strong, as evidenced by the popularity of real estate shows on television,” said Deb Greene, president of MAAR. “We see motivated buyers and sellers in our market, but at the same time we’re now experiencing a return to more traditional, stricter lending practices that were in effect before the boom.” Greene also stated that lenders are placing more scrutiny on appraisals, income, employment history, and other factors, which is resulting in reduced home purchasing power for some buyers.

Builders and sellers continued to pull back in response to the market. New listings in September were down 9.4 percent from September 2006, the eighth consecutive month of year-over-year declines in listings. Year-to-date, there has been 3.2 percent fewer homes placed on the market than this time in 2006. This is good news for thinning out inventory and returning to a more balanced market.

The median sales price in September was $225,000, down 2.1 percent from last year. The Percent of Original List Price Received at Sale also declined slightly to 94.2 percent. Nationally, home prices have increased for the first time in 13 months, according to the National Association of REALTORS®. “In this buyer’s market, sellers should listen to buyer feedback and the honest and frank pricing advice of a professional REALTOR®,” said Greene.

Interest rates are near 45-year lows and declined further in September, and the MAAR Housing Affordability Index improved to 131 in October—both encouraging signs. Improvements in affordability will help lay a healthier foundation for the eventual market turnaround.

Kevin Knudsen, president-elect of MAAR said, “We need to remember that there are still positive changes taking place. Affordability is improving, the lending environment is returning to solid fundamentals, interest rates are still historically low, and buyers now have a golden opportunity to purchase a home. A time of ‘crisis’ often turns out to have been a time of opportunity in hindsight.”

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

With consumer confidence in residential real estate in the doldrums, the Twin Cities housing market is seeing a new downward surge in home sales in recent weeks. For the week ending September 29, new purchase agreements (pending sales) fell from the same week last year by 33.1 percent. This is on the heels of a 26.3 percent drop last week vs. the same week in 2006.

The downward velocity in buyer activity appeared to have bottomed out in the first half of 2007, but August and September have shown further decreases as uncertainties in the mortgage industry have intensified. Keeping a close eye on real estate activity in the weeks ahead will give us an indication of where this road will lead. Thankfully, the decline in seller activity has also accelerated, with new listings down by 15.7 percent for the same time period.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for our Housing Affordability Index (HAI) and the Percent of Original List Price Received at Sale. The HAI increased 4 points to 131 due to a slight drop in interest rates and home prices. Affordability is essential to the future health of our market, so this improvement is greeted with optimism. The Percent of Original List Price Received at Sale dropped slightly to 94.2 percent, and should continue to decline as the annual winter slowdown creates additional short-term downward pressure on home prices.

Want to see how localized submarkets are being affected by the changing market? Take a look at "The 100," our free monthly market update tool for over 100 Twin Cities communities, including the interior neighborhoods of Minneapolis and Saint Paul. It has just been updated with new data through September.



Click here to access "The 100."

Went to a Garden Party...

Took my darling Lily to her first birthday party last week for her friend Ezra. She and I had a great time on this father daughter outing. When you first have a child you really have no idea of the challenges -and joys- each day will bring. This pic was taken by Allison Kuznia - Thanks Allison!

Pending Real Estate Sales Index at "Lowest Ever"

I would laugh if didn't actually make me CRY but the news just keeps getting worse and worse for the real estate market.

To wit:

The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.

August's reading of 85.5 was below analysts' expectations and the lowest ever for the index, which started in January 2001. Analysts surveyed by Briefing.com had predicted the index would fall by 2 percent from July.

Wow. This is approaching historic (and hysteric!) proportions! Since the "Index" only dates back to the already booming year of 2001 it really is not THAT big of a deal. Still, all indications are that we are in a market that is in a state of Free Fall and there really is no end in sight. It will be interesting to see where we are once the dust settles, say in 2 or 3 years!

In the meantime, there are incredible deals for Buyers out there. And if you're a Seller priced RIGHT you will do quite well. Everyone else? As Bette Davis said in "all About Eve": "Fasten your seatbelts, it's going to be a bumpy night!"

Weekly Twin Cities Real Estate Market Activity Report

While sellers continue to list fewer homes, buyers remain firmly in control in the Twin Cities housing market. New listings on the market for the week ending September 16 were behind the same time last year by 11.4 percent, while newly signed purchase agreements (pending sales) fell by 26.3 percent for the same time period. With slow sales comes decreased inventory absorption; the number of homes for sale is 9.9 percent higher than at this time in 2006.

