Homes MSP Real Estate Blog

Get out and buy

In looking back over the week, it seems that the mood has been to 'get out and buy'...

...Last week was the 16th consecutive week of more sales than last year, with an increase of 9.6%. People are buying, in spite of all the economic woes. Of those properties pended last week, 46.2% were foreclosures or short sales. New listings were lower than last year for the 30th of the last 33 weeks, by 18.1%. These factors combine to indicate a shrinking inventory with a higher percentage of lender mediated properties.

...Clients finally had an offer accepted on a foreclosure property after losing out on several other properties due to high multiple bids.

...Other clients closed on a foreclosure property, also after losing out on multiple bids on other property first.

...Another client considering buying a traditional property (NOT foreclosure/short sale) learned that a couple currently living out of the country but planning to move back in 2-3 years was also seriously considering buying this property because they think the time to be buying is now.

...Had lunch with an investor who recently bought a foreclosure property and is planning to buy more while the getting is good.

...Went out looking with another investor thinking it's the right time to buy.

...Read a post by G. Sax on Teresa Boardman's respected St Paul Real Estate Blog about a meeting of a group of major real estate players. He said the keynote speaker, Wells Fargo chief economist Scott Anderson, painted a not so rosy picture of the economy, assessing that 2009 will be mostly similar to 2008...but the overall message he got was to "get out and buy what you can".

The positive side of foreclosures is that prices have come down enough so buyers who were priced out of the market are now able to buy...and they are. Investors are also buying, a sign that this is a time of opportunity.

Fed cuts rates again...

The Fed met this week for their scheduled meeting and as expected, cut rates by 50 basis points.  They cut both the benchmark fed fund rate and also the discount rate.  The discount rate is the rate that banks may borrow short-term funds directly from the Federal Reserve Bank.  In their post-meeting statement they said that "the pace of economic activity has slowed markedly, owing importantly to a decline in consumer spending.  Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects of US exports."

The Fed committee clearly expects inflation to moderate further in the coming months and that is a condition that will tend to be supportive of steady to slightly lower interest rates.  The Fed also raised the possibility that they would cut rates further, although right now the Fed funds rates is at 1.0%.  If the Fed cuts rates further, it will be the lowest it has been since 1958. The next meeting is in December.  The goal of the rate cut is to entice more bank lending and to minimize the economic slowdown of the past year.

What this means to everyone is that your home equity lines of credit and credit card interest rates will drop by .50%.  However, the 30 yr mortgage rates usually do not improve just because the Fed drops rates.  Usually we see an increase or no change in long term rates.  Over the last week as the stock market dropped, rates increased almost daily.  Today an average conventional loan is about 6.375% and FHA is about 6.5%, both depending on credit score, loan to value and purpose of the mortgage.  The market did improve this morning but as the Fed made their  announcement, the bond market got worse again (so did the stock market!).  

Wednesdays Unplugged - Chicken Pad Thai

In spite of the fact that my computer is telling me it's currently below freezing, I think it's supposed to be a nice, sunny day today...a good day to be unplugged...sounds like a good day for a walk.

QUOTE OF THE WEEK

"Once you begin to acknowledge random acts of kindness - both the ones you have received and the ones you have given - you can no longer believe that what you do does not matter." ~ Dawna Markova

RECIPE OF THE WEEK

Our grandson recently celebrated his third birthday and that meant that he got to choose the menu last week. He chose chicken pad thai and pumpkin pie! I had never made chicken pad thai before, it's so easy to pick up as take-out, but I had fun with it. I ended up combining some recipes and it actually turned out pretty good.

 

CHICKEN PAD THAI

• 1/4 pound medium width oriental style rice noodles
• boiling water

• 2 teaspoons corn starch
• 2 tablespoons soy sauce
• 1/2 pound cut up raw chicken

• 1 + tablespoon peanut butter
• 1 + teaspoon Asia chili paste (sambal oelek)
• 1 + tablespoon brown sugar
• 1 + tablespoon cider vinegar

• 3 tablespoons canola oil
• 1 teaspoon minced garlic
• 1 teaspoon minced ginger
• shredded carrots, about 1 cup

• bean sprouts
• fresh cilantro
• chopped peanuts

Place rice noodles in a flat dish/pan and pour boiling water over them to cover. Let sit until softened as you prepare the other ingredients, about 10 minutes or more.

Marinate the chicken in the corn starch and soy sauce mixture.

Mix together the peanut butter, Asian chili paste, brown sugar and cider vinegar. Set aside. (I added the + to the ingredient amounts because it seemed to come up a little short, I ended up making another batch but that was too much.)

Heat a large wok over medium-high heat, and add canola oil. When the oil is hot, add the garlic and ginger and cook until fragrant, about 1 minute. Add the chicken (with marinade) and carrots and stir-fry until browned and cooked through, a few minutes. Add drained noodles and sauce mixed and set aside. 'Lift and turn' to mix to avoid breaking noodles and cook another few minutes. Add bean sprouts, cilantro and chopped peanuts, reserving some for garnish. Add green onion as additional garnish if desired.

