Monday, October 27, 2008
Monday, October 27, 2008
Reports came out today and new-home sales have fell to a 17 year low in the Midwest. Builders are trying to unload the inventory they have and new construction has slowed dramatically. It is becoming more and more difficult for builders to compete with all of the bank-owned properties that continue to come on to the market and discounted prices. Many of these homes were built just a few years ago and were part of what is now known as a "builder buyout." Builders were able to sell current inventory to investors who would make an arrangement with the builder to reap some of the profits of the sale. Then these homes were marketed to renters and eventually payments were not made and now many of these are back on the market at discounted prices as banks try and unload their inventory. Some large developments have gone completely under either through a fraud scheme like the Parish Construction scheme in New Prague or had too big of intentions like high-end developments in the Otsego or Hugo area. It still could be a year or more until we are able to get control of the number of bank owned homes on the market and see some sort of balance come back to our market.
Wednesday, October 22, 2008
Real Estate Market Update
Numbers came out yesterday from MAAR and pending sales continue to increase from last year. The number of homes on the market also continues to decline as the number of new listings last month was lower than a year before. With that said, it still remains a buyer's market. Rates continue to be favorable and money is still available for many types of buyers. Contrary to media reports there still are plenty of loan programs out there to help you buy a home. There are also down payment assistance programs available for many buyers who are looking to buy their first home. There are many fantastic deals out there and buyers are finding them, now is as good a time as ever to get into the Real Estate market. Finding a home and calling it your own is the biggest investment you will ever make. Feel free to contact me and we can discuss what options work best for you.
Tuesday, August 5, 2008
August 5th, 2008 Housing Stimulus Bill Summary
Well George Bush signed the "Housing and Economic Recovery Act of 2008" on July 30th, so what does this mean for you?
1.If you are in MN the new conforming loan limit of $625,500 does not apply. We are still capped at $417,000 if you want conforming loan rates that will be backed by Fannie Mae and Freddie Mac.
2. In the metro area the FHA loan limit for 1-unit residences will be $335,800. The limit is $271,050 throughout the rest of MN.
3. If you are a new home buyer: You can qualify for a tax-credit up to $7500 if you purchase(d) a home between April 9,2008 and June 30, 2009. The credit is repayable over 15 years (basically making it an interest free loan)
4. FHA Foreclosure Rescue: If you have a problematic subprime loan and your lender agrees, you could qualify to have your loan balance reduced to 90% of your current appraised value. You would then have a new 30 year fixed FHA loan. Any equity built after this modification would be split 50/50 with the lender.
5. Seller-funded downpayment assistance programs: (ex. Nehemiah) Are prohibited starting October 1st, 2008. You still can get downpayment assistance from nonprofits or other sources such as churches, employers, or family members
6. Minimum FHA down payment: Will be increased from 3% to 3.5% of the purchase price starting January 1, 2009
These are the main items that may have a direct effect on your next home purchase. If you have any questions or would like additional information feel free to contact me.
1.If you are in MN the new conforming loan limit of $625,500 does not apply. We are still capped at $417,000 if you want conforming loan rates that will be backed by Fannie Mae and Freddie Mac.
2. In the metro area the FHA loan limit for 1-unit residences will be $335,800. The limit is $271,050 throughout the rest of MN.
3. If you are a new home buyer: You can qualify for a tax-credit up to $7500 if you purchase(d) a home between April 9,2008 and June 30, 2009. The credit is repayable over 15 years (basically making it an interest free loan)
4. FHA Foreclosure Rescue: If you have a problematic subprime loan and your lender agrees, you could qualify to have your loan balance reduced to 90% of your current appraised value. You would then have a new 30 year fixed FHA loan. Any equity built after this modification would be split 50/50 with the lender.
5. Seller-funded downpayment assistance programs: (ex. Nehemiah) Are prohibited starting October 1st, 2008. You still can get downpayment assistance from nonprofits or other sources such as churches, employers, or family members
6. Minimum FHA down payment: Will be increased from 3% to 3.5% of the purchase price starting January 1, 2009
These are the main items that may have a direct effect on your next home purchase. If you have any questions or would like additional information feel free to contact me.