This week's edition of the MAAR Weekly Market Activity Report features updated October 2007 figures for our Supply-Demand Ratio (SDR) and Mortgage Rates. The SDR increased slightly to 10.47, which means there are currently 10.47 homes on the market for every buyer—a new October record. Following the key interest rate cut from the U.S. Federal Reserve, rates dropped slightly from last month to 6.7 percent. With home prices declining moderately, further rate declines would improve affordability.

Click the logo below or click here for this week's full report, and visit MAAR's Market Stats and Research page for more real estate market information.

Chilly Minneapolis is Hot With Young Professionals!

MNSpeak Rejected This So I Will Post it Here!

Chilly Minneapolis is Hot
With Young Professionals

It's always funny to see how outsiders view your fair city. This article from the Real Estate Journal is about how Minneapolis has become a HOT SPOT for 20 something professionals. The article states that "more than 11,000 adults age 20-29 moved to the Twin Cities (Minneapolis-St. Paul) from out of the state in 2005, almost double from 6,000 in 2004 according to the U.S. Census Bureau's 2005 American Community Survey. Last year's growth was slightly less frantic: 7,489 new residents moved to the Twin Cities from out of state..."

Why are the kids moving here? Apparently the fact that we talk funny, close up shop early and are pretty much a boring town are the driving forces! To wit:

"It's such a get-out-there and do something culture," says Ms. Appleton. She says that while Minneapolis isn't a "go out every night" atmosphere, she has taken advantage of cuisine, art and volunteer opportunities.

Yes. Come for the Frozen Tundra, stay for the Salvation Army!

After a year in Minneapolis, Mr. Klein says the city is still feels it's like six blocks plucked out of Chicago, but that he has adapted to the smaller circles of society. "It's not overwhelming and I like that," he says.

Reminds of the Wee Britain gag on "Arrested Development."

"(These people) are part of a recent influx of young adults in this chilly city more known for the Mall of America and funny accents than its trendy arts scene and nightlife.

Well, we like it here! Yeah sure. You bet'cha! Also, the article discusses the torture that newcomers must endure:

Newcomers also must confront the social hurdles of being a "transplant" -- a term widely used in Minnesota to describe outsiders. Adrienne LaPointe, a 29-year-old originally from Michigan, says she was warned that many Minnesotans spend their entire lives in the state, gleaning their social circles from as early as middle and high school.

"There are two separate social societies here: people who grew up in Minnesota and everybody else," she says. Undeterred, Ms. LaPointe joined more than 500 people who are part of a social-networking group started in the 1990s for non-natives called I'm Not From Here.

I was thinking of starting a support group called: You Ain't From Around These Parts, Are You?

Weekly Twin Cities Real Estate Market Activity Report

Here's this week's MAAR report:

This week's edition of the MAAR Weekly Market Activity Report features an exciting new format. We are now providing a much more readable set of graphs for new listings, pending sales and active listing inventory designed to make it easier to note important trends in the market. Additionally, our Days on Market measurement has been switched to utilize the more accurate cumulative days on market measurement, which takes into account previous listing contracts over the past twelve months. The Days on Market Until Sale for August 2007 was 135, up 25.0 percent from August of 2006.

And don't forget, our new and improved Housing Supply Outlook is now found separate from the Weekly Market Activity Report. The new format is chock-full of powerful information that tells the important stories found where price range, property type and construction status meet to create dynamic and unique submarkets. Click here for the September 2007 Housing Supply Outlook.

Housing Supply Outlook

MAAR Creates Awesome Charts!

The market may be kicking our collective behinds but MAAR continues to kick out awesome research tools.

Here is there most recent - the Housing Supply Outlook.

The stats show some interesting developments including:

Builders have dramatically decreased production in response to changing
market conditions. Total new construction inventory has fallen by 15.3 percent
when compared to this time last year.

The average price per square foot of all new construction units is down 7.9
percent, confirming that builders are reducing prices to sell their excess
inventory.

Condominuims have the highest months' supply of any property type. This
growing imbalance is almost entirely due to a large dropoff in sales of new
construction condominiums, down 37.4 percent from this time last year.
Single-family detached homes are holding their value better than other property
types. Their current supply in months is the lowest, their sales rate has declined
the least, and their average sales price is down only 0.7 percent from this time
last year.

Massive inventory growth is taking place in the lowest price ranges, possibly due
to the role of subprime foreclosures.

Champagne & Cookies!

