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Open House in Woodbury on Sunday

May 2012
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Woodbury, Washington County  -  We invite everyone to visit our open house at 1720 Sheffield Drive on May 20 from 1:00 PM to 3:00 PM.

Property information

Single Story For Sale in Woodbury

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• 2,790 sq. ft., 4 bath, 4 bdrm single story - MLS® $310,000

 -  Almost like new!  The home has had many updates in the last two years including new roof and siding; all new windows on the second story, remodeled master bath with whirlpool tub; new refrigerator, dishwasher, microwave and furnace.  The kitchen ceramic tile floor as well as the track lighting have also been updated.

Great for entertaining with an open floor plan, main floor family room; both informal and formal dining room and lower level amusement room.

Property information

Single Story For Sale in Downtown

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• 1,546 sq. ft., 2 bath, 2 bdrm single story - MLS® $550,000

 -  Not a condo but a lifestyle! Stunning views from the 30th flr; fitness ctr/spa, community outdoor deck w/ fire pit, grills, hot tub & pool all in a secure building staffed 24 hr/day. In the heart of DT, close to theater, the river, restaurants and more.

Extra storage unit on 2nd floor - door marked #215. Side by side garage stalls on P1, #449 and 450.

Property information

3-Level Split For Sale in Tyrol Hills

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• 2,037 sq. ft., 2 bath, 3 bdrm 3-level split - MLS® $499,000

 -  Designed by Elizabeth Close, this home overlooks South Tyrol Hills Park. Expansive windows and skylights provide natural daylight throughout. Updated kitchen and bathrooms. Wonderful home office with separate entrance.

Property information

Duplex For Sale in Windom

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• 2,094 sq. ft., 2 bath, 4 bdrm duplex - MLS® $220,000

 -  Vacancies are down so rents are rising! Interest rates for investment properties are still near historic lows. Well maintained duplex with solid rental history in a great location near shopping, restaurants, buses, etc. One side vacant making owner occupied a possibility. Long term tenant with lease on other side. Separate basements and utilities. $28,000 of MAC Improvements including all new windows and new side doors for both units just completed.

Located within walking distance of post office, grocery store, shopping and restaurants. This property has been well maintained and has a solid rental history.  Each unit features hardwood floors, separate utilities, a private basement with free washer and dryer and potential garage space.  Contract for Deed Financing Available with 10% down.

Property information

Further support that now is a great time to buy a home . . .

In a December 30, 2011 New York Times article, Karl Case, the co-founder of the prestigious Case-Shiller Index, presents his perspective.  The following is an excerpt from the Times article and is reprinted in its entirety.

 

Karl Case: ‘It’s unbelievable’

A professor emeritus of economics at Wellesley College, Mr. Case’s name is practically synonymous with real estate values, because he helped create the Standard & Poor’s/Case-Shiller home price index (along with the Yale professor Robert Shiller), which is pretty much the Dow Jones industrial average of real estate. Thanks to the Case-Shiller index’s relentless decline since the financial crisis, many are predicting that residential real estate will drop even further in 2012. In a radical reversal of the conventional wisdom, home ownership has gone from an unquestioned virtue to something to be wary of.

“People are discouraged and fearful,” Mr. Case said. “They’re moving in with their parents. People thought home prices would never go down. We now know that they do go down, and you got hammered if you were overleveraged. Now people think they’ll never go up. The fear is there won’t be any capital gain.”

This week S.& P. reported that the Case-Shiller index recorded yet another drop in home prices through the end of October, with 19 of 20 metropolitan areas (including New York City) showing declines from the previous month and year. United States housing prices on average are now where they were in 2003. But Mr. Case points out that the data masks some signs of eventual recovery.

The 20-city composite index of home prices hit bottom in March 2011 and has improved modestly since. “Household formation is increasing and the vacancy rate is dropping,” he said. “Housing starts are at a 60-year low, and they’ve been there for three years. That’s unheard-of. We’re starting to see some signs of an increase in value.”

But looking at a home like a stock or bond is probably the wrong approach. “If you think of a house as a consumer durable and you qualify for credit, it’s unbelievable how cheap housing is relative to previous years,” Mr. Case said. “Mortgages are cheap. If you’re buying a house or apartment to live in and pay for over time, and can afford the payments, then it’s a terrific time to buy.”

The media isn't always the best resource . . .

You've heard this time and time again yet just last week there was another example of poor reporting.

First, an admission - I came in on the tail end of a news segment so I didn't catch the entire conversation nor do I have the financial consultants name. Also, I know that this was one person's opinion and that this isn't an indictment of all news shows.  However, when the anchor asked him if now was the time to purchase a home, he answered unequivocally "No".  I find that not only incomprehensible but also grossly misleading.  Purchasing a home is not the right decision for some however there are several extremely good reasons why it still makes sense for many.  The right answer should have been "it depends" because there isn't one right answer for everyone.

It depends on several factors including a family's (or an individual's) financial position (credit score, income, other investments, etc.), current living situation (renting or already own) and anticipated length of ownership.  It would be difficult to imagine a better time to borrow money to purchase a home with interest rates hovering just under 4% for 30 year loans.  Home prices are near (or at) the bottom of the market.  Lastly home ownership should represent more than just an investment (we forgot about that in the early 2000;s).  It represents a safe place to live and be a part of a community.

Thankfully, Americans don't agree with this financial consultant.  In Fannie Mae's 2011 3rd Qtr. National Housing Survey, they found that 55% of the population believes that home ownership has more potential as an investment than any other traditional investment.  More importantly, 68% believe now is the best time to buy a home. 

Please don't assume that home ownership isn't right for you or that you won't be able to qualify.  Call to find out if this is the right decision for you.

