I learned an interesting tidbit during our Tuesday morning sales meeting today that I thought was interesting. 

As of 12/10/11, there were 19,380 Active Listings in the Twin Cities.  Last year at the same time there was 25,249 Active Listings.  We currently have a 5.7 month supply of Properties for Sale.  Last year, we had 8.2 month supply. 

We are definitely in a Balanced Market & that is very Good News!

Even though the market is soft, 81 % of renters still think a home is a good investment.

Here's an interesting fact; One in five baby boomer couples have already given at least one of their children the means to purchase a home.  Either buying it outright, furnishing the down payment or co-signing.  

Here's a short note from Mpls Area Association of Realtors with some current Market Stats.

Tryptophan and chatty in-laws were not able to curb the appetite of local home buyers, as purchase activity easily gobbled up last year's levels. Sellers were apparently stuffed and lethargic, as they brought fewer new properties onto the market than during the same holiday week last year. As we approach the slowest time of year for residential activity, expect transacted dollar volumes and sales counts to weaken from the spring and summer of this year. Keep watching inventory declines; they could have a measurable impact on the Spring 2012 market.

In the Twin Cities region, for the week ending November 26: • New Listings decreased 9.1% to 601 • Pending Sales increased 46.8% to 574 • Inventory decreased 22.8% to 20,318

For the month of October: • Median Sales Price decreased 9.6% to $154,500 • Days on Market decreased 0.5% to 134 • Percent of Original List Price Received increased 0.9% to 91.2% • Months Supply of Inventory decreased 27.6% to 6.3

Mortgage Moment

Here's a quick post from my Go To Loan Officer, John Skoglund.
In the past I was always been an advocate of using the interest deduction on a mortgage to it maximum extent. Now, I advise clients to make extra principal reduction when possible. If they make the extra principal reduction they will be less likely to become upside down on their mortgage. In fact they will have the mortgage paid off in a reasonable time frame. A $100 extra a month can reduce the life of you loan be 4 or 5 years.
Have a great week!

Buy or Rent?

I just received an email from my Go To Loan Officer, John Skoglund. 
3.875% for a 30 year FIXED Conforming is CRAZY!
FHA & VA are 3.75%.
THE TIME TO BUY IS NOW!  One thing is certain, interest rates will go up.

The Monthly Skinny October, 2011

Take a look at this short video (under 3 minutes) to get a quick sense of the current Twin City Real Estate Market.  We're not there yet, but things are heading in the right direction. 

Warren Buffet says…
“Be fearful when the majority are exuberant, jump in when the majority are fearful.”
Sound like the time to buy is here!

 Here's a short article from the Certified Residential Specialist Member Connect which sheds some light on some buying trends.

Survey Reveals Home-Buying Trends Among Baby Boomers
Many baby boomers are delaying their plans to sell their home due to concerns about the economy, but the desire to buy a new home or a second one remains strong, according to a Coldwell Banker survey. An estimated 79 million Americans are part of the baby boomer generation.

A majority of agents surveyed say they have baby boomer clients who already own or are looking to own an investment property, including 22 percent of agents who say that at least half of their boomer clients either own or are looking to own investment properties.

The survey also reveals home-buying differences between older and younger members of the boomer generation. About one-third of agents (34 percent) say younger boomers (aged 47-55) are interested in purchasing a second home, compared to 22 percent who report older boomers (ages 56-64) are interested in a second home.

Nearly one-third (31 percent) say that younger boomers are selling their current home and looking for a larger home, compared to 6 percent who report that older boomers are trading up. Slightly more than half of agents say younger boomers are trying to downsize their home compared to 80 percent who say that older boomers are downsizing. Younger baby boomers are more likely to prefer a single-family home than older boomers (82 percent vs. 47 percent).
Wed, Oct 12, 2011

Well, here's some good news.  Inventory levels are LOW, LOW, LOW (February, 2009 Levels).  That's good news as the supply/demand ratio levels off.  On a lighter note, check out this Monster Pumpkin at the MN Landscape Arboretum. I believe it weighs in at 1200+ lbs.

Weekly Market Activity Report

It seems like every passing week brings not one but two new record declines: inventory levels and mortgage rates. The week ending October 8 was certainly no exception. The number of active listings on the market fell 21.0 percent to 22,434 units. Mortgage rates fell below 4.0 percent for the first time ever. The last time inventory was that low? February 2009.

It's partly due to sellers not contributing many properties to the bin and partly due to buyers doing their part to absorb existing supply. New listings were down 13.0 percent to 1,262 for the week, and pending sales were up 48.3 percent to 851 purchase agreements signed.