Inspections, Permits, and Other Public Property Information

While real estate web sites give the most important information about homes for potential buyers, there are many other free, easy to use web sites that can give you additional information about properties. Before I inspect houses for potential buyers, I typically do a little research on the property so I can pay special attention to certain areas. Here are a few of my favorite web sites - if you love looking at properties online, or maybe just snooping on your neighbors, bookmark these sites.

• Minneapolis One Stop - Minneapolis properties have the most detailed property information available. You can view Minneapolis Truth in Housing reports performed after 2/26/07, and any open repair items. If you're buying a foreclosure in Minneapolis, this is a great way to find out what repair items you'll be responsible for! Permit history is available for properties going back about 20 years - at the permit page, clicking the blue "i" will give you detailed permit information. You can also use this site to look up taxes, owner information, rental and business licenses, and more.

• Saint Paul Property Info - This is a great site for property information on Saint Paul homes, but not as detailed as Minneapolis. This site is not quite as easy to use, but you can use it to look up permit history, Saint Paul Truth in Housing history, rental and animal license history (have pets lived in this house?), and citizen complaint information about properties, among many other things.

• Plymouth My Property Information - For properties in Plymouth, you can view permit details, appraisal history, owner information, and even a photo of the front of the home.

• Hennepin County Property Information Search - Great information on Hennepin County properties. This site gives owner information on the last sale of a property, and decent aerial photos (click on "View Map", and then on the right, click on "2" (Click for "Oblique Aerials"). I frequently use this feature if I can't find a photo of a home I'm going to inspect and I want to know if I need to bring my extension ladder to get on the roof.

*One word of caution for this site - this information is not as reliable as information given by specific cities. I recently inspected a home that was listed by the Realtor and by Hennepin County as a tri-plex, but it had been illegally converted, and would not qualify for a rental license. The City of Minneapolis had the property listed as a duplex, and I as told that Hennepin County just publishes the information they're given - their information is not verified.

• Ramsey County and Dakota County - Similar information to Hennepin County

• Zillow- Gives a surprising amount of information about properties whether they're listed for sale or not. This gives property estimates for all of the properties in neighborhoods, which is somewhat accurate. The web site claims to be within 20% of the sale price of 68% of homes sold in the Minneapolis/St. Paul area. This site also gives sale history, the number of bedrooms and bathrooms, aerial photos, and Google Street Views when available. Try looking up your own home to see how accurate it is (or isn't).

The Money Trail

If you are buying a home you obviously need money from somewhere to pay for it. In fact, an important part of making your offer is showing how you plan to finance it. This may even have an impact on whether or not your offer is accepted.

If you plan to pay cash you will need to prove to your seller that you have sufficient funds to close, but you don't usually have to document the source of the funds.

It's different if you are using a mortgage to finance your purchase, however. Mortgage companies require that you verify the source of your down payment by a paper trail, usually of a couple months. If you have the funds in one of your own accounts they will ask for statements of the last months showing that it is there...if you transferred funds from another account during that time they will ask to see the statements from that account...they want to see the money trail.

Many buyers get gift money from family or friends. If that is the case, the mortgage company may ask for the same documentation from whomever is supplying the funds if the gift money showed up in your account within the last couple months or if they will be giving you the money at closing.

You may think this seems to be a violation of privacy, but what is at play here is fraud prevention. They want to make sure there aren't any fraudulent 'side deals' taking place. For one example, the sale price could have been artifically raised $10,000 and seller gave the buyer $10,000 cash without documenting it...providing the funds needed to close the transaction with no money from the buyer. This is illegal and is punishable by law.

Be aware that you will have to provide proof of where the money you will be bringing to closing is coming from...it's for everyone's protection against fraud. In the midst of the current financial turbulence following the money trail is more important than ever.

Sunday's Site - Blaine National Sports Center

Blaine, Minnesota, made CNN Money Magazine's "Top 100 Best Places to Live" list again this year. They said that residents enjoy its emphasis on adult and youth programs. No doubt this is due at least in part to the fact that Blaine is home to the National Sports Center (NSC), the largest amateur sports and meeting facility in the world.

It's hard to comprehend how big this complex actually is. It has been certified by the Guinness Book of World Records as the largest soccer complex on earth and currently has more than 55 fields!  But it doesn't stop there...they also have eight Olympic-sized ice rinks!

The complex attracts more than 4 million people each year with their facilities for numerous sports, including: soccer, hockey, golf, track cycling, track and field, figure skating, lacrosse, ultimate, broomball, football and rugby.

The Twin Cities Metropolitan Council named Blaine the second fastest-growing city in the metro area this summer. Even during this current slump over 300 new housing permits were issued in Blaine in 2008. As a result, housing opportunities are abundant, serving the needs of every stage of life and income level...from mature neighborhoods to new developments, from starter homes and townhomes to executive housing.

