The best holiday gift ever for those considering selling their home or property comes from the real estate market. Minnesota home sales rose 8 percent in last month, thanks to record low mortgage rates and strengthening consumer confidence. The statistics are even better in West Central Minnesota, where a healthy farm economy, low interest rates, low unemployment and a good supply of homes for sale have resulted in an 18% increase in closed sales over this time last year. In addition, sales of lakeshore property in Otter Tail County are up 75% over 2011 and 34% above the state average. News is good for buyers too, as interest rates remain low. However, inventory is also low. More competition could drive prices up, so if you plan to buy, buy now. Let us put our years of experience, plus our huge network of buyers sellers, to work for you. Since we (Karen and Tom) are with a new company…Keller Williams Realty Professionals, it has been a pleasure to be supported by a company that is so client focused! Please check back often…this blog will highlight national trends in real estate as well as local inside scoop info!
The national housing market is showing steady signs of recovery due to a combination of rising demand, declining inventory, and low interest rates. A good indicator that the market will experience a full-force recovery is strongly evidenced by the continual increase in median home prices. Usually, prices slow down after the peak summer sales season, but the current gains are a sign that the housing recovery is self-reinforcing.
NAR Chief Economist Lawrence Yun states, “The market trend is up. Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery. More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales.”
Now is one of the most favorable times in market history to purchase a home due to record-low interest rates. With the uncertainty of the upcoming election and the likelihood that interest rates might not be low for much longer, the time to buy is now.
Home Sales In Millions
Home sales fell 1.7% month-over-month to a seasonally adjusted rate of 4.75 million units, an 11% increase from last year. Distressed homes (which include short sales and foreclosures that traditionally sell for 15%–20% less on average compared to nondistressed homes) accounted for 24% of September sales, up from 22% of sales the previous month; they were 30% in September 2011. Although the number of distressed properties is decreasing from month to month, they are still high by historic standards.
Home Price In Thousands
Home prices have slightly decreased this month, with the current median home price at $183,900, down 1.7% from last month’s median price of $184,900, but up 11.3% from last year. While the month-to-month trend has seen a small dip, the year-over-year trend of increasing home prices is still present. September marks the seventh consecutive month of year-over-year price increases, the largest year-to-date rise since 2005.
Inventory- Month’s Supply In Months
Housing inventory fell 3.3% from last month to 2.32 million existing homes available for sale, a 5.9-month supply. Listed inventory is down 20% from last year’s 8.1-month supply. NAR Chief Economist Lawrence Yun claims, “The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production.” Regardless of the small decline in inventory, a 5.9-month supply still represents a fairly balanced housing market.
Mortgage rates this month continue to decline at or around 3.41%, reaching record lows. While these rates underline an extremely favorable time to buy, “some buyers who could easily afford a mortgage can’t assume they will get one,” states NAR President Moe Veissi. He advises home buyers “to be more focused on the mortgage process in the current environment where lenders and banking regulators are being risk adverse. Shopping for competitive mortgage terms is a good idea, but it may be more important to find a bank that is willing to work with you given your credit history.”
The national housing market continues to recover, indicated by consistent increases in both home sales and prices. Inventories in much of the United States are primarily balanced, which favors neither sellers nor buyers. However, large pockets of the country are experiencing inventory shortages, which puts pressure on prices. Many of the hardest-hit areas during the downturn now have some of the tightest inventories. The return of price appreciation and a stronger market, particularly in those locations, is a welcome signal of returning market health.
“Some buyers are frustrated with mortgage availability. If most of the financially qualified buyers could obtain financing, sales would be about 10 to 15% stronger, and the related economic activity would create several hundred thousand jobs over the period of a year,” states NAR President Moe Veissi.
Despite difficult mortgage qualifying conditions sidelining some buyers, others are still taking advantage of excellent housing affordability conditions, which is evidence of notable stored-up housing demand that accumulated since 2007. With the housing market coming close to a full recovery and mortgage rates hitting new record lows, the time to buy is now.
Home Sales In Millions
Home sales this month rose 7.8% from last month to a seasonally adjusted rate of 4.82 million units, a 9.3% increase from last year. Distressed homes (which include short sales and foreclosures that traditionally sell for 15%–20% less on average compared to nondistressed homes) accounted for 22% of August sales, down from 25% of sales last month and 31% of sales last year. Although the amount of distressed properties is decreasing from month to month, they are still high by historic standards.
