THE REAL ESTATE ECOBLOG

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This video will provide you an update on the Twin Cities Real Estate Market!

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Enjoy this video about the current Real Estate Market and feel free to call with any questions....

Buyers and Their Agents Beware....

Why is it when a bank is involved in a real estate sale, agents seem to think the rules have changed?  I find this recent trend both disturbing for buyers and frustrating for everyone.  The problem I am referring to is properties continually being offered for sale on the Multiple Listing Service (MLS) when in fact they are  sold.  This problem affects not only a buyers ability to really decide what to buy  but it also affects the days on market statistics, the average number of homes on  the market, the median sale price of homes, and on and on.  All of these statistics  are used to determine the health of the market and the information comes from  the MLS.   Needless to say this can present a problem for people in the market to buy a home or even refinance their existing home.  

During one experience working with a client, we found 7 houses that may have been right for her.  All of them are listed as active on the MLS and not until after I scheduled the showing did I get an email, phone call, or some other notification that the properties were sold.  This happened with 5 of the 7 homes I was trying to show this client.  

This is not something that is new, especially with properties that are sold subject to an inspection contiguency.  What is new is that the offer on the property could be completely negotiated signed and just waiting for closing but the seller (bank) will accept back up offers so the agents are keeping them active.  Or it is a short sale in which the seller has accepted the offer but the bank has not.  These situation would not be a big deal if it was only a small percentage of the properties on the market but this is happening in well over half the listings in certain market areas.  I am not sure what exactly makes those responsible think this is an acceptable practice and I imagine they have not read state law or our realtor code of ethics to realize that this is illegal.  

I have represented many different clients in selling foreclosed properties and other than a few addendums the bank asks buyers to sign and the homes are sold "AS IS" it is not that different than working with any other seller.  Forgive me for this little rant but the point is.....The rules do not change just because it is a foreclosure or short sale!  

More Mortgage Help for Home Owners

Finally we are seeing the help we have all been waiting for! Not just more money for banks to spend wherever they please but real incentives for banks to do the right thing! Foreclosures are hitting new hits even as the sub prime mortgages that things started in is over half way through their interest resets. Mainly because as the economy softens more people are losing their jobs and subsequently their homes as their ability to find a new job dwindles.

This new plan is sorely needed and includes help with renegotiated terms that can save few hundred to a thousand dollars a month in an individual mortgage payment. It does not come at no cost but speaking for myself I would much prefer my tax dollars go to helping families rather than Wall Street! The total cost is estimated at $75 million.

This is welcome news for today's sellers as it will translate into less competition in the long run and hopeful a rise in there homes value!

For question feel free to call or email me, you can also visit www.watersrealtymn.com for more market information.

How Affordable is the Housing Market?

In order to answer this question we need to understand the current market conditions.  Is it all doom and gloom as the headlines show or is there a silver lining that is becoming more apparent as the days pass?  I tend to follow the later camp.  There are many positive things happening in the market place that affect a buyers ability to purchase a home.  There are three key areas that affect a buyers ability to purchase.  They are interest rates, real estate prices, and a buyers income.

First of all but by no means the most important are interest rates.  Our federal reserve is working hard to keep interest rates low.  Although I am uncertain how much lower they could actually go.  Right now interest rates are averaging about 5.5 to 6% depending on which mortgage vehicle you are looking at.  The rates are exceptionally low and will probably begin to edge up as the economy begins its slow recovery.  This is good news for both sellers and buyers because it makes buying a home easier now than it will be as the rates start to rise.  Although the market is slow there are buyers prepared to purchase and sellers who are in a position to sell.

The unfortunate part for many sellers is the decline in a homes value.  However if you purchased your home 10 years ago or more you are in fine shape to sell.  If purchased at the top of the market it will take some time before the market will catch up to what you purchased your home for.  The main culprit is the appreciation levels in first half of this decade.  The appreciation levels were continuously in the teens this is unsustainable.  Homes traditionally appreciated 3 to 4% in a good year and this made buying your home a sound investment to hold for a period of time.  The sellers that have held their home through the real estate boom are sitting in a great spot to sell.  Although they will not be able to get as much as say in 2006 they should still have considerable equity built up.  Although many homes delinced in value and on average home prices in the Twin Cities fell approximately 13% in 2008 alone.   This is may be hard for some people to swallow but it is great news for a purchaser. 

The last thing to affect housing affordability is a persons income.  the median income for an American worker has not risen significantly since the late 1990's.  As the real estate market took off people salaries did not follow suit make the Housing Affordability Index (HAI) in the Twin Cities as low as 123 in July 2006.  The average HAI in the Twin Cities is historically around 150-160.  We trail behind both coasts which average closer to the 123 we reached in 2006.  Right now because of the indicators explained above we are reaching an HAI of close to or slightly above 200 taking into account lender mediated properties.  This makes housing more affordable now than it has ever been and we will likely not see numbers as favorable in the near future.