From CNN/Money:

Fed Cuts Rates in Effort to Boost Slumping Housing Market

The Federal Reserve's aggressive half-point cut Tuesday could provide support for a slumping housing market.

A quarter-point drop had already been priced into the market for Treasury bills and other instruments tied to mortgage rates, according to Richard DeKaser, chief economist for National City Corp. The deeper cut means mortgage rates may have a little more room to fall, giving support to prices.

The Fed Funds rate affects a range of consumer loans, including home equity and mortgages. Lower mortgage rates would add to the number of home buyers able to afford to make purchases, increasing demand for properties and buoying home prices. Buyers generally care less about the actual purchase price than they do about the size of their payments. If rates drop, so will monthly debt obligations.

Interest rates for conforming loans - those of no more than $417,000 - are already reasonably low, averaging 6.31 percent for a 30-year fixed rate loan.

But an important class of loans that might benefit from the big cut: the high-ticket home mortgages known as non-conforming or jumbo loans. These loans have no guaranteed secondary market because they exceed the $417,000 cap and Freddie Mac and Fannie Mae will not buy them.

With investors wary about any loan perceived as carrying the least bit of risk, jumbo rates have risen in recent months. They carry rates about a full point higher than conforming loans. Jumbos are especially important in high-priced housing markets such as New York, California, Washington D.C. and Boston.

Jumbo rates may come down if the cut makes consumers more confident, according to Mark Zandi, chief economist for Moody's Economy.com.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Twin Cities consumers didn't do much laboring to purchase a home over Labor Day weekend, as sales activity for the week ending September 8 was down significantly. There were only 500 new purchase agreements signed in the metropolitan area during the week, the lowest number since the beginning of 2007. New listings increased slightly from the previous week, likely buoyed by post-holiday relistings.

This edition of the MAAR Weekly Market Activity Report (WMAR) features a new Months Supply of Inventory figure of 9.9 months, which means it will take 9.9 months for the inventory for sale at the beginning of September to sell through completely. This measurement takes the place of our Housing Supply Outlook, which has been expanded, enhanced and given its own spotlight separate from the WMAR. We are now able to provide detailed measurements of supply and demand by property type, construction status and price range, as well as where these important variables intersect.

Click here to view the September 2007 edition of our new and improved Housing Supply Outlook.

Click the chart or click here for this week's full report.

Mortgage Problems Dampen Home Sales

Lawrence Yun of the National Association of Realtors Assesses the Current Lending Situation

Tighter credit for home mortgages will measurably soften home sales in the short term and postpone an expected recovery for existing-home sales until 2008, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

Lawrence Yun, NAR senior economist, says unusual disruptions in the mortgage market are dampening the outlook for home sales, notably for August and September.

“There’s been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines,” Yun says. “However, the jumbo loan market is now beginning to settle, and FHA-insured loans are helping to fill the subprime vacuum. The volume of existing-home sales this year will be better than 2002, which was the second year of the housing boom.”

Housing Outlook

Existing-home sales are projected at 5.92 million this year and then expected to rise to 6.27 million in 2008, compared with 6.48 million in 2006. New-home sales should total 801,000 in 2007 and 741,000 next year, below the 1.05 million in 2006.

“A sharp production pullback by homebuilders deep into 2008 is a healthy trend that will help trim down housing inventory,” Yun says. Housing starts, including multifamily units, are expected to total 1.37 million this year and 1.26 million in 2008, compared with 1.8 million in 2006.

“The mortgage markets will calm further in the months ahead, but it’s important to underscore the fact that conventional loans — the vast majority of available financing — are available to creditworthy borrowers,” Yun says. “Patient buyers in most areas who do their homework will recognize that housing remains a good long-term investment.”

Existing-home prices are likely to slip 1.7 percent to a median of $218,200 this year before rising 2.2 percent in 2008 to $223,000. The median new-home price is estimated to drop 2.2 percent to $241,100 in 2007, and then increase 1.7 percent next year to $245,100.

Here are some other economic factors that will likely influence the housing market:

• The 30-year fixed-rate mortgage is projected to average 6.4 percent for the balance of the year and then edge up to the 6.5 percent range in 2008. “We expect the Fed to cut rates two times before the end of the year, which will lower interest rates for prime borrowers and FHA-insured loans,” Yun says. “FHA modernization could buffer the fallout of subprime loans, which would raise our sales forecast in the future.”

• Growth in the U.S. gross domestic product is forecast at 2 percent in 2007, below the 2.9 percent growth rate last year; GDP will probably grow 2.7 percent in 2008.