Home prices continue to rise due to shrinking inventory and an increase in demand. The current median home price is $187,400, up 9.5% from a year ago and down just 0.2% from last month. This has been the sixth consecutive month of year-over-year price gains, the largest year-to-date rise since 2005.
Inventory- Month’s Supply In Months
Housing inventory rose to 2.47 million homes available for sale—a 6.1-month supply—up 2.9% from last month and down 18.2% from last year’s 8.2-month supply. This marks the ninth consecutive month of inventory at a 6-month supply, a clear indicator of a balanced market and full-scale housing market recovery. Robust improvement in employment is the primary concern remaining, and as that improves the housing market recovery will be on firmer footing for the future.
Mortgage rates this month at or around 3.49% are back at record lows. The decline in the 30-year fixed rates is partially due to a result of the Federal Reserve’s announcement of “QE3.” QE3 is a new bond purchase plan which should help stimulate the ongoing housing recovery. Home buyer affordability remains high for home buyers who buy now while rates are low.
This Monet-esque photo was taken at Maplewood State Park.
Here are some October Events around Otter Tail County. Happy Fall!
Tues. Farmers’ Market, PR
Fri. Farmers’ Market, PR
Sat. Farmers’ Market, PR
4 Open Mic Night, The Spot, FF
6 Harvest Fest Fall Flea Market, Perham
7 Mall Jam, WRM, FF
7 Oktoberfest, Frazee
11-14 Oktoberfest, PR
12 Quilts of Valor Sewing Day, WRM, FF
12 Brewers Festival, VFW, FF
12-14 Oktoberfest, DL
14-20 National Wildlife Refuge Week, PWLC, FF
16 Taste of Fergus Falls, BEC, FF
18 Celtic Music Jam, The Spot, FF
20 UpNorth Show, WRM, FF
20 Nature View Photography Workshop, PWLC, FF
26 Haunted Museum, OTCHS, FF
26 Halloween Party, NYM
27 Sugar & Spice Craft Fair, Frazee
31 Halloween Party, Ashby
Sales of existing homes have continued to improve. In July, one-third of all homes sold were on the market for less than a month. In fact, every region except the West, where inventory was low, saw a rise in monthly sales.
NAR Chief Economist Lawrence Yun believes that affordability conditions are very good for the housing market. “Mortgage interest rates have been at record lows this year, while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand,” Yun said. “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”
With mortgage rates beginning to rise, coupled with strong affordability, now is one of the best times in history to buy.
Home Sales in millions
While home sales grew 2.3% from last month to 4.47 million units, year-over-year sales increased 10.4%. According to the National Association of Realtors, existing home sales rose in July with the national median sales price reaching five consecutive months of year-over-year growth. Distressed homes (which include short sales and foreclosures that traditionally sell for 15%–20% less on average compared to nondistressed homes) allotted for 24% of July sales, which is down from 25% in June, but is 29% below year-ago sales. Even with declines in distressed home levels, sales of these properties are still expected to be higher than the historic average.
Home Price in thousands
Rising inventory supply has placed downward pressure on home prices. The median home price fell 1% from last month, but rose 9.4% compared to a year earlier to $187,300. This marks the fifth consecutive month of year-over-year price gains, which has not been seen since January to May 2006. July’s gains are the most robust since January of 2006 when median home prices rose 10.2% from 2005.
Inventory- Month’s Supply in months
Housing inventory increased 1.3% in July to 2.4 million homes available for sale, a 6.4-month supply. This marks the eighth consecutive month of inventory at a 6-month supply, the threshold for a balanced market, giving both buyers and sellers an equal advantage. As supply continues to hold steady at more balanced levels, so does the idea that the housing market is moving closer to a full-scale recovery.
Mortgage rates at or around 3.66% are up slightly from 3.53%, possibly indicating rates have finally hit bottom. These are some of the lowest rates on record since 1971, increasing the urgency to buy now.
If your tool skills are limited to a screwdriver and a bottle opener, you can still build your own house.
