Not so long ago, when an agent took a listing, he or she very well might have an offer on the property before the ink was dry on the listing agreement. Homes that sold for 200K one year might very well sell for 230K the next year. As you know by watching the newspaper and TV reports, this is no longer happening. What is driving these changes?
People were entering the housing market at record numbers due to lending practices. No-down, low and no document loans, less rigorous qualifications, plentiful supplies of money to lend, and first time buyer programs brought more people into the market place that ever before. Also, more people were willing to speculate on real estate after experiencing losses in the stock market after 9-11. All of these conditions created huge demand for real estate and as a result, prices rose.
Is the “Bubble” about to burst?
First of all, Minnesota was not part of the “bubble” per se. Minnesota can boast 78% home ownership, one of the top two states in the country, and we should and are proud of this fact. But to ascertain a good answer to this question, we must consider some other factors.
Minnesota scores favorably in the affordability index which rates a typical family’s ability to have adequate income to cover their mortgage cost for a typical home in the region. While it has been at 132 (meaning that a family has 132% of the necessary income to qualify for the median priced home), it is expected to settle into the 120 range. This is still a very good number.
Employment growth and stability are key factors for a healthy housing market. The Twin Cities enjoys a 3.8% unemployment rate; lower than the 4.8% national rate. And our job growth rate is expected to expand this year. Population growth has been strong and is measured at 37,000 people per year moving into our 13-county region since 2000. Current projections by the Met Council predict an additional 1,000,000 people by 2030.
We are predicting a healthy strong market with appreciation of approximately 3-5% annually. And while we may not be at the record pace set in previous years, we may still be in the top three of the past 100 years. Our overall robust growth, economic health, and quality housing stock paints a rosy picture for the Twin Cities as a great place to buy, sell and own residential real estate
I am thinking about selling. What should I do?
List your property with an agent who understands and knows the market conditions and can articulate their benefit and value to YOU!
When an agent is working with a seller, it is vital that they understand the market and its current climate. It is criticall that they are able to articulate this in a manner that is understandable to you. This includes explaining the importance of correctly pricing your property, a realistic time expectation for receiving an offer, the absorption rate, the price versus time equation, and proper presentation and staging of the property. A good real estate agent is money in the bank, because sellers who list with an agent average 14% MORE in net proceeds than the typical seller trying to go it alone.
I am thinking about buying. What should I do?
Understand the buying process.
That should begin by having a buying consultation with a good real estate agent. A good agent will help you understand the entire process. This is a time when it is okay to believe that this is “all about me”. A good agent will understand this and help you find a lender, establish a time line that works for you, help you to set realistic expectations given your personal financial and location limitations, and screen properties for you to consider. All of this doesn’t cost you a penny because the cost of hiring a good agent is borne by the seller. Remember, it is always a good move to have someone that is representing you and that is held to having to place your interests before their own.
Do you have questions or comments?
Call
Carol LeDoux
Keller Williams Classic Realty
763-227-4950
carol.ledoux@comcast.net
Posted by mannyspar
at 10:18 AM CDT