• The unemployment rate should average 4.6 percent for 2007, unchanged from last year.

• Inflation, as measured by the Consumer Price Index, is estimated to be 2.8 percent in 2007, compared with 3.2 percent last year. Inflation-adjusted disposable personal income is likely to increase 3.6 percent this year, up from 3.1 percent in 2006.

"Projections on the future of the housing market are like belly buttons"

Today's cover story spells out more doom and gloom for our local Real Estate market. While you simply can't deny that things have slowed, it always seems these articles come out just as the market changes. In the past it took a couple of years of high velocity sales before the media started to refer to it as a "Housing Boom" and eventually -in some circles- a "Housing Bubble."

This latest slowdown has been building for the past two years, it didn't just happen over night as the sudden prominent reporting of this issue - Front Page, Above the Fold, seems to indicate.
I think this is one reason, of many, why Buyer's are so confused about the current market conditions. Anecdotally I have seen a marked increase in the showing activity at all of my listings this week. Truth be told, in certain micro-markets where demand is high, you would never even know there was any kind of a slow down. Location is not just a cliche', it is the operating principle that everyone should base their purchases on!

Anyway here's a link to the Strib article:

Area home sales fall to lowest since '94

And here is the response issued by MAAR (Minneapolis Area Association of Realtors):

Market correction continues as buyers wait on the sidelines

Minneapolis, Minnesota (September 12, 2007) – Persistent instability in the mortgage market and a related malaise in consumer confidence continues to dampen home sales across the nation and the Twin Cities, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

Amid a flurry of national news stories on uncertainties in secondary financing markets, newly signed purchase agreements (pending sales) for August were behind the same month last year by 18.1 percent, posting 3,834 unit sales. Similarly, closed sales are down 17.8 percent for the same time comparison.

“With buyers concerned by the news they hear on housing, it’s understandable that some are waiting on the sidelines,” said Deb Greene, president of MAAR. “Our concern is that while they wait they’re missing buying opportunities when the time is right.”

Builders and sellers have taken notice that buyers are in retreat. The number of new listings on the market in August was down 7.9 percent from August 2006, the seventh consecutive month of year-over-year declines in listings. Year-to-date, there has been 3.2 percent less placed on the market than this time in 2006.

Despite this decline in new listings, the drop in sales has been even more dramatic. As a result, homes are staying on the market longer and inventory is at record highs. At the start of the month there were 34,808 homes for sale in the Twin Cities region, an increase of 11.3 percent from this time last year. This amounts to 10.39 active listings for every expected buyer for the month of September.

“Sellers need to understand what they’re up against,” said Greene. “Homes must be priced aggressively and kept in excellent condition to sell quickly.”

With sales down and inventory up, home values showed a slight decline. The August median sales price of $230,000 is 2.1 percent down from August 2006. Home sellers received 94.7 percent of their original asking price in August, down from last year at this time when the figure was 96.6 percent. Downward pressure on home prices will continue as we enter the typical fall season slowdown.

Home values have declined as the market shifts further in the buyer’s favor, but at different
velocities depending on the property type.

“Projections on the future of the housing market are like belly buttons—everyone’s got one,” said Kevin Knudsen, president-elect of MAAR. “But the only thing we know for certain is that this rebound will take some time. In the meantime, opportunity is out there for buyers.”

There Goes the Neighborhood: KILLER BEES!

When I was a kid my Grandma took me to see this movie - "The Swarm" and it scared the tar out of me. I remember she told me not to worry about it, the killer bees would take years and years to get to us. Well they have made it to Texas, and California, and now New Orleans...

At least winter will be here soon!

Killer bees’ descend on New Orleans

MERAUX, La. - Africanized honeybees, a fierce hybrid strain sometimes referred to as “killer bees,” appear to have established themselves in the New Orleans area, the state agriculture commissioner said.

A swarm of the bees was captured about five miles from where demolition workers found a colony of Africanized bees in January, commissioner Bob Odom said Tuesday.

The most recent find was close enough to the earlier find that the bees might have come from the same colony. But they might also have flown ashore from a passing ship or barge, Odom said in a news release.

“Although the exact source can’t be identified, we have to assume Africanized honeybees are now established in the area and people should be careful when working outside,” Odom said.

The Department of Agriculture and Forestry keeps traps along a north-south line through the state and at all deepwater ports to monitor the bees, which are smaller and more aggressive than the European honeybees raised for honey.

