Tag Archives: 2010 Tax Credit

MN Home Prices Rising?

Don’t call it a comeback!

Ok, well maybe we should call it a comeback.  It appears that we *might* be seeing the housing market turn from a buyer’s market to a balanced or even a seller’s market finally.

  • Housing Supply is down
  • Percent of Foreclosures and Short Sales are down
  • Average Days on Market is down
  • Home Prices are up
  • and Number of Home Sales are up

All this without any interference from outside influences (i.e. the 2009-2010 Home Buyer Tax Credits that temporarily propped up housing stats, only to see them decline once the Credits expired).

See the brief Star Tribune Article here.

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July 2011 Twin Cities Housing Market Update

This video is compiled by the Minneapolis Area Association of Realtors.

Lots of good info about where the Twin Cities real estate market is right now, and maybe where it’s heading in the near future!

Highlights include:  sustained low interest rates for mortgages; increase in “pending sales” from last year; decreased number of homes available to buyers.

All in all, this is still a fantastic time to get into the housing market as a first time homebuyer–we may be only a year or two away from a full on recovery, and if you wait too long, you’ll be paying more than you could have.

Watch the full video below

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Twin Cities Housing Market: March 2011

This video made by the Minneapolis Area Association of Realtors goes into some detail on what the housing market looks like in Minnesota in early Spring 2011.

Some details in include:

  • Lower amount of “Pending Sales” than a year ago
  • Lower amount of “Active Homes for Sale” than a year ago
  • Higher Interest Rates due to the  [slowly] recovering economy

All this adds up to a continued strong buyer’s market for people looking to take advantage of inexpensive home prices and historically low interest rates.  But some indicators show that interest rates and down payment requirements could rise more in the near future–which may give more people enough incentive to buy NOW, rather than wait another 6, 12, or even 18 months.

Click “play” below to watch the whole video.  (Don’t worry, it’s only a few minutes)

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If You Wait To Buy, You’re Going To Lose Money

Let me start first by saying that when you choose to buy a home, it HAS to be the right time for YOU in your life.  Don’t ever push the timing just because someone tells you to.

With that being said, right now is literally one of the best times in the history of the U.S. housing market to buy a home.  Even with the national economy limping along and the housing market still softly declining, if you wait too much longer to get into the housing market you may have waited too long.

What factors are making 2011 a phenomenal time to buy a home?

Interest Rates – this is probably the the biggest factor that NO ONE TALKS ABOUT when looking to buy their first home.  Mortgage interest rates fluctuate everyday in an open market, somewhat similar to the stock market–which means they’re out of anyone’s individual control.  So when the interest rate market gets as low as it’s been for the past 5 or 6 months (4-5%) it’s something that you should take notice of.  The lower your interest rate, the more home you can afford without increasing your monthly payment amount.  If your interest rate was 0%, you could afford a $180,000 sale price with a monthly principal payment of only $500.  If your interest rate jumped to just 5%, you’d be looking at a purchase price of around $93,000 to stay at a principal and interest payment of $500.  And if your interest rate spiked all the way up to 10% you’d only be able to afford a sale price of $57,000 for that same $500/month principal and interest payment.  Pretty big difference, isn’t it?!  Moral of the story: lock in a low interest rate now since you have the ability to buy more house for the same monthly payment!

Home Prices – everyone knows that home prices have been coming down since 2006, but what you might not know is that some lower “price brackets” are actually beginning to see increases in their median sale values–most notably the lowest price bracket of homes under $159,899.  In 2010, the median home price actually went up by 2.6% when compared to 2009 numbers in the Twin Cities.  Even though there was a very large number of homes that entered the market in this lower price range, a lot of buyers were quick to purchase them and were willing to pay a little more in 2010 than they were in 2009.  I would anticipate this trend to continue, even if a sizable number of foreclosures hit the market in this price bracket.  Why? Because not only are first time home buyers purchasing these houses, but investors are snatching them up and either re-selling them to end buyers, or holding them as long term rental homes.  So the days of having little to no competition for these cheap houses might be coming to an end.

Assistance Programs – there are a huge number of counties, cities, and even specific neighborhoods in Minnesota that offer assistance to first time home buyers in the form of down payment funds, closing costs help, and even renovation loans.  Even without the $8,000 Federal Home Buyer Tax Credit anymore, there are a lot of incentives for buyers that make a modest income in the twin cities area.   Most new buyers aren’t even aware of these grants and programs, which is a shame.  Fortunately our lending partners are the local experts when it comes to there programs, and can quickly determine if you do qualify for assistance–and more importantly how much help you can get!

So even if you think that home prices will continue to fall in 2011 by 5-10%, you may actually lose more money because of rising interest rates and higher demand for these low priced homes (under $200,000).

Don’t wait until it’s too late–get educated today!

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Hennepin and Ramsey County Housing Numbers

If you like analyzing numbers, you’re gonna love this post!!

I picked up a copy of the Regional MLS board’s 3rd Quarter Economic and Market Watch Report and wanted to share some interesting stats with you if you’re thinking about making the jump into home-ownership.

Obviously the Twin Cities metro area expands well past just these two counties, but since a large number of homes are located in Hennepin and Ramsey County, I felt this would be sufficient to sum up what’s going on in the housing market.  Again, these are just numbers comparing the 2nd and 3rd quarters of 2010.  So that includes April, May and June in the 2nd Quarter and July, August and September in the 3rd Quarter.  Keep in mind the fact that the First Time Home Buyer Tax Credits that expired in April of 2010 had a pretty significant effect on property sales in MN, causing more buyers to purchase sooner in 2010 than they probably would have under normal circumstances.