The stunning one-story executive home pictured below is an example of great opportunities currently available for Blaine buyers. Built in 2004 as a model with tons of upgrades, it is located in The Sanctuary, a unique community of executive homes built by different custom high-end builders. Its owners loved living here but have relocated  to another part of the country and it is now available for less than what they paid for it...below replacement cost.

Click here to see  Blaine properties currently for sale around a golf course not far from the Sports Center, including both townhomes and houses. (Please be patient while the link searches for the most current listings...pass your cursor over the dots on the map for property information.) 

Selling In Fall

It's fall and it's almost Halloween!!  I say this every year, but I really don't know where the summer went! 

Next month, I'm going to do a blog about how to decorate for the Holidays and still sell your Home.  But today, I thought I would just talk about this month.....

Selling in Fall means LOTS OF LEAVES and IT'S HALLOWEEN!!

As I've always said....Less is More when it comes to Staging.   So, my best advice for October selling is to rake, rake and rake some more.  Curb appeal is everything and can make the difference between a Buyer walking in to your home or simply passing it by. 

We all love Halloween, but when you're trying to sell, keep it clean and classy.  I love some of the decorations that are out there...just don't make it overwhelming.  These are too much!

    

You don't want a Buyer to focus on the leaves or Halloween decor....you want them to love your home. 

You can still enjoy the Fall season and have your home on the market....less is more!

Jeri Pischke
TENDER HEART TRANSITIONS INC.
www.tenderhearttransitions.com

Falling...

If you haven't taken time yet to appreciate the fall colors and falling leaves don't miss your chance before they are gone...it sounds like temperatures are going to be falling along with the leaves. Did I even hear mention of the SNOW word? Surely it can't be that time already!

Other things are also falling...

Interest rates were falling again this week...I hear below 6% again depending on circumstances.

The minimum condo down payment fell last week from 10% to 3% for at least one mortgage company. That means that instead of needing $20,000 to buy a $200,000 condo it may now be possible buy with only $6,000 down...a huge difference. It obviously helps buyers, but also helps sellers find buyers for their properties.

With some new programs the minimum down payment for a house or townhouse fell again...now possible to get 100% financing in some circumstances and you don't have to be a first-time homebuyer...that means it's now possible to buy with zero down again.

Falling number of homes for sale could mean prices don't fall as much because of more competition for fewer homes...had multiple offers on a traditional property this week. Sales were up 21.1% last week compared to last year, new listings down 10.0%. Total number of homes available for sale is 9.4% below this time last year.

With the march on towards the winter solstice night is falling faster...seems to tie in with the falling leaves and falling temperatures. If your home is listed for sale be sure to turn on the lights so you don't have a prospective buyer falling on your doorstep...

Low Jumbo Fixed Mortgage Rates – over $417,000

With all the turmoil on Wall Street, not only have borrowers with less then perfect credit been affected, but so have borrowers with perfect credit looking at taking out a new mortgage over the conforming loan limit of $417,000. Mortgage loans with balances over $417,000 are referred to as “jumbo” mortgages.

 

Many Wall Street firms that back jumbo mortgages have reduced their appetite for these loans and have increased interest rates. There are still lenders offering competitive fixed mortgage rates on jumbo loans today for around 6.5%, while many other lenders have increased their jumbo rates to approximately 7.5% or higher.

 

There are also lenders who are offering jumbo rates near 5.25% on 5 year Adjustable Rate Mortgages (ARM’s). These 5 year ARM’s have their interest rates fixed for the first 5 years.

 

It can be a great time to buy a home with mortgage interest rates this close to historic lows!

 

Nick Sivertsen, Summit Mortgage nick@nicksivertsen.com

 

Wednesdays Unplugged - Apple Crisp

It's Wednesday, so that means I'm unplugged today. I still can't talk very well because of the fall 'crud' so time away from the phone will be an especially good thing!

QUOTE OF THE WEEK

"Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is a daring adventure or nothing at all." ~ Helen Keller

RECIPE OF THE WEEK

What always seems to go along with the cider stew I made last week is apple crisp...so delicious with fall's fresh supply of apples. I have always preferred crisps to pie...it's all about the filling, not the crust...and I always love something crunchy.

It's best about an hour out of the oven...still warm, but not hot...with the topping still crunchy but tender, before it softens after absorbing the juices of the apples. This version is my husband's favorite...no oatmeal. I usually fill a 4-cup liquid measuring cup to measure the apples so it's closer to 5 cups than four...this time I used Haralson apples.

APPLE CRISP

• 4-5 cups sliced tart baking apples
• 1/2 teaspoon salt
• 1 teaspoon cinnamon
• 1/2 cup brown sugar
• 1/2 cup white sugar
• 3/4 cup flour
• 1/2 cup butter

Butter square pan (either 8" or 9" will work).  Put in apples, sprinkle with salt. Mix flour, cinnamon and sugars together. Cut in butter until crumbly and spread over apples. Bake uncovered at 350 degrees F for about 45 minutes. Serve while still warm with ice cream or whipped cream.