The keen observers noticed that September's preliminary monthly numbers came out last week. This round, those preliminary figures were revised slightly as new status changes filtered in. A few noteworthy observations:

• Prices posted the smallest year-over-year decline in eight months.

• Days on market posted its smallest increase in nine months.

• Sellers received more of their asking price for the second month in a row.

• Absorption rates posted their third consecutive month of improvements.

People are always asking me how the market is.  I always tell them that the real estate market these days isn't for the weak of heart.  As goes the economy, so goes the Twin Cities Real Estate Market.  The last line of this post from Mpls Area Association of Realtors says it all.  Jobs, Jobs, Jobs is my battle cry.  

People talk about the national housing market like it’s some static thing, like a toaster. The thing is, there is no national housing market. Just like there is no national weather forecast. That doesn't mean national averages don't have their place, but you don’t grab a raincoat and an umbrella in Miami based on the weather in Seattle. Like the weather, all real estate is local. As we embark on the fourth and final quarter of 2011, let’s take look at our local forecast.

New Listings in the Twin Cities region decreased 16.8 percent to 5,562. Pending Sales were up 37.4 percent to 3,752. Inventory levels shrank 20.7 percent to 22,476 units, a positive supply-side trend that should bring additional stability.

Prices were still soft. The Median Sales Price decreased 6.9 percent to $155,500. Days on Market increased 5.1 percent to 137 days. Absorption rates improved as Months Supply of Inventory was down 22.7 percent to 6.8 months.

A dash of uplifting economic news was overshadowed by debt clouds from the ongoing turmoil in Greece and the threat of bank contagion. Manufacturing activity, construction spending and overall job growth all picked up in September, temporarily calming fears of the dreaded double-dip storm. As for the lending climate, the Fed's recent "Operation Twist" helped push mortgage rates to record lows – under 4.0 percent for the first time ever. Despite the cheap money, "Jobs, Jobs, Jobs!" should still be the battle cry.

Monthly Skinny: September 2011

Here's a little good news. Inventory levels are down, which should help everyone in the coming months. Take a look at this short 3 minute video from the Minneapolis Area Association of Realtors to get the latest "Skinny".

Here's the latest from the Minneapolis Area Association of Realtors.

Weekly Market Activity Report
With the Labor Day slowdown in the mix for the current round of numbers, new listings were down 21.2 percent compared to the 12.9 percent average decline over the past three months. At 1,248 new homes, that now marks 14 consecutive weeks of year-over-year declines in new listings. Inventory levels were also down 21.2 percent to 23,481 active listings, marking 30 consecutive week of declines.

Conversely, buyer activity was up 53.0 percent over the same week last year. That’s a fairly hefty increase, but we can’t call it a one-week anomaly because the three-month average shows an impressive 41.7 percent average increase over the equivalent three months in 2010. The 823 purchase agreements mark 18 consecutive weeks of year-over-year increases in pending sales.

The Percent of Original List Price Received and Months Supply of Inventory metrics suggest a slowly changing landscape.



Monthly Skinny: August 2011

Here's the latest Skinny put out by the Minneapolis Area Association of Realtors. Sales were up & inventory levels are dropping. If this keeps go, the start of the housing recovery may be in hand.  Check out this short video for more details. 

Weekly Market Activity Report

While day traders continue along their roller coaster ride, 997 Twin Cities home buyers made the smart investment in real estate. That's 40.0 percent more than those who made the investment last year. As this year's pending sales trend line rounds off its seasonal peak, you'll notice that purchase demand is coming back in line with historical trends.

Sellers were another story. There were 1,433 new listings, 18.7 percent fewer than this time last year. Seller activity has also likely reached its seasonal peak but remains below historical levels for this time of year. Consequently, buyers have effectively absorbed existing supply. That's a good thing. The number of active listings is down 18.5 percent to 24,362 available homes for sale.

With strong sales and less new supply entering the market, the balance is shifting toward neutral. Both the prevalence and magnitude of seller concessions have stabilized, and absorption rates improved in July after 12 months of sizable increases. Though still slightly lower than last summer, prices have increased nearly 18.0 percent from March to June of this year.

Check out this cool interactive website from the New York Times to help you determine if it's better to buy or rent. CNN just reported that in many places it's become better to buy again, as the rental market is so tight, that rents have gone up. I've seen this in Minneapolis, so if you're on the fence, you may want to give this a look.

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

Monthly Skinny: July 2011

Here's the July Monthly Skinny from the Mpls Area Association of Realtors.