Twin Cities ranks 4th for businesses

MarketWatch, a division of the Wall Street Journal ranks the Twin Cities 4th in the nation for its business community topped only by Washington D.C., Boston and Des Moines.  The study looks at the concentration of businesses and their economic strength.  They considered all cities with a population of half of a million or more.  To see the full ranking, go to http://www.marketwatch.com/story/california-florida-ohio-cities-in-bottom-10-2011-12-13

In an Ameriprise Financial report, the Twin Cities was found to be among the cities best prepared for retirement.  Over 75% of our population is saving for retirement vs. a national average of 69%.  The full ranking can be found at http://newsroom.ameriprise.com/article_display.cfm?article_id=1590

 

Changes to the Minnesota property tax formula

The Minnesota Association of Realtors just issued a great summary of the 2011 changes to how are property taxes are calculated. The complete article is attached.  Please call me if you have any questions.

 


Rent vs. Buy - What's right for you?

I just received the following study presented by Ken H. Johnson, Ph.D. - Florida International University (FIU) and Editor of the Journal of Housing at the National Association of Realtors national conference in Anaheim, CA.  The analysis should be useful in helping you to decide what's the best route for you.

 

http://realestate.fiu.edu/buyer-or-renter-nation.html

Just out from the National Association of Realtors
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I recently saw what I thought was an astounding statistic from the National Association of Realtors (NAR).  In their recently released Existing Home Sales Report, NAR found that in October, 1 out of every 3 pending transactions didn't close. - a pending transaction is defined as a home under contract.  Compared to a year ago, cancellations have more than quadrupled. 

There are many possible reasons for this - buyers failing to qualify for a mortgage, buyers walking after an inspection, appraisals coming in under the purchase price, etc.  The moral here is that in today's real estate market, it's not just about finding a buyer for your home.  There is an enormous amount of effort (mostly behind the scenes by your Realtor) needed to ensure that it actually closes.  When selecting a realtor, look beyond the marketing material to see what processes are in place to minimize the risk of your sale falling apart.

Not a good catagory in which to lead.

Out yesterday (9/12/11) is a report in the Minneapolis/St. Paul Business Journal that Minnesota is one of the leading nations for mortgage fraud.  In a report released by the Mortgage Daily website, Minnesota had over $184 million in reported mortgage fraud.  Other states with high rates were California, Florida and Ohio based on civil and criminal cases. 

I prefer to think that our state is better at policing ourselves so we catch more of these criminals rather than we have more mortgage fraud crimes in general.  

Just when you thought they couldn't go lower . . .

According to Forthebestrate.com, a mortgage interest rate research firm, interest rates today (9/13/11) dropped to the lowest point ever as reported by Rismedia, a leading real estate information systems company.  For a 30 year fixed mortgage, this means a rate of 3.875% (APR 4.04%).  For the full article, please go to http://rismedia.com/2011-09-12/mortgage-rates-again-fall-to-record-lows/

I hope it goes without saying that if you were ever thinking about buying a home  . . . . please see your preferred lender.  Call me if you would like a couple of recommendations.

 

Condos and town homes to see a resurgence?

Except for a brief period in the early 2000's, single family homes have generally seen greater demand than condos and town homes.  As the first of the baby boomers hit retirement age last year, that may be changing. 

There are approximately 77 million people - those between 47 and 65 years old - who will dramatically shape the direction of housing for the next 20 years.  Many are empty nesters with equity in their homes that are looking for a lifestyle change.  A recent article in Rismedia suggests that having raised their families, boomers are tired of physically and financially maintaining large homes and would prefer quieter neighborhoods, one-level living and more amenities.  Many are finding their options limited.

For the last decade or two, home builders were focused on fulfilling the demand for ever larger homes in sprawling neighborhoods.  With this shift in buyer demand coupled with a stagnant housing market, builders have been slow to adjust.  Unlike builders prior targeted market - younger families - the boomers have built equity in their homes and have the capability to trade in their homes for a place that better fits their lifestyle.

What will they be looking for: 

* Open floor plans that allow casual entertaining of family and friends

* Backyard living space

* Lower or no exterior maintenance

* Single level living with about 2500 sq. ft.

Demand for these types of homes should be strong for the next 20 years. 

What conclusions can be drawn from May 2011 housing statistics?

It continues to be difficult to compare year over year statistics as the post tax credit slump adversely impacted May 2010 sales figures.  When compared to May 2011
statistics, pending sales increased dramatically by 13.2%, new homes on the market jumped 10.8% and total housing inventory shrank 11.8%, the lowest May
count since 2005 according to statistics published by the Minneapolis Area Association of Realtors.

Any increase in sales/decrease in inventory is welcomed yet we should be cautious about drawing any long term conclusions.  As you would expect, housing sales are
strongly tied to an individual's perception of financial prosperity.  Employment remains in a slump and the threat of increasing prices on basic commodities (food, gas, etc.) may dampen any feelings of economic wealth.

There also remains a concern that as people struggle to figure out how to allocate ever tightening budgets, the mortgage payment may lose out to food, utilities, etc. 
leading to the prospect of more lender mediated sales.

What does this mean to you and me?  If you need to sell your home, there's little incentive to try and time the market - waiting until summer, after the holiday,
etc.  Prices have unlikely hit the bottom yet the continued low interest rate remains the one bright light in this market.  If you don't need to sell, wait out the market, it will rise again. (I promise!)

As a buyer, the cost of purchasing a home will very likely never be lower.  Despite media reports, mortgages are available to qualified buyers although the process can be a bit more time consuming.  It also doesn't pay for you to try and time the bottom of the market because interest rates can (and most likely will) rise, causing the cost to buy a home to go up.



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