Friday, November 30, 2007
Thursday, November 29, 2007
Wednesday, November 28, 2007
Later in the evening, I was cleaning out some articles I had saved from a few years ago and putting them in the recycle bin. One column that caught my eye was from late 2005 and it concerned whether or not the Twin Cities market was going to burst. Written by a regional director of a national franchise here in Minneapolis, the author states that the Twin Cities will not deflate like markets across the nation. In fact, he stated that 2006 would see an increase in the number of home sales and the dollar volume, as well as an appreciation rate of 4-6%.
Now fast forward to reality and yesterday's class. A fantastic resource offered by our Realtor association is the years worth of data they possess on the real estate trends over the Metro area. They can show trends from years, to months, to weeks...and the data isn't boring.
What actually happened in 2006 was that records were set for listing volume, but home sales and dollar volume declined to levels seen back in 1999. Home appreciation was dealt a blow as well. Instead of the 4-6% appreciation rate served up by the author of the article, actual home appreciation rates came in at a meager 0.6%. Yep, that's right, less than 1%. Talk about missing the mark and ignoring the signs on the wall. After some discussion yesterday, the market is showing that 2007 might produce negative appreciation in the Twin Cities and 2008 could be a repeat of this year.
Now I am not trying to be all doom and gloom, because frankly, the doom is over. We just have to wait out a little more gloom. Some things that are changing and helping the area recover are:
- Builders are pulling back on new developments with the number of building permits down 35% from 2006.
- Sellers are getting the hint and pulling homes off the market, choosing to sit and wait the necessary time for the market to normalize. Super-saturation is disappearing and now the market is just "saturated" with listings.
- Home prices are coming down to points where buyers can actually afford them. Housing affordability was nearly non-existent by early 2006. While home prices sky rocketed 2001-2006 by 151%, income did not keep pace and only increased by 51%.
- Negotiating is back!
While this isn't a detailed statistical analysis of the market, I hope it has shed a little light on what has happened to the Minneapolis market without boring you. In February of 2008, this years annual report will be coming out and it will be interesting to see mathematically what has happened. Stay tuned in a few months for my summary of the findings and feel free to send in any questions you have about data in any area of the Twin Cities Metro area and surrounding 13 counties.
Tuesday, November 27, 2007
Friday, November 23, 2007
Wednesday, November 21, 2007
- It goes against parental religious beliefs
- A parent does not personally believe in giving the child the shot
Most states give the parents no option. In fact, on the national news a few nights ago, there was a story about a town in Maryland that sent out notices to 2300 parents warning them that if they did not bring down their children to the county courthouse for vaccinations by a certain date, then the parents would be sent to jail. Are you kidding me? Threatening jail time over a shot! What has our country become that parents no longer have parental rights in deciding what is right for our children?
One shot that I have a hard time believing in is the relatively newer Chickenpox shot. I am of the belief that it is good for our kids to get sick. What good is an immune system if you don't give it the natural chance to build up resistance to disease? Yes, I understand that it is mostly a convenience thing and keeps kids from weeks out of school. But chickenpox is almost a right of passage for kids...I still have a small scar on my forehead. Currently only one shot is needed, but starting in 2008, a second Chickenpox shot will be required in Minnesota for kids entering kindergarten or the 7th grade. I think I will be opting out of that one, siting " conciencioulsy opposed" to it.
Now don't get me wrong, some shots are great and have erradicated childhood diseases that affected thousands...like polio, but as medical science knowledge increases and new cures are found, more and more immunizations will be required for our children. My question is, when does the need to be disease free actually begin to hurt our bodies? Another problem I have is the government telling me as a parent how I need to raise my kids. Just my opinion.
If you have children and are planning on moving to Minnesota, below is a list of immunization shcedules you might want to reference:
Minnesota Immunization Schedule for Babies
Minnesota Immunization Schedule for Kids
Minnesota Immunization Schedule for Teens
If you would like to read more about Minnesota's Law and history on childhood vaccinations, view this pdf.
Monday, November 19, 2007
It's not an easy one to be awarded. For one, an agent has to have production numbers that are verified by a broker. You have to sell alot of homes in order to be considered...no "one home a year" sales allowed. An agent must also complete classwork and additional education that can take years to finish. Classes only come into town so often and sometimes we have to fly to them in another state.
I have to say, the classes have been some of the best I have seen, and I have learned many new things that will help me to continually strive to be a better agent. Remarkably, less than 38,000 Realtors hold the CRS designation nationwide. With over 1 Million members in the nation, those that are Certified Residential Specialists are rare to say the least. In Minnesota, only 3% of Realtors have the production to be a CRS.
So when you think about choosing a quality real estate professional, be sure to ask them about any designations they hold. If they hold the CRS designation, then you can rest assured that they have completed extensive training on residential real estate and a have proven track record of sales transactions. The more transactions an agent has, then the more experience they have. When the average agent completes only three sales a year, is it any wonder that there are so many inexperienced Realtors in the industry. Next time you choose an agent, make sure they have the experience to back themselves up.