Here's some interesting info from CRS.com, a website for the top realtors. It is regarding Sellers Pricing their home realistically or not. Which category are you in?

Sellers Tend To Overprice Homes
Current home sellers who purchased their homes after the housing boom overprice their homes at a higher rate than those who purchased before or during the boom, according to a recent Zillow survey. Home sellers who purchased their home in 2007 or later overprice their homes by an average of 14.1 percent while those who purchased a home before 2002 price their homes approximately 11.6 percent over market value. Those who bought between 2002 and 2006 price their homes 9.3 percent above market value.

A similar sentiment prevails for homeowners who plan to sell their homes over the next four years. Those who purchased their home after the housing boom are more likely than bubble and pre-bubble buyers to base their asking price on the original purchase price of their homes rather than current market conditions.

“Overpricing homes causes them to stagnate on the market and keeps inventory from decreasing – not a desirable outcome for either the sellers or the market as a whole,” says Zillow chief economist Stan Humphries.
Fri, Jul 15, 2011

The Dogs Days of Summer are here. But at least the twin cities real estate market is hanging in there. Check out the latest info from the Mpls Area Association of Realtors. And as always, if you have any real estate related questions, call, text, email, or Facebook me.

Weekly Market Activity Report

Home sales in the Twin Cities housing market continue to show strong year-over-year growth, but we must continue to point out that this is mostly due to how extraordinarily quiet last year was at this time following the expiration of the federal home buyer tax credit.
For the week ending July 9, there were 788 pending sales, an increase of 40.2 percent from a year ago. The amount of signed purchase agreements seen in recent weeks is similar to the activity for the same weeks in the summer of 2008.
The good news is that fewer homes are being listed, which is helping to dampen any potential for an oversupply problem. Over the last three months, there have been roughly 1,400 fewer new listings than during the same period in 2010, and the inventory of available homes for sale is down 16.1 percent from this time last year.
As always, balance between buyers and sellers plus a healthy, sustainable market is the ultimate goal.

Weekly Market Activity Report

For the week ending July 2, there were 1,057 purchase agreements, a 58.2 percent increase over the 668 seen during the same week last year.
Let's sprinkle in some context. Over the past 10 weeks in the Twin Cities metro area, pending sales have increased slightly from 986 to 1,057. Over the same 10 weeks in 2010, pending sales plunged from a credit-inspired 1,505 to an unimpressive 668. The resulting year-over-year comparisons? Three consecutive weeks of 50.0 percent or greater gains and eight consecutive weeks of double-digit gains in buyer activity.
On the seller side, activity remains comparable with 2010 levels. The 1,396 new properties added to the market were only 0.7 percent under year-ago levels. Strong sales gains coupled with stagnant listing activity is dramatically drawing down inventory levels.
There are currently 25,613 homes being actively marketed in NorthstarMLS. That's down 15.6 percent from the 30,072 seen at this time last year, which is the largest inventory decline since January 2010.

Monthly Skinny: June 2011

Here's the latest Monthly Skinny from the Mpls Area Association of Realtors. It's a 3 minute clip, giving you the latest on the Twin Cities Real Estate Market. Check it out.

Weekly Market Activity Report
Buyer activity in the Twin Cities metro area increased a colossal 59.2 percent over last year, the strongest year-over-year gain since the week ending October 3, 2009. That's a win any way you look at it, especially after 52 of the past 53 weeks showed year-over-year declines in buyer activity.
The post-tax credit drop-off seen at this time last year is driving this shift while current purchase levels have been on a modest but steady seasonal uptick. So far, sales levels are on track with 2007 and 2008 trends.
The change at this time last year is also showing up on the seller's side, where 1,523 new homes were introduced, or 3.3 percent more than the same week in 2010.
Overall, we've seen four consecutive weeks of gains in seller activity and three consecutive weeks of gains in buyer activity.
Inventory levels are preparing to round off their seasonal peaks. The 23,920 Active Listings for Sale are currently 10.6 percent below year-ago levels. That marks the 17th consecutive week of declines, a phenomenon not seen since spring 2010

Weekly Market Activity Report

For only the second time since the end of last year's tax credit, there were more Pending Sales for a given week than in the prior year. A total of 958 buyers entered into contract for the week ending May 14, an increase of 15.4 percent and the highest number of pendings since the week ending May 8, 2010.
But let's not get too excited just yet, because this apparent shift in Twin Cities home purchase activity was primarily driven by the post-tax-credit slowdown seen at this time last year. To illustrate this point, 2011 sales activity has increased 4.1 percent since the final week of April, while 2010 saw a 43.5 percent decrease during the same period.
On the supply side, New Listings have come back in line with historical norms for this time of year. Sellers brought 1,704 new homes online, or 7.7 percent more than the same time in 2010. Again, 2011 activity has been fairly stable over the past month while 2010 activity declined by nearly 33 percent.
The 23,739 Active Listings for Sale have grown slightly over the course of the year, but remain 10.1 percent under 2010 inventory levels or about 2,700 units slimmer. All those crunches are really starting to pay off as we enter bikini season.

