Home Affordability

The November 18, 2014 Star Tribune wrote an article titled “Twin Cities ranks No.1 for Home Affordability”. Interest.com calculated its new rankings based on several criteria adding a quote from Emily Green, president of the Minneapolis Area Association of Realtors. “We are now kind of in that sweet spot, where we have low interest rates, lots of good houses coming on the market and, believe it or not, credit is starting to loosen up a bit.”
Interest.com states that income growth is one of the key ingredients that drives the market and the Twin Cities median household income is $67,000 in 2014, nearly $15,000 above the national average. If wages continue to increase, “homes in the Twin Cities will be much less affordable in a decade” says Mike Sante of Interest.com.

Winter 2014/15

As we approach the months of November, December and January, the real estate market generally quiets down. Combined with the correction in the market that occured in May and June 2014 where more listings came on the market and leveled the buyer/seller balance, sellers that want to sell this winter need to be careful in their pricing and have the condition of their homes be “move in” ready.
Interest rates remain around 4%, so money is available. Buyers are still looking, so the market is not completely dormant. The spring market traditionally begins the Monday after the Super Bowl, so if you are considering selling, that is the best time to get started. As you wait for march, April and May, more sellers will also be selling so the competiton will grow.
Thanks for a great 2014 and we hope to be able to help you with any real estate needs in 2015.


March 2013 notes.

The 2013 market continues to gather strength despite the weather. Last year, green grass was appearing and golf courses were opening the 3rd week in March. Despite the snowy conditions, both units and volume are up across the board at Edina Realty, in part due to continued low interest rates and part to low listing inventory.

Recent encouraging news from Berkshire Hathaway chairman Warren Buffet has helped as well as the recent new highs in the stock market. There just appears to be more optimism in this year’s market than even the busy spring 2012 market.

If you are considering a move, give us a call. We would be happy to begin your search or help determine the price of your current home. Take advantage of the positive market feelings as prices start to recover and the spring market takes hold.

October notes.

The real estate sales market has continued strong into the fall of 2012 for several reasons. The inventory of active listings is reduced, so buyers are more actively considering the existing inventory. Interest rates are at ALL TIME lows with FHA offering 3% fixed rate for 30 years, conventional from 3%-3.25% and ARMs starting at 1.75% The final reason is, although prices are starting to increase in certain areas, there are still bargains to be had and buyers are taking advantage of opportunities.

July  notes.
The market in the Twin Cities continues to show improvement. The Minnesota Association of Realtors says housing sales were up about 5% past month compared with June 2011. The association’s report shows the median sale price of a home in Minnesota is nearly $160,000 – up 10.4% from June 2011.  Homes sold in June 2012 sold for nearly 94% of original list price, an increase of 3.5% over June 2011. Nationally, the numbers are not as encouraging as Americans bought fewer homes in June 2012 than in May 2012 and sales dropped 5.4% in June 2012, the fewest since October 2011. Mortgage rates are still very low, actually averaging 3.53%, a 30 year record low.

June notes.
Edina Realty Title was the #1 title company in terms of closings in the Twin City metropolitan area in 2011.

Interest rates reached their lowest point on Friday June 15, 2012 when the rate was quoted at 3.625%. Buyer’s purchasing power is the highest it has been in the past six years and it is a great time to buy. If you don’t see your next home in MLS, give us a call. With Edina Realty’s extensive agent and office networking, there is a chance we can find a home that might work!

According to Bloomberg News on June 14, 2012, Americans are finally digging themselves out of mortgage debt. “Home equity in the first quarter rose to $6.7 trillion, the highest level since 2008” said the news service.  “The willingness of homeowners to carry housing debt has been radically altered” said Richard DeKaser, former chariman of the American Bankers Association’s Economic Advisory Committee. “When the market was booming, the mortgage was used as a leveraging tool, and now it’s seen as a risk. People got too overleveraged in the boom years, and that left them with too much debt when the bubble burst.” Bloomberg says Americans aren’t just bringing money to the table when they refinacne their mortgages at the low rates; they are also choosing to shorten the terms of their loans, thereby increasing their monthly payments. DeKaser continues “It’s the strongest sign yet that Americans’ home loan debt burden is beginning to ease after the record borrowing in the early 2000’s.”

May 2012 notes.

The spring 2012 real estate market has been very healthy! Prices bounced up again in April. According to the St. Paul Pioneer Press, it’s the largets jump since before the housing market meltdown. Prices were up 12.4% from April 2011, which is the largest increase since January 2004.
Fewer foreclosures help boost the market as traditional sales accounted for a higher share of the market. The number of closed sales also increased 7.1% and pending sales climbed 26.4% from April 2011 levels. “If supply goes down and demand at a minimum stays steady, we’ll see prices come up and that’s what we are starting to see” said St. Paul Asoociation of Realtors President Richard Tucker. A sense of urgency is starting to creep into the market as some Realtors reported multiple offers on their listings in April. Tucker continued “You can’t wait around. Someon else will buy that home if you don’t.”
Interest rates remain at historic lows and affordability is also very high. These are all inidicators of an active market for both sellers and buyers. A few more months of firmer prices and a strengthening economy are needed before more sellers feel confident to list, but that time seems to be approaching.

March 2012 notes.

According to the NAR (National Association of Realtors), the housing affordability index has reached the highest level since recordkeeping began in 1970. The index rose to a record high 206.1 in January 2012. The higher the number, the greater the household purchasing power!
This is the first time the index has ever broken 200, which means the typical family has roughly double the income needed to purchase a median priced home. NAR President Moe Veissi, broker owner of Veissi & Associates in Miami, says “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.”

January 2012 notes.
The new year has arrived and with it, a market that has a rare combination – low interest rates and a very low listing inventory. According to the Minneapolis Area Association of Realtors, “That’s all well and good, but consumers and the media walk to talk about one thing: Price.”
Buyers still want to know that buying a home is a financially sound investment and it appears 2012 might finally show a stronger seller market. Pending sales were up 48.4% compared to the same time in 2011 and listings inventory was down 24.4%. Days on market also decreased 1.8% to an average of 135 days. All good signs. Interest rates remain below 4% for now on fixed rate 30 year mortgages, and those are record low rates as well. It’s a great time to buy and a good time to sell – if you still understand price is the biggest issue.

November notes.

On November 7, 2011, Realtor Mag noted that Minneapolis/St. Paul is rated #1 in the 8 Healthiest Housing Markets! “Home prices here are expected to rise 8% next year, the highest growth projected in the 100 cities analyzed. As a hub for medical technology and headquarters for several large companies, employment is expected to grow 2.5% in 2012.”