Both counties are also rated as a “2” on a 1-5 point scale with 1 being a very strong buyer’s market, 2 being a moderate buyer’s market, 3 being a neutral market, 4 being a moderate seller’s market, and 5 being a very strong seller’s market.  So we are still in a decent buyer’s market which means that buyers have more purchasing and negotiating power than sellers.  (If you’re a buyer, you WANT there to be a buyer’s market! It means you’re getting the better end of the deal.)

Hennepin County – 2010

Average Price: 2nd Qt-$242,400 | 3rd Qt-$265,700

Homes on the Market: 2nd Qt-10,118 | 3rd Qt-9,804

Homes Sold: 2nd Qt-4,852 | 3rd Qt-3124

Average Days on Market: 2nd Qt-70 | 3rd Qt-76

Ramsey County – 2010

Average Price: 2nd Qt-$178,200 | 3rd Qt-$173,400

Homes on the Market: 2nd Qt-3,494 | 3rd Qt-3,408

Homes Sold: 2nd Qt-1,760 | 3rd Qt-1,105

Average Days on Market: 2nd Qt-70 | 3rd Qt-81

As you can see in the numbers, sales were definitely down in the 3rd Quarter of 2010, caused by a few factors such as the tax credit hangover and other weak economic news around the region.  We’re certainly not out of the woods yet as a housing market, but if you’re a first time buyer in Minnesota you can be sure that you’re still going to be getting a very good deal on your home purchase!

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Twin Cities Housing Market Update – August 2010

So the housing market “cooled down” after the First Time Home Buyer Tax Credit ended in April.  Most people know this, especially would-be buyers who are looking to purchase their first home.

As evidenced by this video put together by the Minneapolis Area Association of Realtors, we see further proof of this housing “slump”.

The good news is that for buyers the “slump” is actually a “victory” because as is with most real estate news, the housing market is looked at through the perspective of the seller, and not the buyer.

So as you’ll see below, prices are still low, pending sales are low, and interest rates on mortgages are super low.  All good things for the first time home buyer in the state of MN.

Click play below to see all the stats from July 2010.

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Summer Is Winding Down

With less than a month of summer left in 2010, mn first time home buyers are starting to scramble to find their first house.  Summer usually brings more homes on the market, which means buyers have more properties to choose from.  However, this summer has been unique because of the $8,000 Federal Tax Credit that ended on April 30, 2010.  A lot of buyers who would have waited until June, July and August actually made offer back in April, in order to qualify for the tax credit.  During the first couple months of summer in Minnesota, we have seen very low sales numbers for first time home buyers because of the tax credit effect.

What that means is that while the inventory of homes is still high, the number of buyers has been low, creating a very nice buying environment for these first time homeowners.

Personally, I have been assisting 4 or 5 new home-buyers during the summer months and we have effectively had our “pick of the litter” when it comes to available homes.

So if you’re thinking about house hunting or moving in the next 3-6 months, you owe it to yourself to take a look at some properties now–because you might just find a the deal you’ve been waiting for.

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Early Summer 2010 MN Housing Market

Now that July is finally here, we can take a look at some of the early summer trends in the mn housing market for 2010.  Particularly, we are concerned with what the market conditions look like from the perspective of a first time home buyer in mn.

The Tax Credit incentive is now gone for buyers looking at homes, so the market is showings signs of decreased demand, which is due in large part to the fact that a lot of buyers who would have bought during the summer actually bought during the spring in order to qualify for the federal home buyer tax credits.

The number of homes for sale is still stable, but slightly tipped in the buyer’s favor.

This video is provided by the Minneapolis Association of REALTORs.  Click “play” to see this month’s summary of the market, and determine if this might be the time to start looking for your first home!

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Tax Credit Extension Signed Into Law

President Barack Obama signed into law a 90-day extension for the closing date in order for more home buyers to receive their $8,000 or $6,5000 Tax Credits.  The new closing date for sales to be settled by is September 30, 2010.

After a lot of speculation and an amendment to the unemployment benefit bill last week which failed to pass the house, both the senate and congress pushed the 90-day extension through this week to allow buyers who already had signed purchase agreements to close and remain eligible to file for their tax credits.

While this is ultimately costing tax payers more money, I have to say it’s a good thing for a lot of buyers–including a couple of my personal first time home buyer clients right here in mn.

Short Sales, New Construction, and Foreclosures can often take several months to be closed even after both sides have agreed to the terms of the sale.  Add in a deadline which has as much as $8,000 hinging on it, and you’re sure to get a rush of activity that causes backups, slowdowns, and overloads the real estate sale system as we know it.

As far as a new tax credit or home buyer incentive, there is still no word from the government about any programs or grants being unveiled, despite the still declining housing market nationwide.  However, these statistics don’t always tell the whole story.

If you’re looking to buy a home you should consult with your local real estate agent and loan officer to see what things are like in your area.  Real Estate is very local, similar to weather reports in a way.  You wouldn’t care what the weather was like in Los Angeles if you lived in Boston, right?  Just because Florida and Nevada are still struggling housing markets doesn’t mean Minnesota or Wisconsin markets are hurting.

If you were in a position to miss out on the tax credit because of your closing date you now have an additional 3 months to make it happen–so go get to work!

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Update: Tax Credit Closing Date Extension

I wrote last week about the Senate vote that may help extend the Home Buyer Tax Credit Closing Date for buyers who already have a signed purchase agreement before April 30th.

Right now, we are still waiting for the bill (HR 4213) to be voted on and passed in the Senate and House.  The vote last week simply added the Home Buyer Credit Extension into the larger Unemployment Benefits Bill.  That bill (along with its amendments) needs to be passed by both houses, then signed by President Obama into law.

Until all that happens, it’s still just speculation.  So don’t rely on the extension if you have the option to close in June and receive the Tax Credit.

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