Weekly Market Activity Report

New Listings for the week ending April 16 were down 21.5 percent from the same week in 2010 to 1,846 properties. That's a smaller decline than the 3-month average, which is down 26.4 percent. It appears that year-over-year declines in listing activity peaked around the end of March when motivated sellers were eager for buyers to consider their properties during the run-up to the end of last year's tax credit deadline.
Pending Sales, too, predictably fell short of April 2010's credit-inspired five-year high-water mark. The 898 purchase agreements signed were 18.6 percent fewer than last year. That's on-par with the 17.6 percent 3-month average decline. Purchase demand is currently the highest it's been since the week ending May 8, 2010. Sales activity in 2010 peaked during the week that ended April 25 and then fell sharply, so we can expect a very different story in two weeks.
The winner is still inventory, which plunged by 15.4 percent from the same week in 2010. It's worth noting that the number of active listings for sale ballooned at this time last year as sellers moved to take advantage of the increased buying activity. Notwithstanding, we haven't seen declines of this magnitude in nearly 15 months. It's a trend that will mean fewer options for buyers as well as improved market balance.

Monthly Skinny: April 2011

Take a listen to this 3 minute video for the latest "The Skinny" on the Twin Cities real estate market.

Weekly Market Activity Report
Daylight hours may be increasing but contrary to seasonal norms, the number of homes for sale continues to remain about the same. There are now 22,449 active listings in the Twin Cities, 14.4 percent fewer than last year. Nine consecutive weeks of year-over-year inventory decline bring a number of implications—mostly good, some not so good.
On the good side, sellers have fewer properties to compete with. This should quicken market times and increase seller leverage at the closing table. Improving demand with unchanging supply has the tendency to lift prices. On the not-so-good side, buyers have fewer options than in recent years. In light of skyrocketing affordability, historically low interest rates, foreclosure bargains, favorable negotiations and low prices, buyers are still proving to be either very patient, highly cost-conscious or both. Even so, purchase demand has more or less kept pace with non-incentivized 2009 levels.
New Listings decreased for the 14th consecutive week, dropping 19.2 percent to 1,738 properties. Pending Sales hit their highest weekly total this year but still trail last year's pace, down 25.1 percent year-over-year to 840 purchase agreements signed.

There's been a lot of talk regarding Shadow Inventory.  That is inventory that isn't currently on the market, but is either foreclosed on & the bank is holding the properties, waiting for an improved market, or inventory that is in the process of foreclosure.  Too much Shadow Inventory will definitely impace the recovery of the housing market in the next several year. Let's hope that the Shadow Inventory continues to decline.

Shadow Inventory Declines, But Supply Still High
As of January 2011, the number of residential properties in shadow inventory fell to 1.8 million residential properties, representing a nine months’ supply, down from 2.0 million units from a year ago, also a nine months’ supply, according to CoreLogic. Of the current shadow inventory supply, 870,000 homes are seriously delinquent and 470,000 are bank-owned. Accelerated loan modifications and short sales can help reduce the inventory of distressed properties, say economists at CoreLogic.

In addition to the current shadow inventory, nearly 2 million current negative-equity loans are more than 50 percent “upside down” and will likely become shadow supply in the future. New Jersey, Illinois and Maryland have the highest levels of shadow inventory while North Dakota, Alaska and Wyoming had the lowest.

Council of Residential Specialists  Fri, Apr 1, 2011

Weekly Market Activity Report

The week ending March 19 showed a 16.6 percent decline in Pending Sales from the same week last year and a 36.9 percent decline in New Listings.

With a little imagination, spring is in the air. Buyer activity has been gradually on the rise for most of 2011 as prospective buyers seem to prefer sporadic puddles to insurmountable snowbanks. Compared to last year's incentive market, however, the year-over-year declines in purchase activity have been growing as well.

The number of Active Listings for Sale has remained remarkably stable thus far in 2011. In 2010, inventory levels had fluctuated by more than 6,000 units from the first of the year. That volatility has been tamped down below 1,000 units so far this year. With no additional purchase incentive in the pipeline, this should bring supply-side improvements and price stability as demand returns to historically reasonable levels.