Smaller, but fiercer
“Because Africanized bees have been labeled ‘killer bees’ for years, there’s an idea around that they are bigger than European honeybees,” Odom said. “The truth is they’re actually smaller but a lot fiercer.”

They have the same venom as honeybees, but attack in groups. Experts recommend that anyone confronted with Africanized bees find cover quickly.

Africanized bees are the result of an experiment to increase honey production in Brazil. A swarm escaped a lab in 1957 and headed north. When they mated with native strains, the offspring were as aggressive as the African parents.

They reached Texas in 1990 and have spread west to California and east to Florida. They were first found in Louisiana in Caddo Parish, in June 2005, and identified the following month. They have moved steadily east since then, and were most recently found near Pecan Island and Turkey Creek.

Refi Rescue for Foreclosure?

This CNN/Money Article outlines some potential relief for those facing foreclosure.

Here's the highlights:

It used to be you couldn't refinance into an FHA loan if you'd been delinquent in your payments for any reason. But with the FHA Secure Act, delinquent homeowners qualify for an FHA-insured refi if they have:

• A history of on-time payments for at least six months before their loans reset to higher rates
• Interest rates scheduled to reset between June 2005 and December 2009
• 3 percent equity in their home, or the cash equivalent
• A sustained history of employment
• Sufficient income to make their FHA-insured mortgage payment and all other obligations

The FHA will still insist that lenders verify borrowers' income and ensure that their total debt payments don't exceed 43 percent of their income or that their mortgage payment won't exceed 31 percent of income. If those ratios are exceeded, the lender must explain how the homeowner can compensate for that.

More Good News for Metro Real Estate! (cough)

Not surprising but here's the latest Strib Headline:

Twin Cities home sales plummet in August

Is it just me or does the Strib seem rather breathlessly exuberant in their reporting of the market downturn?

Could it be some residual bitterness they are feeling having lost millions in Ad revenue due to the fact that many local companies no long shell out big bucks to advertise in the paper.

I subscribe to the Strib and I am not trying to bash them - but research clearly showed that placing ads their was not very effective.

Of course, the same could be said about a lot of marketing avenues these days...

One thing remains true:

"With buyers concerned by the news they hear on housing, it's understandable that some are waiting on the sidelines," said Deb Green, association president. "While they wait they're missing buying opportunities."

Don't miss the boat because this situation won't last forever. In fact it will be interesting to see the impact of the expected rate cut next Tuesday...

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

The Twin Cities housing market is seeing huge week-to-week declines in seller activity as we enter the fall and the school year begins again. Just four weeks ago, home sellers placed 2,324 new houses on the market for sale; for the week ending September 1, only 1,659 new units were listed. Compared to one year ago, this most recent figure is a drop of 16.7 percent. Not surprisingly, buyer activity remains stunted as uncertainties in the mortgage market and a fragile consumer psychology persist. The most recent tracked week shows a pending sales decline of 22.5 percent from this time last year.

Market Share of Local Real Estate Companies

I don't usually spend much time here shilling for Edina Realty, the company that holds my license.
But I did think this was quite interesting. People often ask me who the largest company is and I usually say that Edina and Coldwell are pretty neck and neck, depending on what numbers you choose to look at. However, it seems recently that Edina comes out on top more consistently.

In uncertain times I like to think there is safety in numbers!

Banks Prepared to Woo Borrowers with Good Credit

Banks have plenty of money available for borrowers with great credit and a desire for a conventional fixed rate mortgage, says James Chessen, chief economist for the American Bankers Association.

To attract these customers, lenders are offering fee waivers, competitive interest rates, and a willingness to negotiate.

Banks like conventional borrowers because they tend to be the kind of customers that will take advantage of other products from the lender, including savings accounts, credit cards and checking accounts. "We find that someone who has a mortgage with us will have about five products in addition to the mortgage," says Terry Francisco, a spokesman for Bank of America Corp.

To attract this kind of business, Bank of America is offering "No Fee Mortgage Plus," saving consumers about $3,000 in closing costs, which the bank covers.

Deals like this one make it important for borrowers with good credit to shop around.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Sellers and builders continue to curb activity in the Twin Cities housing market, with the week ending August 25 posting only 1,874 new listings—down 9.5 percent from the same week in 2006 and even further from their early summer peak. Despite the decline in new seller activity, the number of homes on the market remains at a record high for this time of year with 34,225 residential units for sale. This persistently high inventory is due to slowed absorption caused by sluggish home sales; newly signed purchase agreements were 18.7 percent behind this time last year.

