Twin Cities West Metro Real estate

Matt called me one day, having found our home search website, www.MinneapolisHomeViewer.com , saying he was ready to start searching for a  home. He was in a time of transition and major changes in his life, and having new opportunities, wanted to seize this great market and buy a place he could call his own.

We had a buyer consultation at Caribou Coffee and discussed his priorities and needs (no major fixer upper!); connected him with a loan officer and he was pre-qualified within a few days. We went out a few times and looked at homes, narrowing down the options more and more to his priorities, especially having a location that was within 10 minutes or so from his work, and that would offer him a great fenced-in yard for his dogs. One day, we found the right home and made an offer immediately, negotiating a deal before the scheduled open house that weekend. We locked it up and the house was Matt’s!

The inspection went great and Matt returned to the house a couple times to get bids from contractors for some wonderful updates he wanted to make to the house, including a privacy fence, refinishing the rare hardwood floors underneath the carpet and plans for a future deck. The house is going to be incredible! Matt, it was so much fun getting to know you and to see you find a place where you can settle in and add all your own finishing touches!

Buyers don’t live in a spreadsheet. When they find a home to love and cherish, they don’t intellectualize it too much. There are generally fewer homes on the market, they’re selling more quickly and prices in most areas are no longer in a downtrend. Dwindling inventories means there’s less competition and more pricing power for sellers, who are finally starting to be rewarded by strong buyer activity. Interest rates at 50-year lows doesn’t hurt either. Love is in the air and all around the housing market.

In the Twin Cities region, for the week ending April 28:

• New Listings decreased 14.9% to 1,475 • Pending Sales increased 21.4% to 1,187 • Inventory decreased 28.0% to 17,603

For the month of March:

• Median Sales Price increased 7.1% to $149,900 • Days on Market decreased 9.7% to 144 • Percent of Original List Price Received increased 3.8% to 92.1% • Months Supply of Inventory decreased 37.2% to 4.8

Local Market Updates:

Crystal Homes:
There are 46 ACTIVE LISTINGS, 7 NEW LISTINGS, 1 PENDING & 4 SOLD last week.

Golden Valley Condos:
There are 42 ACTIVE LISTINGS, 2 NEW LISTINGS, 2 PENDING & NO SOLD last week.

Maple Grove Condos:
There are 22 ACTIVE LISTINGS, 3 NEW LISTINGS, 1 PENDING & 1 SOLD last week.

Minneapolis Homes:
There are 67 ACTIVE LISTINGS, 3 NEW LISTINGS, 4 PENDING & 1 SOLD last week.

For more local updates, visit The Skinny

We believe that short sales will be a major part of the real estate market in 2012. That is why we have dedicated this entire week to posts exclusively on this subject. We hope that by the end of the week you have a better handle on the need for short sales and a better understanding of the process. – the KCM Crew

It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

Market Watch also addressed the short sale situation recently:

Fitch expects the increase in short sales to continue because of the potential benefits afforded to both lenders and borrowers. Some borrowers may prefer short sales because, though they cannot stay in the property, they often walk away with cash incentives from lenders and healthier credit reports unmarred by foreclosure. For lenders, short sales provide a more efficient and cheaper alternative to the increasingly lengthy and costly foreclosure process.

Why Are the Banks Now Leaning Towards Short Sales?

The simple answer is that the banks lose less money when doing a short sale. The CNN Money article mentioned above explains:

Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.

The Market Watch report breaks it down further:

Short sales…are currently getting completed 20 months after the last payment made on the loan, approximately 10 months less than the average time to foreclose. Shorter timelines reduce lenders’ carrying costs (i.e. accrued loan interest and property taxes, insurance, and maintenance) and eliminate most of the legal expenses associated with foreclosure and liquidation. As a result, loss severities tend to be considerably lower. Historically, for loans with similar attributes, short sales have severities 10%-15% less than REO sales. As the proportion of short sales increases, we expect average loss severities to improve further.

How Many Short Sales Could Be Completed?

JPMorgan has projected that over 500,000 short sales will be done this year. Also, NECN.com recently reported:

RealtyTrac estimates that if the January numbers it found hold up, there would be about 105,000 “pre-foreclosure” sales of homes, most of them short sales, during the first quarter of this year, and at that rate something like 400,000 for the year.

How Long Will Short Sales Be a Major Part of the Market?

The NECN article shows us that short sales are here to stay for some time.

According to the Mortgage Bankers Association, there are nearly 3.5 million homeowners delinquent on their mortgages by at least one month, including 1.5 million who are 90 days or more behind on paying their mortgage. And there are 12.5 million homeowners still who are “underwater,” owing more on their mortgage than their home is worth. That suggests that at the current rates, barring some spectacular economic recovery, it would take years, even decades, for short sales alone to clean up the mortgage mess that remains.

Short sales are here to stay. We must accept this fact and work hard to learn the process and apply it where it makes sense.

Written By the KCM Crew

With signs of a housing turnaround getting stronger, housing experts say buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for your home buyer clients:

1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.

4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.

Source: “Traditional ‘Rules’ of Home Buying Return,” US News & World Report (May 1, 2012) and RealtorMag

There’s that sound again. It’s the media message you once heard on the TV and radio or read in newspapers and on the Internet in days seemingly long gone. Real estate stories are mostly being cast in a generous light. That’s all well and good, but is now the time to list or buy? Answering that question still relies upon many specific, localized, determining factors, but we have reached a place where the process is generally more positive and enjoyable. That big American dream of homeownership is no longer haunted by night terrors.

In the Twin Cities region, for the week ending April 21:

• New Listings increased 13.9% to 1,677 • Pending Sales increased 41.2% to 1,281 • Inventory decreased 28.4% to 17,447

For the month of March:

• Median Sales Price increased 7.1% to $149,900 • Days on Market decreased 9.7% to 144 • Percent of Original List Price Received increased 3.8% to 92.1% • Months Supply of Inventory decreased 37.6% to 4.7

Local Market Updates:

Golden Valley Condos
There are 46 ACTIVE LISTINGS. There were 7 NEW LISTINGS, 2 PENDING & 3 SOLD last week.

Maple Grove Townhomes
There are 20 ACTIVE LISTINGS. There was 1 NEW LISTING, 1 PENDING & 1 SOLD last week.

Minneapolis Homes
There are 70 ACTIVE LISTINGS. There were 6 NEW LISTINGS, 3 PENDING & 3 SOLD last week.