Even though the weather has been cold and snowy, the home buyers are out in full force in the Twin Cities this year! According to the S&P/Case-Shiller study, Minneapolis-St. Paul was one of just 8 US cities with double digit price increases, up 12.1% in January 2013 from January 2012.
According to the Shenehon Center for Real Estate at the University of St. Thomas the median sale price in the Twin Cities in February was $205,500 which is a 14.2% increase over February 2012 and this number is just for traditional sales, not distressed properties. The last few months have shown that sales of traditional homes account for 50% or more of all sales which is a very positive sign.
The biggest market challenge is still the low inventory of homes for sale which is driving up prices. Hopefully with the sales prices on traditional homes increasing more home owners will have better equity positions and will be able to put their homes up for sale.
Builders are also reaping the benefits of low home inventory with more people looking to build. There were 360 building permits issued for single-family homes in the 13-county metro area in January, which is an 80 percent increase over the 200 permits issued in January 2012.
The Minneapolis Area Association of Realtors has released the latest market statistics for the Twin Cities for the week ending November 24.Home buyers entered more contracts and homeowners listed more properties than during the same week of 2011. As a whole, 2012 is shaping up to be quite the pivotal year for housing. With 2013 right around the corner, the smart money is monitoring seller concessions, market times, absorption rates and, of course, home prices. The genius money is watching foreclosure listing and sales volumes, delinquency rates and showing activity.
In the Twin Cities region, for the week ending November 24:
• New Listings increased 0.7% to 607
• Pending Sales increased 12.8% to 608
• Inventory decreased 28.8% to 14,546
According to the 2012 Realtors Conference and Expo, the upward housing trend and market recovery should continue through at least 2014. Mortgage rates are forecast to rise to around 4% in 2013 and around 4.6% in 2014. With the rising housing demand and decline in housing inventory prices are also expected to continue to rise an average of about 5.1% in 2013. Home sales are also expected to increase about 8.7% in 2013.
Foreclosures and short sales will decline in their market share – in 2012 they are about 25% of the market and are forecast to be about 8% in 2014. Distressed properties are starting to be more like an after Christmas sale – the best stuff is all gone but there is still something to choose from.
People who purchased homes at low prices the last few years will see their equity grow in the next 4 years but renters will not only miss out on the equity gains, they will face rent rising at a fairly fast rate.
1. Find a good lender. Your realtor may have some recommendations for you but if you don’t yet have a realtor, it is best to find a local. Local lenders know the market in the area you want to buy in and they will know about any special programs that may be offered.
2. Know where you want to live. Narrow down the parts of town that you would like to live in. You may use criteria such as schools, taxes, drive to work, etc. By narrowing this down it makes setting up a buyer search much easier.
3. Find a Realtor. If you are buying the seller pays the cost of your buyer agent which is another reason you may as well have a Realtor. Find a Realtor that is knowledgeable in your area and that has experience. You need someone you can trust to help you find your new home.
4. Don’t rule out less than perfect homes. Just because a home needs paint or new carpeting, don’t rule it out. If the price is right you will still get a great deal and you can fix it up as you would like.
5. Be ready. Once you are out there looking, if you find a home you just love, you need to be ready to make an offer. Right now with a very low housing inventory, nice homes and good deals are going fast so the sooner you make an offer the better your chances are of getting the home.
If you are ready to start the home buying process, contact me, I can help – I have been successfully selling real estate in the 13 county metro area and Western Wisconsin for over 14 years.