This week's edition of the MAAR Weekly Market Activity report features an updated September 2007 figure for our Supply-Demand Ratio (SDR). The SDR grew to 10.39, which means there are 10.39 homes for sale per buyer. This is an increase of 24.8 percent from last September, and this figure should continue to grow through December before declining in 2008 with the end of the winter season slowdown.

For a thorough look at how our market is performing year-to-date and relative to the last several years, take a look at our new Monthly Indicators tool. We've revamped the design for easier use and added several years of important historical trends.

Darkest Before the Dawn?

Another day, another bleak article on the outlook of the Real Estate Market.

Take a peek:

Darkest before the Dawn? Experts Call for another Year of Down Market

Lake Harriet Band Shell

We had a nice time seeing a free concert at the Lake Harriet Band Shell this past weekend. It was a perfect venue for a perfect day. The ensemble we saw was pretty good as well - the Sprucetop Review. They played a few of our favorite Bob Dylan ("All Along the Watchtower")and John Prine ("Long Monday") and Lily had a blast crawling everywhere on the grass.

I am always amazed and grateful for all the free events available to us in the city. We really are fortunate!

Hope you had a nice l-o-n-g weekend!

Farmer Labor Train

From the high Canadian Rockies to the land of Mexico,
City and the country, wherever you may go,
Through the wild and windy weather, the sun and sleet and rain,
Comes a-whistlin' through the country this Farmer-Labor train.

Listen to the jingle and the rumble and the roar,
She's rollin' through New England to the West Pacific shore.
It's a long time we've been waitin', now she's been whistlin' 'round the bend,
Roll on into Congress on that Farmer-Labor train.

There's lumberjacks and teamsters and sailors from the sea,
There's farmin' boys from Texas and the hills of Tennessee,
There's miners from Kentucky, there's fishermen from Maine; Every worker in the country rides that Farmer-Labor train.

There's warehouse boys and truckers and guys that skin the cats,
Men that run the steel mills, the furnace and the blast,
Through the smoky factory cities, o'er the hot and dusty plains,
And the cushions they are crowded, on this Farmer-Labor train.

Listen to the jingle and the rumble and the roar,
She's rollin' through New England to the West Pacific shore.
It's a long time we've been waitin', now she's been whistlin' 'round the bend,
Ride on on into Congress on that Farmer-Labor train.

There's folks of every color and they're ridin' side by side
Through the swamps of Louisiana and across the Great Divide,
From the wheat fields and the orchards and the lowing cattle range,
And they're rolling onto victory on this Farmer-Labor train.

This train pulled into Washington a bright and happy day,
When she steamed into the station you could hear the people say:
"There's that Farmer-Labor Special, she's full of union men
Headin' onto White House on the Farmer-Labor train."

-Woody Guthrie

Time for Realtors to Face REALITY?

ARE WE THERE, YET?

The talk I keep hearing is that while things have spun 180 degrees from a Seller's Market to a Buyer's Market we still don't quite know fr sure if we have reached the bottom...yet.

Currently (and that's all that really matters) sales are on a pace that is 25% lower than last year at this time. And by all accounts last year was the slowest year anyone every remembers seeing.

So if we're not at the bottom, I sure hope we can see it from here!

This has been an extremely challenging time for all of us in the Real Estate Industry. Everyone has been feeling the pain - not just Agents - but also Loan Officers, Title Closers, Home Inspectors, Decorators, Moving Companies, Builders, the list goes on and on.

There have and will continue to be casualties. People are leaving the profession seeking something more stable, and I can't say I blame them. These are scary times.

But those of us who have been in it for the long haul and are determined to stick it out do so because we believe that this market, like all markets, is cyclical. There will be brighter days ahead.

I know a lot of people out there -especially the "Freakonomics" fans - are taking some delight in the current situation. To them, all of us over-payed agents are now getting our "just desserts." The "free ride" we have been enjoying for far to long is over. Time for "Realtors to Face Reality?"

And I can understand these sentiments to a point, only because I remember what the profession looked to me from the outside. But once you live it, and your livelihood depends on it, you really see it an entirely different light. We work solely on commission and if a deal doesn't close -for any reason- we don't get paid. We are all splitting the commissions that are paid with the participating agents and their brokerages and once we get our piece of the pie there are marketing bills to pay, taxes, health insurance, social security, transaction fees, desk fees, and any other business related expenses.

There's not an agent I know who doesn't feel the stress and strain of sweating out deals that we NEED to close from time to time, no matter how big a profile they have, the fancy car they drive (likely lease), and how "successful" they appear- you're always only as good as your last CLOSED deal.

