The Real Estate Market (first 30 days after the tax credit expiration.)

According to the Minneapolis Area Association of Realtors, home sales in the Twin Cities housing market took another dip as the hangover from the tax credit expiration continued. For the week ending May 22, there were 624 pending sales—a precipitous drop of 42.5 percent from a year ago.

The biggest drops in sales since the credit ended can be seen in the traditional seller market (i.e., anything that’s not a foreclosure or short sale) and in the middle price ranges from $150,000 to $350,000. Pending sales have dropped in those ranges from 1,085 the week the credit ended to 384 for the week ending May 22. In sum, it may be a difficult summer market for home sellers.

The good news is that new supply is also slowing, which means the market is already self-correcting to avoid a surge in unneeded inventory. New listings fell to 1,581 for the same reporting week, a decline of 15.8 percent from this time last year.

The Supply-Demand Ratio has been updated for June and shows a figure of 5.05, which means there are 5.05 homes for sale for each buyer in the month. That’s a 10.9 percent increase over the mark seen a year ago and is a result of the decline in buyer activity.

Here in Hutchinson, MN the market activity for May, 2010 was still pretty good. We’ll have to see if our housing market sees the same declines as reported for the Twin Cities market.

There Is a New Sign in Town

Recently we unveiled our new for sale signs in the Hutchinson, MN area. You’ll see them on the homes we have for sale as well as homes that have recently sold.
After 25 years of using the other signs, we decided it was time for a new look.
The new signs are in the shape of a house and have brochure boxes attached to the chimney.
We hope you enjoy the new look.

Expiration of Tax Credit

The expiration of the tax credit clearly motivated buyers to take action by April 30. Last week, there was a significant 31.2 percent jump in Pending Sales versus last year, bringing the total number of contracts written to 1,469. But for the first time this year the number of New Listings was down. A total of 1,803 of them entered the market, 11.5 percent lower than a year ago.

Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.

These statistics include all of the Regional Multiple Listing area not just Hutchinson, MN.

We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.

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?

2009 Profile of Home Buyers and Sellers

According to the National Association of Realtors “Profile of Home Buyers and Sellers 2009″, 90 percent of buyers used the Internet as an information source in their home search, up 30 percentage points during the past six years. First-time buyers were even more likely to use the internet.

Also reported was that 47% of recent buyers were first-time buyers, 21% of recent home buyers were single females, and 10% were single males.

The housing market in Hutchinson, MN would be in line with these findings.

Homebuyer Tax Credit Extended

By now most of you have heard that the first time buyer tax credit has been extended to April 30, 2010.

In addition, there is now a tax credit for current homeowners who have used their home as a principal residence consecutively for 5 of the previous 8 years. This credit also runs to April 30, 2010.

This is good news for anyone who has been thinking about selling their current home and moving into another. The housing market here in Hutchinson, MN is well positioned for anyone wanting to buy another home.

There are some income restrictions to both credits, but most people will fall into the income limits.

If you have any specific questions about either of these tax credits, please call our office.

Renters Beware

Renters aren’t immune to too-good-to-be-true pitches.

One popular scheme these days involves the perpetrators lifting a real estate agent’s online photos and information for an attractive residence that’s currently for sale — and then placing an ad on a free online classified-ads site that purports to offer the house for rent at below-market rates.

The pitch (from the ostensible landlord) is, ‘We’re leaving town quickly because we’re going to do missionary work in Africa’ ” and thus are offering the place at an excellent monthly rate.

In fact, the landlord says he’s leaving town so quickly there’s no time to show it, and so the tenant will have to go by what’s in the ad and wire the first and last month’s rent to the landlord (at an address that’s inevitably somewhere abroad) and the keys will be sent, he said.

Incredibly, this works (in the criminal’s favor) more often than you’d think. The price is so low, and people don’t want to pass it up. But they’re not doing their homework.

A couple of weeks ago, we had a renter contact us about a home that we have for sale here in Hutchinson, MN that was advertised for rent on Craigslist and unfortunately it was part of this scam. Luckily, the would be renter was smart enough to check things out before sending any money.

Yesterday our Regional Multiple Listing Service sent out a warning to all of us about this scam which apparently is being run out of Nigeria!

So, once again the phrase, “if it sounds too good to be true, it probably is,” holds true.

Shorter Time for Short Sales

In Hutchinson, MN it seems in the last while that the process of short sales is getting shorter. Thank heavens. We have had buyers of homes for sale who have waited up to four months only to find out that the lender who holds the mortgage is not willing to accept the offer that they buyer made on the home that is for sale. Even though buyers know that the process will be long, many of them have decided to wait it out in hopes that the price they get the home they want for will be worth the wait. In the last couple of weeks, we have had faster response from lenders when offers are submitted on the short sales. I suspect that part of the reason is that we as real estate agents understand the process of the short sale better than we did a year ago. I also think that the banks are catching up on their work load and are getting better at doing their jobs to expediate the process of the short sale. Don’t misunderstand, it’s still a longer process than just buying a home when a short sale is not necessary. Everyone’s patience level is different and if you have the time, purchasing a home that needs to be a short sale can be beneficial.

Why Wait?

Last weekend I talked to a buyer at an open house who told me that she wanted to wait until spring to buy a home (she’s currently in an apartment.) I asked her why and she responded “I just don’t want to move in the fall or winter.” I asked her if she was aware of the $8,000 tax incentive if she were to buy a home by November 30, 2008. She said, “Yes, but I don’t want that to influence my decision to wait.” WHAT? Well, how about the fact that interest rates are extremely low and prices of homes are extremely low. We don’t have any idea what the interest rates will be in spring, nor do we know what the prices of homes will be then. I’m not so sure that if I knew that I was going to purchase a home, that I would wait until spring. Time will tell if she is making a wise decision or not. I wish I had a crystal ball so I could tell people what the housing market will be like in Hutchinson, MN next spring!