Monthly Skinny: March 2011

Here's the latest Skinny on the Twin Cities Real Estate Market. While the news isn't the best, the numbers don't totally reflect the current market, due to last year's tax credit. Still an interesting clip to watch.

Suze Orman vs Warren Buffet: Whose Real Estate Advice Shoul You Follow?

So are you a Suze fan or a Warren fan???  I vote for Warren's Sound Advice.  Check out this article I just ran across on Trulia.

You know Suze Orman - she delivers hardcore financial gut checks to everyday Americans on a regular basis. In her latest book, The Money Class, she also recently delivered a pretty striking declaration: that the American Dream - which, for many, includes home ownership and upward economic mobility - is as dead as a doornail. To back this up, she points to huge numbers of jobless and what she sees as the near impossibility of getting credit these days.

But you might also have heard of Warren Buffett. He just so happens to be the third richest human being on the planet. In Buffett's most recent letter to his company's shareholders, he, too, made a striking declaration of his feelings about owning a home: "[h]ome ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates." And the Oracle of Omaha didn't stop there - he literally raved about home ownership, saying that "the third best investment I ever made was the purchase of my home." Now, that's a big statement from a guy whose investment decisions have earned him a net worth over $50 billion!

Suze says the American financial dream is dead. But Buffett says buy, and buy now. Who's right? (And who's wrong?!)

Orman is right that one extreme version of the American Dream is dead. But not the traditional American Dream of owning an affordable home that appreciates over time. That basic premise of the value of homeownership is valid. But it may be valid for a smaller segment than ever before. Orman believes that renters should save, save, save up every penny and they may never be a candidate to own a home.

Buffett believes now is the time to purchase as affordability has never been better. Buffet wins here; he's right that a home is a very strong investment, with abundant yields, both financial and emotional. And according to our latest survey, the American Dream of homeownership lives on in the hearts of the 72 percent of Americans who say owning the place they live is a part of their personal American Dream.

How can you make sure your exercise in owning a home is set up to be like Buffett's 3rd best investment (#s 1 and 2 were wedding rings, btw), rather than Orman's image of the American nightmare? Here are 3 basic steps Buffett urges every American who owns a home - or wants to - to include in their approach to home ownership.

1. Ditch your "dream home" for a practical pad. When it comes to homes and mortgages, bigger is not always better. What is better is to buy a home that makes sense for your family's future and its finances. In Buffettt's own words, "a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender . . . facilitates his fantasy." Instead of buying dream homes, Buffett went on, the goal should be to buy a home you can afford.

2. When you buy, plan to hold. Warren Buffett is worth $50 billion, and he still lives in the home he bought 52 years ago - for $31,500. Many Americans got caught in the housing crash when they took on mortgages they could only sustain for a short period of time, then weren't able to refinance as expected. Buffett's stock investing advice has long been to avoid making investments you can't hold for at least 10 years. Likewise, buying a home should be done with a long-term plan to avoid catastrophe when home values fluctuate in the short term.

3. Mortgages should have fixed, affordable payments. In his shareholder letter, Buffett points out that a housing company he holds has done vastly better than other real estate and mortgage industry players and attributes their success to the fact that "our approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income." Buffett believes these two mortgage musts are the key to avoiding foreclosure, opining that "[i]f home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did. . .. This policy kept [the company] solvent and also kept buyers in their homes."

Unless you are one of those rare buyers who know their income will increase by a predictable amount at a predictable point in time, like a lawyer prepping for partnership, a good rule of thumb is to stick with a fixed mortgage payment (including taxes and insurance) that's under 30 percent of your take home income.

By Tara-Nicholle Nelson
Broker in San Francisco, CA

Weekly Market Activity Report
For the week ending March 5, there were 717 signed purchase agreements, a decline of 11.4 percent from a year ago when the market was stimulated by the federal home-buyer tax credit. Over the last three months, there have been almost 900 fewer signed purchase agreements than during the same period a year prior.
On the supply side, sellers brought 1,845 new homes onto the market, or 19.0 percent fewer than the same week last year. The three-month average pace of listing activity was 16.6 percent slower than it was a year ago.

Despite the decline in supply, there are a few other metrics that indicate challenging conditions remain for sellers. The Average Days on Market Until Sale currently sits at 157, up 16.1 percent from a year ago. Similarly, the Percent of Original List Price Received is down to 88.2 from last year's mark of 93.2.

In essence, in an environment where it takes homes longer to sell, sellers should be focused on proper pricing and preparation if they want a faster sale. Although there are fewer new listings, smart pricing and marketing are more important than ever.