It's definitely not for everyone.

Now I know this might sound like POOR ME and maybe it is a little bit, but I genuinely believe most people have very little idea how our job works. We put our clients first, working evenings, weekends, holidays, late into the night in an effort to provide them with the best possible service.

And sometimes despite our best efforts the deal still doesn't work out, financing falls through, a buyer get cold feet, the market grinds to a halt, a house doesn't pass the inspection...

That's when we pick ourselves out and charge back into the game again, head held high, smile on our faces, stepping back into the void and hoping, visualizing, planning, striving, working for the best.

So the next time you meet some agent at an Open House and they seem a little too friendly or a little too desperate to get you attention or your business, at least now you might know why. And maybe knowing what you know now you'll see just how determined we as Agents are to do our absolute best for you.

Well, I think that is true for most of us anyway.

I'd love to read your comments on this. Please leave them below. Thanks!

Say Goodbye to Pre-Payment Penalties?

This news from NAR (National Association of Realtor's caught my eye today:

To address subprime mortgage woes, House Financial Services Committee Chairman Barney Frank (D-Mass.) is expected to put the finishing touches on legislation upping underwriting standards for all mortgages, prime and subprime. In a main focus, the bill would subject mortgage originators (lenders and brokers) to rules similar to those that apply to depository institutions. The new rules would subject originators to a licensing requirement and prohibit loans to consumers who have no reasonable ability to repay. NAR has been working with Rep. Frank's staff to incorporate its Responsible Lending Principles into the bill, among them a prohibition on prepayment penalties, which critics say can trap borrowers in loans they can't afford.

Separately, NAR will continue to tout FHA reform as a much-needed antidote to the abusive subprime loans that have rocked mortgage markets. The reforms have bipartisan support in the House and the Senate but progress is slowed as lawmakers look at whether a national housing trust fund should be passed as part of the bill. Along with FHA reform, NAR is calling for the federal government to let secondary mortgage market giants Fannie Mae and Freddie Mac temporarily hold more loans in their portfolios than they're currently permitted. Such a move would help calm markets by signalling the companies' commitment to ensuring continued liquidity for lenders' mortgage businesses.

While I am more than a little wary that Government regulation might cripple people chances of getting loans there is no doubt that pre-payment penalties are a bad thing. It puts homeowners in a lose-lose situation way too often.

Here's more of the release:

President Bush Announces Support for FHA Reform

NAR applauded President George W. Bush's statement of support for programs that would give home owners greater flexibility to refinance their loans through the Federal Housing Administration. NAR has been advocating regulatory changes to the FHA program to help families keep their homes in light of the decline of the subprime market and impending interest-rate adjustments. In a press conference last week, President Bush signaled his support for such an effort in “making sure that financial institutions like the FHA have got flexibility to help these folks refinance their homes.” At present, FHA programs do not allow home owners to refinance if their mortgage is in jeopardy.

NAR Urges New Regulations to Combat Deceptive Lending

The financial markets are struggling with the results of abusive lending practices in the subprime market, including the collapse of several investment funds and the failure of more than 100 subprime lenders, noted NAR in a letter to the Federal Reserve. NAR urged the Board to adopt regulations that combat unfair, deceptive, and abusive mortgage lending acts and practices. Among its recommendations: NAR asked the Fed to eliminate prepayment penalties for all categories of mortgages or to bar prepayment penalties for subprime mortgages and other mortgages where abuses are found. NAR also urged the Board to require that subprime lenders mandate an escrow reserve for taxes and insurance.

It will be very interesting to see if the Fed acts on these two issues. These would have a far greater impact in terms of helping borrowers than other protectionist measures in my opinion.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

In step with national real estate market news, the corrective recalibration period is still underway in the Twin Cities. For the week ending August 18, newly signed purchase agreements (pending sales) were behind the same week in 2006 by 26.8 percent. New listings on the market are also on the decline but not as dramatically as buyer activity. Compared to this time last year, new listings decreased 2.3 percent.

As summer activity slows into the fall school season, it's time to take stock of our industry. While the big decline in buyer activity and slight decline in home prices seen in the last 18 months have caused short-term discomfort, it is essential to recognize that there is positive value in the correction taking place. Lending standards are reforming as financial markets relearn to properly assess risk, home values are softening after several years of unsustainable increases, and we are being reminded that every market requires sound fundamentals to sustain healthy growth.