Teal Panels makes structures from molded polyethylene panels that fasten together using nothing more than a Phillips head screwdriver. The wall and corner panels can be configured into pod-like playhouses, fishing cabins, guest suites, and backyard offices.
You can build a 10-by-10-foot structure in about 90 minutes, says Teal Panels president Lawrence Drake. Pretty zippy if you’re into the tiny house movement.
Drake originally designed the panels to make lightweight camper shells for pickup trucks, but quickly realized the potential of the modular design.
“Everything has been designed to use the fewest number of parts and the simplest building techniques,” says Drake. “It’s easy, accessible construction.”
Highlights of a Teal Panels structure include:
- Interlocking tabs help the 21-inch-wide, 20-lb. panels fit together, and waterproof gaskets between the panels seal out air and moisture.
- Panels can be ordered with windows and polyurethane insulation. The panels nest together to reduce shipping bulk, and for compact storage.
- Lightweight canvas roofing is available, but home owners may decide to build their own roofs from plywood or metal.
- Flooring is not part of the package. You’ll have to provide your own using a wood deck or a concrete slab. You can put a Teals Panel structure right on the ground — it’s rot-proof — but you’d be wise to add a PVC vapor barrier over the ground or under a gravel bed to ward off dampness.
- Cabinets, vanities, dinettes, and other accessories are available. Space-saving designs include wooden cabinets that fold up when not in use, and canvas “bag cabinets” that collapse to save space.
Right now, Teal Panels is putting the finishing touches on their production facilities, and Drake estimates the panels will be available for purchase in late fall. Expect a basic wall panel to cost $175 to $200.
And when you’re done assembling your own mini-house, you can use your other tool — that bottle opener — to celebrate.
The national housing market continues to recover, indicated by a balanced supply of inventory and increasing home prices across the country. NAR President Moe Veissi states, “The very favorable market conditions are helping to unleash a pent-up demand, which is why housing supplies have tightened and are supporting growth in home prices.”
However, rising demand has led to tight supplies of affordable homes for first-time home buyers, who now only represent 32% of purchasers. NAR Chief Economist Lawrence Yun claims “a healthy market share of first-time buyers would be about 40%, so these figures show that tight inventory in the lower price ranges, along with unnecessarily tight credit standards, are holding back entry-level activity.”
Regardless, with the market heating up and mortgage rates continuing to hit record-lows, now is one of the most favorable times in history to buy a home.
While home sales declined 5.4% from last month to 4.37 million units, year-over-year sales increased 4.5%. Distressed homes (which include short sales and foreclosures that traditionally sell for 15%–20% less on average compared to non distressed homes) allotted for 25% of June sales, which is unchanged from May, but is 30% below year-ago sales. However, despite the declining levels seen from past years, it is still expected that distressed property sales will still be largely present and higher than the historic average.
Shrinking inventory and a decline in distressed properties on the market continue to drive home prices up. The median home price rose 5% from last month, and 7.9% compared to a year earlier to $189,400. This is the fourth consecutive month of year-over-year price gains, which hasn’t been seen since February to May of 2006, a period of peak performance in the housing market.
Inventory- Month’s Supply
Housing inventory fell another 3.2% in June to a current 2.39 million homes available for sale, a 6.6-month supply. This marks the seventh consecutive month of inventory at a 6-month supply, the threshold for a balanced market, giving both buyers and sellers an equal advantage. Movement out of the three-year buyer’s market is imperative toward reaching a full-scale housing market recovery.
Source: National Association of Realtors
Mortgage rates at or around 3.53% continue to drop and boost home affordability. These are some of the lowest rates on record since 1971, increasing the urgency to buy now.
We’ve all heard “buyer’s market” and “seller’s market” in real estate, but right now it seems to be both in Otter Tail County. Low inventory should drive prices up, but prices have held steady around Fergus Falls while sales volume has increased dramatically over last year. Lakeshore property, where there is always more competition, has dipped only slightly in sale prices. This combined with record low interest rates that have been available for an extended period creates a scenario which can be favorable to buyers and sellers.
If you are on the fence considering a transaction, remember election season will be heating up before you know it, and politics does have effect on financial markets. This could be our “evening out period” before a market shift.
Look for more details from our This Month in Real Estate report, due out next week…