Weekly Market Activity Report
For the week ending February 26, home purchase activity in the Twin Cities diverged further away from last year's tax-credit-inspired market. There were 606 purchase agreements signed during the week, which made for a 30.2 percent decline from year-ago levels. On average, over the past three months, Twin Citizens made a less-distorted 9.5 percent fewer home purchases than they did during the same three-month period in 2010.

On the supply side, sellers brought 1,238 new homes onto the market, or 27.8 percent fewer than the same week last year. The three-month average pace of listing activity was 16.1 percent slower than it was last year.

Both the 2011 and 2010 inventory levels have begun to climb at this time of year, which is normal. Sellers were more likely to list their home at this time last year knowing that credit-motivated buyers were more determined to purchase. It seems as though sellers wanted to ensure their property appeared in preliminary MLS queries while buyers continued to shop around for the best value up until the deadline.

6 Big Time HomeBuyer TurnOffs

Here's some interesting tips for Sellers from Trulia.com.  These are real issues in the marketplace, so Sellers read through these tips. You'll be glad you did

We've talked about surprising home features buyers LOVE, and about why buyers aren't biting on today's market, despite it being highly affordable. But we haven't talked much about the characteristics of sellers, listings and homes that turn buyers all the way off. Well, not until now!  Here are 6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:

1. Stalker-ish sellers. I know you think you’re being helpful, walking the buyer through your home and pointing out the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits. However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear. They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home - you being there, especially walking right alongside them while they’re in your home, prevents them from being comfortable about doing this, or discussing all the things they would change if the home were theirs. In my experience, the more nitpicky a buyer gets about a house and the more detailed their list of things they would change, the more serious they are about considering making an offer on this place.
What’s a Seller to do?  Back off. Let your home be shown vacant, or leave the house when people come to see it. If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home. If the buyers have questions, their people will contact your people.

2. Shabby, dirty, crowded and/or smelly houses. You already know this one. Yet, buyers constantly marvel. The buyers who come to see your home are making the decision whether to choose your home for the biggest purchase they’ve ever made during the worst economic conditions most of them have ever experienced. Your job is to get your home noticed – favorably – above the sea of other homes on the market, many of which are priced very, very low.
What’s a Seller to do? Other than listing your home at a competitive price, the only tool within your control for differentiating your home from all the foreclosures and short sales is to show it in tip-top shape. Pre-pack your place up, getting rid of as many of your personal effects as possible. Do not show it without it being completely cleaned up: no laundry or dishes piled up, countertops freshly washed, smelly dogs (I have a couple who smell on occasion – no judgment – but don’t show your house with pet odors) or litter boxes cleaned and/or out of the house.

3. Irrational seller expectations (i.e., overpricing). Buying a house on today’s market is hard work! On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years - or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted. The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing. And, in fact, there are so many other homes on the market, buyers don’t have to do this. When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it. If they love it, they’ll wait for it to sit on the market for awhile, hoping the market will “educate you” into desperation, priming the pump for a later, lowball offer.
What’s a Seller to do?  Get real. Get out there and look at the other properties that are for sale in your area and price range. Get multiple agents’ take on what your home should be listed at, and don’t take it personally if their recommendation is low. If your home has much less curb appeal or space or is much less upgraded than the house across the way, don’t list it at the same price and expect it to sell. If you owe more than your home is realistically worth, you may need to reexamine whether you really want or need to sell, or consider a short sale, if you simply have to sell. Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers.

4. Feeling misled. Here’s the deal. You will never trick someone into buying your home. If the listing pics are photo-edited within an inch of their lives, or your home is described as an “approved” short sale when, in fact, the bank approved another offer, now withdrawn, but will require a new offer to go through any sort of approval process (even a truncated one), buyers will learn this information at some point. If your neighborhood is described as funky and vibrant, as code for the fact that your house is under the train tracks and you live in between a wrecking yard and a biker bar, prospects will figure this out. If the detailed information about your home, neighborhood or even transactional position (e.g., short sale status, seller financing, etc.) is misrepresented, the sheer misrepresentation will turn otherwise interested buyers off. If you authorize your agent to “verbally approve” the buyer’s offer, don’t go back the next day demanding an extra $5,000. In cases where the buyer feels misled, whether or not that was your intention, running through the buyer’s mind is this question: If they can’t trust you to be honest about this, how can they trust you to be honest about everything else?
What’s a Seller to do? Buyers rely on sellers to be upfront and honest – so be both. If your home has features or aspects that are often perceived negatively, your home’s listing probably shouldn’t lead with them (like the ad I recently saw with the intro line: “this place is a mess!”), but neither should you go out of your way to slant or skew or spin the facts which will be obvious to anyone who visits your home. Make sure you know what the listing of your home reads like, before it’s published to the web, and that a prospective buyer will not feel misled by it.