In sum, the transformative changes our market is experiencing are paving the way for a better future. Through it all, the public's passion for real estate has not waned, and the undeniable financial, emotional and social benefits of homeownership are firmly rooted.

So You Want to Buy a Foreclosure....

BEWARE THE "BARGAIN" THAT IS FORECLOSURES

I hear from a lot of Buyers who are interested in Foreclosure properties. And why wouldn't they be? In a market that is already on the ropes, the Foreclosures seem like they would be the lowest hanging fruit. Juicy delicious and irresistible?

Unfortunately the reality is not always so appetizing.

For one, many times Foreclosure properties are in very rough shape, they haven't been occupied for months and sometimes they have had the heat and electricity turned off.

Who pays to get the lights turned back on? The Buyers.

Because appliances are considered personal property, Foreclosured properties often have NONE.

Who buys the new Stove, Fridge, Washer, Dryer, Microwave? The Buyer.

In Minneapolis there is a time of sale inspection (The Truth in Housing Inspection) and often time in Foreclosed properties there are a number of "R & R's" - Required Repairs that must be taken care of an reinspected.

Who does this - and pays for it? The Buyer.

Because most Lenders are awash in a sea of Foreclosures they are often unable to respond to the offers than Buyer's submit. Even if they are full price.

Also, most lenders like to play by their own rules. They like to make sure all offers include NON-REFUNDABLE Earnest Money (often 1% of the sales price and typically more). So if the Buyer loses his job and can't get financing or decides after the Inspection that the property is in need of too many costly repairs - rather than getting their Earnest Money back like in a normal sale - they lose it.

It's important that you work closely with your agent to identify properties that might be more rouble than they are worth. And Buyer's need to realize that just because a property is in foreclosure or a short sale is possible - that usually doesn't mean the Bank will unload the property for a low ball offer.

While it's true that you can get some good deals by seeking out Foreclosures you need to be realistic and make sure you can be patient while waiting for a response. You'll want to proceed with caution. And remember - foreclosures aren't the only good deal in town. There are a lot of other properties available at just as good a price for a lot less hassle.

The Subprime Shakeout Continues...

Big Players Appear on a Bad List

The Wall Street Journal Online recently published a very comprehensive list of Sub-prime Lenders that have been shut down and/or had to stop many of their lending programs.

The big names in Minnesota are Countywide, SouthStar, Wells Fargo, First Horizon, Summit, Option One, Millennium, H&R Block mortgage, Ameriquest, Maribella, New Century, Fremont, and First Franklin.

Click HERE to see the complete list.

If you currently have a sub-prime deal going with any of these...BE CAREFUL!

Rates Drop: Buyers to Bust a Move?

Mitch Yost needs to get back in the game. (Pictured are Mitch & Sissy Yost.)


Mortgage Rates Drop to Lowest Point Since May

Freddie Mac reported today that 30-year, fixed-rate mortgages averaged 6.52 percent. That was down from 6.62 percent last week and was the lowest rate since the week ending May 31, when rates stood at 6.42 percent.

This is great news for anyone trying to get a loan in the current belt-tightening environment. Hopefully this will get some of the Buyers off of the sidelines and into the game and start reducing some of the back log of inventory.

Could this be the makings of a legit Spring Market this year?

Stay tuned...

Most People Move Every 6 Years

How Often Do You Move?

According to a recent NAR Survey most people move every six years. In my experience this is pretty accurate but it will be interesting to see how this changes as the Gen X, Y, and Zer's start getting more and more active in the housing market. In an era of instant gratification whether on the Web or TiVo I think this time will become even shorter. People like to be a part of the "next big thing" and this seems to be a different set of values than the pre- and post WWII generations who valued "settling down."

Of course, the next generations make look to rent rather than buy for the same reasons. One thing is clear, the days of looking at your home like you would a stock or other similar investment are on the way out.

NAR President Pat Combs said recently:

“While local conditions vary greatly, a typical owner who bought six years ago is seeing a 45 percent increase in the value of their home. Even so, it isn’t valid to directly compare homeownership with stocks. Although a home is normally a long-term appreciating asset, it is primarily shelter – most owners sell when their needs change, not when the market turns.”

I think those of us who work as Realtors really need to pay heed to these words. We are here not to help people "make a killing in the market" as much as we are here to help people with their changing needs. Service is our primary commodity.

Don't get me wrong, I love to see people make a pile of money when they sell. Likewise, I love to negotiate the best possible deal for my Buyers. Those are both primary aspects of my job. But I am not a stock broker. I am in the service industry.

I am here to help...when you need me!