If you like more information on the real estate industry visit Waters Realty.

Market Analysis for Fall 2007

I cannot believe it; 2 months have passed since my last market update and what a period it has been.  While doing the work for this market analysis I had a few assumptions about what it would show.  They included prices and inventory levels dropping.  Both of these assumptions on the broad level are true, although it is interesting to look at the individuals neighborhoods and see the fluctuations.  I used current date obtained from the MLS in this market analysis.  All of the data is from a window of 7/30 to 10/5 and also provides a little comparison to the last market analysis completed for June and July 2007.  I always feel better if I have some hard numbers I can look at and compare, so I have set up the link below in order for you to analyze the data yourself!

Download fallmarketstats.xls

This analysis shows a few major trends in the West Metro's real estate market.  I have listed these trends and their impact below:

1. There are fewer homes selling which is helping to slow the market further.
2. There are also fewer new listings hitting the market which is good news for sellers. 
3. Buyers can look at the market and feel pretty confident in their ability to negotiate a good price for a home especially with interest rates still pretty low. 
4. In addition, the average price of a home is dropping in the West Metro. 

Chanhassen appears to be the city with least amount of changes in pricing and listings, but homes are not selling very quickly as a result.  Minnetonka is doing very well with a higher percentage of homes selling in this period then in June and July of 2007, part of this large increase in sold homes is represented in a drop of $143,000 in the average selling price.  In conclusion a few neighborhoods stand out with healthier real estate markets.  These neighborhoods include: Deephaven, Greenwood, Hopkins, Shorewood, Tonka Bay, Victoria, and Waconia. 

If you have questions or comments please feel free to comment on this post or you can email me at cherikuhn@watersrealtymn.com.  You can also visit my website at www.watersrealtymn.com for up to date information and to look for current listings!

More about the Market!!!!

"The housing market will probably hold close to present levels in the months ahead according to the latest forecast by the National Association of Realtors." (Walter Moloney) So what does that mean for the average consumer? I think it is safe to say its still a buyers market. The mortgage industry's standards are in truth a bit more stringent but the fact remains that there are a lot of properties available out there for buyers to choose from. This, in turn, means that the market has quite a few sellers as well.
Sellers in this market have to be patient because while homes are being sold it is taking a little longer. Proper staging of a home along with curb appeal can greatly increase the chances of attracting a prospective buyer. "Existing-home sales are forecast at 6.04 million in 2007 and 6.38 million next year below the 6.48 million recorded in 2006." Our market is still functioning at a nice level, just not the boom level that we saw in 2006. Real estate is very much a cyclical process and it too will rebound.
As a realtor, I certainly wouldn't let this time deter you from trying to purchase or sell your home. I would just go into it with the knowledge that the transaction make take longer than you anticipate so patience is key!

If you have more questions please feel free to email Cheri Kuhn at cherikuhn@watersrealtymn.com or Jody Thorpe at jodythorpe@watersrealtymn.com. As always our website is full of great information, current listings, and open houses. You can visit Waters Realty by clicking here!

Market Activity Summer 2007

One of the most commonly asked questions that we are asked as Realtors are: "How is the market doing?"; "Are there any areas that are better than others?"; "What is the average price per square foot in our neighborhood?"

I have always liked to have something I can look at and compare when I analyze market data. The link below will provides city by city information for a more exact look at our market and which areas are most popular. The data for this analysis came from the Multiple Listing Service over the last 60 days. Just click on the file to view the analysis.

Download JuneJulymarketstats.xls

The Minneapolis Association of Realtors completes a Housing Supply Outlook report every month. The most current one is for the Month of July 2007. According to this report, it would take approximately 9.6 months for the market to absorb the current inventory of homes being offered for sale. In comparison, last year at this time the supply was much lower at only 7.1 months. During the faster paced markets in the past several years, this market has averaged between 3 and 5 months supply of houses on the market.

Now I suppose one asks "what in the world does it mean to have 9.6 months worth of houses on the market?" The Housing Supply Index is commonly used to measure the quality of the market. 9.6 months worth of houses refers to the number of months it will take for the all of the active listings on the market to sell. According to the Minneapolis Area Association of Realtors the market is considered balanced between buyers and sellers when there is roughly a 5-month supply of homes available for purchase.

Given this definition we are definitely in a buyers market and right now is a great time to buy a house even if you need to sell yours first. Although it may take time to sell your home, it has not been this affordable to obtain your dream home in recent years and it may not be as easily attainable in the coming years as it is now! The segment of the market that is hardest hit with longer days on market is higher end homes and this fact allows these homes to be more attainable to the general market than in recent years!

If you want to know more please feel free to either comment to this post or email me at cherikuhn@watersrealtymn.com or jodythorpe@watersrealtymn.com. As always our website is a wealth of knowledge! Please visit Waters Realty's Website by clicking here!