Congratulations again Nathan and Caitlin, thank you for the great feedback!
Congratulations again Nathan and Caitlin, thank you for the great feedback!
Four Reasons that Now is Time to Sell or Buy in the Minneapolis/St. Paul Housing Market
Real Estate Week in Review
“The Twin Cites home-buying market is one of the most active for millennials, according to a study by Charlotte, N.C.-based online loan company LendingTree,” reports the Minneapolis/St. Paul Business Journal (April 6). “The metropolitan area ranked fifth out of 50 metros analyzed by LendingTree in terms of the percentage of consumers ages under 34 who requested a mortgage through LendingTree in the past 12 months… The Twin Cities ranked fifth with 47.3 percent of all purchase mortgage requests coming from millennials.”
CNBC Reports that as many as three-quarters of millennials are forgoing starter homes in lieu of larger homes they can start a family and possibly even retire in, based on a national survey by Bank of America (Millennial Homebuyers: Go Big, or Go Home, April 6). “What the report brings out is the shift in how millennials are thinking about homeownership. A home is much more of an emotional decision and a life priority decision. Is this a place where I may ultimately want to retire?” said D. Steve Boland, consumer lending executive for Bank of America.
“Not only are they willing to pay more, but they’re willing to do what it takes to afford more. More than half say they would make sacrifices when it comes to their spending on a car, travel, clothing and even their social lives, in order to afford the home they truly want.”
“Rents have taken a sharp turn upward since the beginning of the year,” reports Inman News (April 1). “According to Apartment List’s April 2016 National Apartment List Rent Report, median rents across the country have taken a sharp rise, after brief decline at the beginning of the year.
In March, average rent costs rose 0.4 percent and have increased 2.7 percent year-over-year.”
“Average long-term U.S. mortgage rates slid this week to their lowest level since February 2015,” reports the Star Tribune and Associated Press (April 7). “Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage fell to 3.59 percent from 3.71 percent last week. The benchmark rate was far below the 3.66 percent level it marked a year ago.
The average rate on 15-year fixed-rate mortgages declined to 2.88 percent from 2.98 percent last week.”
“Thinking about buying a home? You might be in luck,” reports CNBC (April 5). “Although home prices have risen rapidly, house hunters got some good news Tuesday. Home price growth is finally moderating, Zillow Group CEO Spencer Rascoff says.
“The story of housing over the last couple of years has been that there’s too much demand and not enough supply. Finally, apartment building managers and real estate developers are building new apartment inventory, and home builders are bringing in single family inventory online,” Rascoff told CNBC’s Squawk Alley. “Zillow data says that, whereas home values were increasing about 5 percent year over year, we’re now starting to moderate around 2 to 4 percent year over year, and that’s because of new supply coming,” he said.
“U.S. housing starts rose 5.2 percent to a seasonally adjusted yearly rate of 1.18 million in February, their highest level since September.”
Image from 123rf.com
Congratulations Nathan and Caitlin on selling your home and closing on your new home this week! Also, congratulations to Geoffery and Holly on your new home!
To find YOUR Pot of Gold, call the Grossman Group at (651) 434-7887 today!
Robbie and Julie Grossman
Coldwell Banker Burnet – Highland Park, Lic in MN
The real estate spring market has kicked off with record short supply, according to a number of media outlets. “Presidents Day weekend is traditionally seen by real estate agents and homebuilders as the start of the spring housing market — the busiest time of year for home sales. The number of listings always rises, and it will this year as well, but inventory is already so low to begin with that even the new listings will not be nearly enough,” reports CNBC.
The national trend is true locally as well. On Tuesday, a report from the Saint Thomas Real Estate Program has demonstrated that the availability of Twin Cities housing has hit a 10 year low. Additionally, the metro median home price was $215, 000 at year end in 2015, 10.4 percent higher than January 2014.
Says Judy Shields, President of the Minneapolis Area Association of Realtors: “I think there is extra buying pressure right now. There’s a lot of people out there looking and not a lot available, so it just magnifies the problem.”
While promising news for sellers, this is not to discourage buyers. Preparation is the key to winning a dream home. Says Herb Tousley, Director of the University of St. Thomas Real Estate Program, “if you are looking for a home, be ready,” Tousley said. “Get your financing pre-approved. If you find something you like a lot in a good neighborhood be ready to act on it right away.”
