How the Spring real estate market is shaping up

According to the Minneapolis Association of Realtors, the local housing market continues to mimic spring growth, as Twin Citizens emerge from their wintry cocoons just in time for the final days of the home buyer tax credit. For the week ending March 20, there were 2,277 new listings, up 28.8 percent from a year ago and marking the seventh consecutive week of strong year-over-year increases.

Pending sales dropped a bit from their high the previous week, but the 950 signed purchase agreements for the week were 10.2 percent ahead of where they were at this point last year.

Keep in mind that these numbers reflect the entire Regional Multiple Listing area. The housing market in Hutchinson, MN appears to be following the same trends.

As the tax credit’s April 30 deadline looms, expect a flurry of home sales activity. Time will tell what happens when the credit has expired, but the next few weeks should be extremely active.

How Green Are We?

Here are some interesting statistics recently published in “The Residential Specialist” magazine. (Their source for the information was Harris Interactive.) This magazine is available to all real estate agents who have earned their Certified Residential Specialist certification through the National Association of Realtors.

Several of Hometown Realty agents in Hutchinson, MN have earned this CRS designation.

What percentage of Americans participated in energy-saving activities within the past year?
Installed more energy efficient light bulbs: 63%
Purchased energy efficient appliances: 36%
Started paying bills online: 46%
Switched to paperless financial statements: 40%
Donated an electronic device for recycling: 41%
Swithed from bottle to tap water: 29%
Installed a low flow showerhead: 17%
Installed a low flow toilet: 16%
Made home improvements that provided government tax credits: 14%
Bought a more fuel efficent car: 13%
None of thes: 13%
So, how do you and your family compare?

Home Prices Show Strongest Sign of Stability Yet

Minneapolis, Minnesota (March 10, 2010) – For the second consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven’t seen back-to-back year-over-year increases since 2006.

The February median sales price of $159,000 was a 6.0 percent increase from last February’s mark of $150,000. That’s the strongest year-over-year increase since 2005. Part of the reason for the stronger upward movement is that fewer foreclosure homes are selling now than did during last February.

“The market share of traditional, non-foreclosure homes has really grown in the last year,” said Brad Fisher, President of the Minneapolis Area Association of REALTORS® (MAAR). “That’s tilting prices upward and stabilizing the market.”

The median sales price of traditional homes (excluding foreclosures and short sales) in February was $204,900, down only $100 from last February’s mark of $205,000.

Foreclosures posted a 0.8 percent increase to $120,000, while short sale properties posted a 6.7 percent decline to $145,000.

There were 3,527 signed purchase agreements in February, an increase of 6.4 percent from a year ago. As spring springs and we encroach upon the April 30 deadline for the federal home buyer tax credit, expect home sales to tick up as buyers move to take advantage of the incentive.

Due to the continuation of extremely low mortgage rates and the drop in prices seen in recent years, affordability is off-the-charts. The current Housing Affordability Index of 213 is the fourth-highest mark ever recorded. Along with the tax credit, conditions are attractive for home buyers.

Buyer activity has brought inventory down, so there are far fewer homes for buyers to choose from. The March Supply-Demand Ratio of 5.39 means that there are 5.39 homes available per buyer in the month. In March 2008 the mark was 8.16.

“No one can predict what the market will look like six months from now,” said MAAR President-Elect, Pat Paulson. “But right now the combination of low rates, good affordability and the tax credit have set a nice table for buyers.”

Loan Modifications – The Good and The Bad

Many homeowners have been able to take advantage of the loan modifications that some of the lenders are doing on mortgages that either are in trouble or may soon be.

We at Hometown Realty here in Hutchinson, MN have clients who have been able to work out modifications with their lenders to lower their monthly payments by hundreds of dollars and now are able to stay in their homes.

Some of the modifications have required the homeowner to come up with some cash at the time of the modification, some of the loans have been extended to 35 and 40 years, while others have simply lowered interest rates to allow for lower monthly payments.

That’s all the good, now for the bad. These loan modifications will affect the homeowner’s credit scores negatively. This isn’t always explained clearly to the homeowners who become surprised down the road when they learn that their credit scores have dropped considerably.

So, if you are considering doing a loan modification, be sure you know all the ramifications before you proceed.