5. New, ugly home improvements. Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke). Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color. New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.
What’s a Seller to do? Check in with a local broker or agent before you make a big investment in a pre-sale remodel. They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not). Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal. Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.

6. CRAZY listing photos (or no photos at all). Here at Trulia, we’ve seen listing photos that have dumpsters parked in front of the house, piles of laundry all over the “hardwood” floors touted in the listing description, and once, even the family dog doing his or her business in the lovely green front yard. Listing pictures that have put your home in anything but its best, accurate light are a very quick way to ensure that you turn off a huge number of buyers from even coming to see your house! The only bigger buyer turn-off than these bizarre listing pics are listings that have no photos at all; most buyers on today’s market see a listing with no pictures and click right on past it, without giving the place a second glance.
What's a Seller to do? Check your home’s listing on the sites it's posted on and make sure that the pics represent your home well. If not, ask your agent to grab some new shots and get them online (and say pretty please, pretty please!).
P.S. - Buyers, get your roof inspection or new linens paid for! Sellers, how'd you like to be able to hire a cleaning service for that pre-showing deep clean?

Remodeling Magazine; 2010 Cost vs Value Report

Here's a SUPER link to Remodeling Magazine's Yearly "Cost vs Value Report".  It shows information for the Twin Cities on the costs of 35 home improvement/remodeling projects & the impact on your home's value. 
2010 Cost vs Value Report 

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Weekly Market Activity Report

For the week ending January 29, 2011, purchase activity in the Twin Cities 13-county metro registered 2.0 percent below the same week in 2010. That marked the smallest decline in buyer activity in two months. Pending Sales in the first half of 2011 will struggle to match the high marks set during last year's tax credit but should parallel 2009 levels.

Seller activity has mimicked last year's levels thus far, only about 300 units slimmer. A total of 1,317 New Listings entered the market for the week, 16.9 percent fewer than the same week last year.

Active Listings for Sale increased a modest 1.8 percent from last year. Current inventory levels have remained fairly static over the past five weeks.

Monthly Skinny: January 2011

Here's the latest Monthly Skinny from Minneapolis Area Association of Realtors.  There's some Good News & some Bad News.  Bad ~ We ended the 2010 year with sales dropping 16.8% from the previous year.  Good ~ A slight ray of sunshine was the Median Sales Price rose 2.3% from the previous year.  Let's hope that sun keeps on shining.

Weekly Market Activity Report

Twin Cities home buyers and sellers both showed week-over-week increases coupled with year-over-year declines. The 1,490 New Listings were up over 120.0 percent from the previous week but down 10.7 percent from the previous year. The 475 Pending Sales were up over 70.0 percent from the previous week but down 8.7 percent from the previous year.

Moral of the story? The market has embarked on its typical new year's ascent as we begin our long drive toward spring. We likely won't match 2010 levels until the summer months – when we're finally comparing two nonincentive markets on a level playing field.

Inventory was the metric to watch for the week, as the number of active listings for sale snuck in only 7.2 percent above year-ago levels. That's the smallest inventory increase since the first full week in August 2010. As of January 18, there were 21,687 homes available for purchase. While that's plenty of product for buyers to sift through, sellers will have to ensure that their properties show well and are priced aggressively.

Shrinking Home Sizes

Here's an interesting article I just ran across talking about Home Sizes.  It is projected that the size of the average home will decrease 24% during the ten year period of 2005-2015.

Builders Expect Home Sizes to Keep Shrinking
By Steve Brown Print Article

RISMEDIA, January 18, 2011—(MCT)—Homebuilders are thinking smaller. They’ve cut the average size of new houses and expect it to shrink more over the next few years. “Most builders will build smaller and lower-priced homes in 2011,” said Rose Quint, a researcher with the National Association of Home Builders. “Our experts expect the average home size in 2015 to be around 2,150 square feet.”  That’s down from the 2,377-square-foot average size of single-family homes completed across the country in 2010. And it’s way below the more than 2,500-square-foot average size at the top of the market in 2007.   Nationwide, home sizes are still almost 50% ahead of where they were in the 1970s.

