The 2018 market is off and running. Listing inventory is low, interest rates are still affordable and buyers are desperate for homes to see. If you are considering a move, give us a call. With the resources and networking at Edina Realty, we can help you sell your home and find your new home.
Yes – we finally might have seen the last snow for now! The market has been tied to the weather – slow to get started but gaining momentum. Homes are selling and even in multiple offers if they are priced well. In fact, homes that are carefully priced are selling within 10 days of their list date. Overpriced homes are taking longer. Several $1 million|+ priced homes have recently sold in Edina which means the upper bracket is starting to sell as well.
Shawn Tully, senior editor at large at Fortune magazine, has written a recent article entitled “Real Estate: It’s Time to Buy Again.” His point is that, after four years of plunging home prices, the most attractive asset in America is housing. He believes that there are two basic factors laying the foundation for the housing recovery: The first is the historic drop in new construction and the second is a steep decline in prices. A new affordability index has been determined and more Americans can afford to buy a home now because of low prices. Before ths shappens, America will need a decent economy according to Tully. He sees the market returning to levels seen 10 years ago. Mark Zandi, chief economist for Moody’s Analytics, says “the credit standards are now at about historic levels…” which will lead to prices rising and buyers purchasing homes again. Also helping is the brighter outlook for areas hit hardest by the foreclosure market – the sun belt areas of Florida, Nevada, Arizona and California. People will always want to live in those areas for the warm weather, so there is optimism for those markets as well. Time will tell.
As reported in Bloomberg Business Week on March 1, billionaire Warren Buffett claims buying a home was the third best investment he ever made after marrying his two wives. “For the $31,500 I paid for out house, my family and I gained 52 years of terrific memories with more to come.” Buffett, the world’s third richest man, still lives in the home he bought in Omaha, Nebraska more than five decades ago. He continues with “A housing recovery will begin within a year or so – it is certain.”
January 2011 pending sales data is out from the Minneapolis Area Association of Realtors and sales increased 3.7% from January 2010. This is the first ever year over year increse since the tax credit days of April 2010. Although pending sales increased, the median sales price fell 10.8% to $140,000 in the Twin Cities. A larger share of homes sold in January were short sales or foreclosures compared to last year and that explains part of the decline. Traditional, non distressed sales actually increased 1.9% from a year ago to $201,500. The average days on the market until sold increased 9.4% to 146 days; affordability, however, is soaring as interest rates remain low. The Housing Affordability Index for January 2011 is 241, which is a new record and indicates extremely favorable conditions for buyers.
It was announced on February 4, 2011 that FHA has extended its waiver for buyers to be able to use an FHA insured mortgage to purchase a home within 90 days of it previously being purchased, rehabbed and then re-sold. Previously, FHA had denied financing to any home that was “flipped” or bought, rehabbed and re-sold within 90 days. This announcement means buyers will be able to use FHA financing to purchase those homes within the old 90 days period and this waiver shall remain in effect thru December 31, 2011. This is good news for 1st time home buyers looking to buy a home that might have been recently rehabilitated. FHA is often the only low down payment method of buying a home so this will allow those buyers to now purchase a home that was formerly prohibited from FHA financing. David Stevens, Commissioner of the FHA, was quoted as saying “Because of past restrictions, FHA borrowers have been often shut out from buying affordable properties. This action enables our borrowers, especially first time buyers, to take advantage of this opportunity and buy a home that has been recently rehabilitated. It will also help move foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout the country.”
The 2010 Minneapolis Area Association of Realtors has just released its Annual Report for the 2010 real estate market. One chart they include is called “Historical Price by Area” and it charts the annual pricing averages across the Twin Cities since 2006. It also compares the difference from 2008 to 2009 and the % change up or down in average price. Some examples include:
Area 2008 avg price | 2009 avg price | % difference
Edina: $325,000 | $339,000 | +3.1%
West Bloomington: $210,000 | $206,950 | -1.5%
Eden Prairie: $251,125 | $265,000 | +5.5%
SW Minneapolis: $260,000 | $275,000 | +5.8%
St. Louis Park: $212,500 | $213,703 | +0.6%
Minnetonka: $241,250 | $265,000 | +9.8%
Hopkins: $164,900 | $150,350 | -8.8%
Lake Minnetonka: $339,500 | $350,000 | +3.1%
Richfield: $165,000 | $160,000 | -3.0%
Plymouth: $253,500 | $249,000 | -1.8%
Maple Grove/Osseo: $219,348 | $250,000 | +14%
Some thoughts for January 2011.
Statistics are out from the Regional Multiple Listing Service for 2010. The southwest suburbs and southwest Minneapolis stats can be found on our website under blog/market statistics, but here are several areas that might be of interest. Edina’s average sales price went up just under 2% in 2010 but the average days on the market increased 10%. Less than 1/2 the homes listed in 2010 in Edina actually sold. Eden Prairie’s appreciation was a bit more but its days on the market decreased by 15 days on average. Southwest Minneapolis average price increased by $36,000 and its days on the market increased by 13 days. West Bloomington stayed virtually the same in sales price and days on the market.
Did you know more young adults are living at home? According to National Association of Realtor statistics, there were 70 million young adults aged 18 to 34 living in the US and the number of adults under the age living at home in the highest level since 1981! The number is over 30% compared to a historical average of 28%.
Forbes Magazine recently ranked Minneapolis-St Paul as the fourth best job market in the United States. Job growth is expected in manufacturing and professional services like accounting. The Mall of America is also expanding and that will contribute to job growth in the region. Forbes reported that there are roughly 3 job seekers per advertised opening in the Twin Cities and the area’s unemployment rate is 6.5% compared to the national average of 9.4%.
Edina Realty proudly announced on January 19, 2011 that it led the market in Twin Cities real estate companies in sales in 2010 for the 11th year in a row. Edina Realty actually gained1% in market share over its nearest competitors in a difficult market. Edina Realty represented 21.53% of all sales in the Twin Cities in 2011 and it continues its trend of increased market share.
On January 27, 2011 Ron Peltier, chairman and CEO of Homeservices, Edina Realty’s parent company, spoke about the current real estate market on Fox News. Pending home sales were up 2% in December 2010 vs. November 2010 and this was significant in the fact that December is typically a quieter sales month. Peltier felt however, that this indicated a stabilization in the housing market as 2011 emerges. “It’s a great time to buy a home” he said. “Home prices are at 2002 levels, there is alot of inventory and interest rates are still under 5%, so it’s a great time for buyers to be looking.” As interest rates start to move ever so slightly upward and consumer confidence returns, the real estate market should stabilize and improve during 2011 and into 2012.