Saturday, November 17, 2007
Friday, November 16, 2007
Wednesday, November 14, 2007
The time will eventually come when the builder will stake out the lot, letting you know exactly where the lot lines and set backs are, and where the home will sit in relation to the parcel. At this time, the field manager will meet with you at the site and walk the lot with you. The goal is not only to inform you, but to also make sure you are OK with the positioning of the home. Not that there is anything you can really do, but most builders want to make sure you are a satisfied customer. Some builders will also give you a survey of the lot to keep for your records.
Don't be surprised if it is hard to visualize your home at this point. In most instances, you will feel that the home foundation size looks too small. Don't worry, it is an a illusion, and once the home is framed you will be able to get a better feel for the home.
Another thing to remember is that weather does happen here in Minnesota. Once our meeting with the field manager was complete and the dig date was set, it rained for two weeks straight. Of course it only rains when you least need it to.
To follow the previous posts of this series visit:
Part 3, Shopping Day
Part 2, Picking the Lot, and Part 2.1,
Part 1, Picking the Builder
Tuesday, November 13, 2007
Monday, November 12, 2007
- First Aid Kit
- Shovel (for snow removal)
- Sand Bags
- Warm Clothing and Additional Boots
- Water and small food items
- Tow Chain / Tire Chains
- Road Flares and Reflectors
- Jumper Cables
Also make sure that your windshield washer fluid contains antifreeze. This will keep any ice from building up on your windshield. Don't forget to SLOW down and watch for "black ice". Black ice is ice that cannot be seen when driving and is a huge hazard in the winter, causing your tires to slip and your car to slide out of control.
For more great Winter driving tips in Minnesota, check out the Department of Public Safety website.
Sunday, November 11, 2007
Thursday, November 8, 2007
Wednesday, November 7, 2007
Tuesday, November 6, 2007
Saturday, November 3, 2007
- They built spec homes, then brought in fake buyers. The fake buyers borrowed more than $25 Million to buy these homes. The "solution" of having the builder buy its own houses flooded their business with money to keep it a float, which in turn let them build even more houses. Fortunately the declining real estate market caught up with them and unveiled the scheme.
- The fake buyers were friends and family who bought the homes to obtain the loans. One buyer bought 46 homes at the tune of $20 Million between 2004-2007.
- A bank officer was enlisted to falsify verifications of bank deposits
- An appraiser was enlisted to inflate and over-value the property appraisals.
- A closing agent was enlisted to forge signatures on purchase documents
The real losers are the people in these neighborhoods that bought homes at inflated values and now are seeing surrounding homes being auctioned off at sheriff sales. In New Prague, many homes have already been auctioned off. Other buyers have entered into leases with the option to buy, and are facing eviction from new owners.
It will be interested to see how this all unfolds in the next couple of months. The Parishes have all plead guilty and are currently awaiting sentencing. They could get 5-15 years for their offenses and will have to pay back millions to the bank and affected home owners. People always get their comeuppance. It is nice to see justice served.
Just remember not to group this company in with all the great builders out in the market place, or to have a bad impression on appraisers, closing agents, bank officers, or real estate agents. There are more good people out there than bad...it is just that the media likes to report on the bad more than the good.
Friday, November 2, 2007
Thursday, November 1, 2007
In the past, buyers have been able to receive money from a seller as downpayment assistance for their loan. (Usually stemming from the buyer not having enough money to put down which means they cannot qualify for the loan) With this "help" from the seller always came a catch. To make up for the seller's bottom line being reduced, the seller would usually then bump up the sales price to make up the difference. HUD sees this as a problem because it artificially inflates the value of the home.
Another problem was seen with downpayment assistance programs that would take money from the seller, subtract a fee from the amount, and then give the money to the buyer. Again, home values were being artificially inflated and other parties were benefiting at the determent of the buyer. As a result, HUD has been seeing a higher default rate from these types of loans, compared to non-FHA loans.
Now this does not mean that all downpayment assistance is disallowed. In fact, HUD had made a point that assistance can be given by family members, employers, and any other party that does not have a financial interest in the transaction. Also, builders and sellers can give assistance, but only if it reduces the cost of the mortgage. So for instance, a seller can give a buyer $5000 as a gift, but the seller cannot turn around and raise the purchase price by $5000 to make up loss. This is the true definition of a gift. Who ever heard of getting a gift at Christmas from mom and dad, only to have them ask you for a check for the cost of your shiny new toy.
Hopefully this will help sellers and buyers be more realistic about the purchase price, and cut down on the number of defaults. Only time will tell. Just understand that the rules have tightened up a bit and the government is cracking down on known abuses.
Click here to read the entire rule as published by HUD.