Wednesday, April 2, 2008
April 2nd, 2008 MN Real Estate Market Summary
The Dow was up 391 points yesterday as Wall Street is optimistic that the worst of credit crisis is behind us and that the economy is faring better than expected. With all of the money rushing into stocks, treasury yields rose on the 10 year note 13 basis points, causing rates on 30 year fixed rate mortgages to go up by 1/8 to 1/4 of a percent.
In other news...
1.New home construction fell nationally for the 24th straight month
2.National City, Ohio's biggest bank, may sell itself as it faces the prospect of more losses from subprime loans.
3. MN received a $4.3 million federal grant that could help prevent up to 7,000 foreclosures across the state. Some of that money will be used to hire additional foreclosure counselors to help homeowners work with their lenders.
4. A MN real estate investment company, TJ Waconia, is being sued by North Minneapolis communities for fradulent dealings in their communities leading to a high number of foreclsoed properties.
Jim Steel
Fairway Residential Lending/IBR Realty
jsteel@frlcorp.com
In other news...
1.New home construction fell nationally for the 24th straight month
2.National City, Ohio's biggest bank, may sell itself as it faces the prospect of more losses from subprime loans.
3. MN received a $4.3 million federal grant that could help prevent up to 7,000 foreclosures across the state. Some of that money will be used to hire additional foreclosure counselors to help homeowners work with their lenders.
4. A MN real estate investment company, TJ Waconia, is being sued by North Minneapolis communities for fradulent dealings in their communities leading to a high number of foreclsoed properties.
Jim Steel
Fairway Residential Lending/IBR Realty
jsteel@frlcorp.com
Tuesday, April 1, 2008
MN Real Estate Spring Market Update
Spring is here and I would like to take the opportunity to give everyone an update on the mortgage and Real Estate industry in MN.
Long-term mortgage rates remain very low and the Federal Reserve has been lowering short-term rates. The Prime-lending rate is currently at 5.25%. Now is a great time to "Fix Your ARM" and lock in to a low fixed rate. With a combination of the new MN lending laws and the credit crunch the economy is experiencing, it is becoming more difficult for people to borrow money. However, there are still many great loan programs out there and the government is trying to get people to buy more homes. For example, the new FHA loan limit in the Twin Cities Metro Area is $365k, which is about $90k higher than the old limit. By raising this limit the government is willing to insure more home mortgages as they are trying to get lenders to start borrowing money again. Now is a fantastic time to purchase a home.
With all of the tightening is the mortgage industry, inventory of homes on the market remains very high. The number of new listings is down but the number of homes selling each month is down as well. The number of foreclosures keeps growing and you see more and more bank owned or short sale properties on the market all the time. Because of this, the Twin Cities Metro Area and some additional counties throughout MN are considered to be in a "declining market." While the news seems glum, Real Estate is cyclical and values will go up once again. Homeownership is the staple to building wealth.
Long-term mortgage rates remain very low and the Federal Reserve has been lowering short-term rates. The Prime-lending rate is currently at 5.25%. Now is a great time to "Fix Your ARM" and lock in to a low fixed rate. With a combination of the new MN lending laws and the credit crunch the economy is experiencing, it is becoming more difficult for people to borrow money. However, there are still many great loan programs out there and the government is trying to get people to buy more homes. For example, the new FHA loan limit in the Twin Cities Metro Area is $365k, which is about $90k higher than the old limit. By raising this limit the government is willing to insure more home mortgages as they are trying to get lenders to start borrowing money again. Now is a fantastic time to purchase a home.
With all of the tightening is the mortgage industry, inventory of homes on the market remains very high. The number of new listings is down but the number of homes selling each month is down as well. The number of foreclosures keeps growing and you see more and more bank owned or short sale properties on the market all the time. Because of this, the Twin Cities Metro Area and some additional counties throughout MN are considered to be in a "declining market." While the news seems glum, Real Estate is cyclical and values will go up once again. Homeownership is the staple to building wealth.
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