Shields and Tousley cite, as reasons for high demand and low supply:
Mortgage Rates Approach Record Low
The average rate on a 30 year fixed mortgage is in freefall, reports CNBC, despite the recent minor hike in interest rates. They explain: “Mortgage rates are falling because investors are flooding the U.S. bond market. Mortgage rates follow the yield on bonds that loosely follow the 10-year Treasury. Investors are buying bonds as a safety play in a highly volatile and largely negative stock market. Signs of weakness in the U.S. economy, in addition to trouble in overseas markets, pushed the yield on the 10-year Treasury to its lowest level since 2012, and mortgage rates followed south.”
“…investors are looking for safe havens as global stock markets and oil prices nosedive,” writes Lorraine Woellert, contributor to Forbes. “Money is pouring into Treasury bonds and other safe investments, which helps drive down mortgage rates.”
Companies Flocking to the Heart of the Twin Cities
Companies, not just residents, are flocking to the urban hearts of the Twin Cities, reports the Minnesota Real Estate Journal. Both residents and tenants are drawn to live-work-play areas, like the one expected to come to the Ford Plant site in Highland Park, Saint Paul. “Tenants are focused today on downtown CBDs or suburban markets that have a lot of amenities. They are going after these live-work-play environments. There is a lot of that in downtown [Minneapolis/St. Paul], so companies are migrating toward that market. They want to attract the best employees, and to do that they need a presence in the downtown.”
The Grossman Group is proud to announce that the Star Tribune reached out to us this week to spotlight our listing AT 1731 Eleanor Avenue in their Sunday edition for print February 21, 2016! This home is beautiful and highlights the type of charm that Highland Park homes can offer. We will be holding an open house there today, Sunday February 21 from noon-2pm. Stop on by and check out this wonderful home.
…to our friends, family, and supporters! We LOVE being your area Realtors!
The Grossman Group’s listing at 1836 Wordsworth Avenue in Highland Park has now been sold (sale pending) in under a week. As previously mentioned, we are seeing a lot of activity and interest in our listing on 2077 Scheffer Avenue, also in Highland Park, in this past week. Inventory is low, reducing the competition, and sales prices are high. The market, especially in our local area, is booming, despite the cold weather and snow. Like the groundhogs, we’re seeing signs of an early spring!
Here are some of the factors contributing to the hot market in Minneapolis, Saint Paul, and Highland Park.
Minnesota’s economy is booming, fueling relocation to the area and higher sales prices
Gallup’s annual job creation report has ranked Minnesota number one in the nation for job creation, and recently, CNBC ranked Minnesota best in the nation for business. (Kare11, January 31). Last August, Forbes ranked Minnesota the fastest growing state for technology jobs. Says Charlie Weaver, executive director of the Minnesota Business Partnership, “The business outlook in Minnesota for 2016 is pretty strong because we are blessed with several large corporations, a lot of different industries.” Currently, he reported, Minnesota has more jobs than employees, making Minnesota a hotbed for relocation.
Economists predict further growth in housing
Economists see more growth for US economy and housing in 2016, reports the Star Tribune (January 19). Says David Crowe, chief economist for the National Association of Home Builders, “There are a number of positive indicators out there that make me believe … this will be a good year for the economy and for housing. Not only is housing finally driving some of that, housing is finally moving at a much faster pace than the economy.”
With today’s announcement that unemployment has fallen below 5% with wages rising, (New York Times, February 5) we will continue to see gains in the housing market as buyers have more to spend and take advantage of historically low mortgage rates. Says Diane Swonk, an independent economist in Chicago, “We are likely to have to two rate hikes this year, probably in June and December, but the wage gains are important, so March can’t be ruled out.”
Twin Cities home sales activity has hit a 10 year high
Reports the Minneapolis/St. Paul Business Journal (January 20). The number of homes sold in the Twin Cities is up 13.7% from 2014, and the median sales price increased by 7%. “As sales hit a 10-year high,” said Judy Shields, President of the Minneapolis Area Association of Realtors, “Attractive rates, rising rents, job growth, wage increases and the lowest unemployment rate of any major metro area will continue to be positive factors for real estate.”
2015 ended with the highest existing home sales since 2006, reports Forbes and the Star Tribune (January 22). “Sales of previously-owned homes surged 14.7% in December in the largest monthly increase the National Association of Realtors has ever recorded, the trade group said Friday.
Thanks to the robust finish, 2015 ended with 5.26 million existing-home sales, the highest figure since 2006, when annual sales were 6.48 million… Existing-home sales prices have now increased on a year-over-year basis for 46 consecutive months.”
The Real Estate market is peaking
Reports the Minneapolis/St. Paul Business Journal (February 5), according to a panel of experts at a forum hosted by the business journal. “The Twin Cities real estate market is peaking from an investment and expansion standpoint in almost every sector.”