Almost 60% of builders surveyed said they are planning to cut the size of the houses they build during the next few years.  Housing researchers say the downsizing is due to the dour economy and changing consumer tastes.  “Part of it may be temporary (because of the recession), but there are factors behind the decline that are longer-term and will stay with us,” Quint said. Costs savings and demographics are also shrinking houses, she said. “There is an overwhelming desire in the population to keep energy costs down,” Quint said. “Twenty percent of our population will be over 65 in a few decades. They don’t want a big home.”

The recession and drop in home values have also tempered home buyers’ desires. “People don’t have a lot of equity in their homes to roll into a bigger home. Those times are over,” Quint said. “People have come to realize, ‘Let’s buy what we need, not what we don’t need.’”

To get the heft of houses down, builders are ditching living rooms and dining rooms in favor of multipurpose areas. More than 80% of builders say they expect to do away with formal living rooms, and the number of houses with three or more bathrooms and four or more bedrooms is dwindling.  But buyers say they won’t compromise when it comes to storage space. And green features are still growing in popularity with both builders and consumers. More than 80% of potential buyers list energy-efficient heating, air-conditioning and appliances as “must-haves” in their new home.

(c) 2011, The Dallas Morning News.

Home Price Fell 4.1 Percent in 2010 & Outlook for 2011

Home Prices Fell 4.1 Percent in 2010
U.S. home prices posted a 4.1 percent annual decline in 2010, which was a year marked by dramatic price swings, according to the latest monthly Home Data Index Market Report by Clear Capital. Over a 21-week span from late March to mid August, home prices increased 9.7 percent, followed by a 9.4 percent drop over the subsequent 19 weeks from September to December.

Home prices declined in 70 percent of the major markets last year, but only eight experienced double-digit price declines. Six of the 15 major markets that managed to post price gains in 2010 were in California.

Looking ahead to 2011, Clear Capital forecasts home prices to fall an additional 3.7 percent over the next 12 months. Washington, D.C., Houston, Honolulu, Memphis, Tenn., and Columbus, Ohio, could post the biggest price gains, while Virginia Beach, Va., New Haven, Conn., Tucson, Ariz., Dayton, Ohio, and Jacksonville, Fla., are expected to experience double-digit declines. Local unemployment rates and the prevalence of distressed homes are two key factors of local home market performance, the report concludes.                                                           
Certified Residential Specialist Member Connect   Fri, Jan 7, 2011

Weekly Market Activity Report

Buyers and sellers were less active in the closing week of 2010 than they were during the final week of 2009. Following three consecutive weeks of increases, sellers pulled back and listed 677 new properties or 1.6 percent fewer than they did last year at this time. This is slightly below the three-month average but up from the holiday week.

Buyer activity continued along its seasonal decline. The 279 purchase agreements signed for the week were down 26.2 percent from the year prior. While the number "26.2" may pique the interest of marathoners, the rest of us are ready to see the market sustain gains in purchase demand. On average over the last three months, the year-over-year decline is a frigid 20.3 percent.

The number of active listings available for purchase rose 10.5 percent from last year to 21,597 properties. That gain came in slightly under the three-month average change in inventory levels but is in line with historical seasonal changes.

National Association of Realtors 2011 Projected Home Sales

Here's some good news on this cold January day.

Looking ahead to 2011, NAR projects existing-home sales to rise 8 percent to 5.2 million by the end of the year from 4.8 million in 2010, with an additional gain of 4 percent in 2012. The median existing-home price is expected to edge up 0.6 percent to $173,700 in 2011 from $172,700 in 2010, which was unchanged from 2009.

NAR projects that new-home sales will rise 24 percent in 2011 to 392,000, well below historic averages, while housing starts are expected to rise 21 percent to 716,000. Thu, Dec 30, 2010

Ahh, back to work after the holiday sugar buzz has worn off.  Here's a great recap of the year in the Twin Cities Real Estate Market. 

Weekly Market Activity Report
Buyer activity for the week ending December 25 was fairly even with last year – down only 3.3 percent to 379 purchase agreements signed. The lowest weekly sales volume on record is 235 and it occurred during the final week of 2007. Weekly sales volumes have lingered between 400 and 700 units since the beginning of May.

Sellers were outwardly optimistic about future purchase activity as they listed 657 new homes on the market, up a substantial 47.3 percent from the same week in 2009. That's the largest year-over-year gain in seller activity since mid-April 2010.

Inventory levels are still on their seasonal uphill climb, and this won't change until the snow starts melting. At this rate, that could be May! In all seriousness, there are currently 21,161 Twin Cities properties being actively marketed. That's 11.5 percent more than the same week last year. This is nothing extraordinary and is in line with the usual seasonal changes.

As 2010 limps into the history books, we happily bid it adieu as the outlook for the latter half of 2011 continues to look up.