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Rates on the Rise Will this effect the housing market

(Published on - 3/21/2018 6:34:13 PM)

After his first Federal Open Market Committee (FOMC) meeting as Fed Chair, Jerome Powell announced that the Federal Reserve had increased the Fed funds rate by a quarter point at a target of 1.5 percent to 1.75 percent.

Powell had provided an upbeat assessment of the economy and inflationary trends during his Congressional testimony in the run-up to the meeting and the statement released by the Fed shortly after the meeting reflected the central bank's positive stance on the economy.

"In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation," the bank said in its statement.

These rate hikes impact the housing market as mortgage rates, which have been rising steadily since the beginning of the year are expected to surge further on the back of this hike. The Fed has also been missing on its targets for mortgage holdings which could be another blow for mortgage rates.

“The Fed has been meeting its target on the treasuries but missing on the mortgage holdings,” said Tendayi Kapfidze, Chief Economist at Lending Tree. “Treasuries are down $41.2 billion since October but mortgages are actually up $2.0 billion. Thus the Fed has actually been detrimental to mortgage rates on the one hand by reducing its holdings of treasuries, but providing some support given that its mortgage holdings are not declining.”

“While the housing market could be healthier if kinks in the flow of new construction enabled builders to better meet demand, the overall health of the economy has led the Fed to announce an increase in rates in its meeting,” said Danielle Hale, Chief Economist at Realtor.com.

According to Kapfidze the Fed’s balance sheet normalization plan is set to have its second increase in April, which could raise the treasury security target to $18 billion a month and the MBS target to $12 billion a month. “Upward pressure on treasuries should increase and mortgage rates could see more upside in Q2 following the recent leveling off in rates. If the Fed begins to meet its MBS target, that would result in a further upward pressure,” he said.


Late Fall and Winter is best time to Buy

(Published on - 11/8/2017 5:32:01 PM)

Timing is everything, even in real estate.

Homebuyers in the nation’s densest metro areas could save thousands by purchasing a home in the off-season, according to a new analysis by NerdWallet. Sale prices fall an average of approximately 3 percent, or by $8,300 on a median-priced home, September through November, the analysis found.

Sale prices, as well, tend to keep tracking downward through January and February. NerdWallet’s analysis, which dug into housing activity from the last two years as reported by realtor.com®, recognized an overall average declining trend of 8.45 percent, identifying January as the month with the most metros experiencing the lowest sale prices.

The most considerable drop-offs from summer (June through August) to fall were in three distinct markets: Hartford-West Hartford-East Hartford, Conn., Cleveland-Elyria, Ohio, and Birmingham-Hoover, Ala., according to the analysis. Sale prices in each fell around 8 percent, or by $20,417, $11,450 and $13,386, respectively.

 

In context, the median listing price in September is projected to be $250,000, a new high for the month, realtor.com recently reported. Listing price, however, often differs from sale price—of the 50 metro areas NerdWallet analyzed, the difference between the median listing price and median sale price averaged roughly $17,000 from September to November. Given these findings, homebuyers this fall and winter can expect to have an advantage over sellers, even with record list prices.

Buyers in fall may also have leverage in terms of selection. Realtor.com forecasted the median age of listings in September at 77 days, five days more than in August. With listings longer on the market (and less buyers to compete with), those purchasing past the peak summer season could have the upper hand in negotiations.

Mortgage interest rates, additionally, remain low—though the Federal Reserve hinted at a benchmark rate hike this December. Homebuyers, for now, still have the opportunity to secure a low rate.

Overall, these signs—and now, significant savings—point to an off-season in favor of homebuyers.


Do MN Condo Townhome sellers have to pay HOA fees for documents and dues current letters

(Published on - 3/4/2016 4:20:39 PM)

In MN real estate a seller has to provide certain condo/townhome documents to buyers. The required documents are: Articles of Incorporation (the document forming the Home Owners Association- HOA), the Bylaws, The Declaration, current rules and regulations, the last printed financial and budget statements, MN ReSale Disclosure Certificate (document filled out by the HOA that basically answers questions about dues, assessments and other controlling information). TheMN State Laws give the buyer 10 days to review these documents and can cancel the sale at any time during the 10 day review for any reason. The 10 days start once the seller/agent turns the documents over to the buyer. HOA's and managers or HOA's usually charge sellers for copies of these documents and for the Resale Disclosure Certificate. Prices vary from $50-450. This is a sellers expense. Furthermore for closing the title insurance company needs to know that the sellers HOA dues and any assessments are paid. Thus the title company will require a "Dues Current Letter" from the HOA. HOA's and managers of HOA's charge for this also. This is a sellers charge that is usually seen on the closing settlement statement. Charges vary from $50-275 for the Dues Current Letter.

Condo/Townhome owners should lobby their HOA's and management firms to lower these costs and not try to make money on sellers. Condo Documents are supplied now in pdf formats and truly do not cost the HOA $450. They do cost to process the request but $50-100 is adequate. Same goes for the Dues Current Letter. This should cost very little as this info is easily identified by anyone keeping current records. This should only cost $25 at most. Bottom line: sellers are over paying for these fees


When is it time to sale a house in Minnesota

(Published on - 2/26/2016 6:03:31 PM)

Minnesota has some harsh winters that permit one to walk on frozen lakes, snowmobile, ice fish, broomball, hockey, ice skate, skii and sit by the fire. Moving is not something most wish to take on in winter. At the end of these winters comes spring. The ground thaws, the ice melts, and the heat of summer comes once again. It is this time where the largest number of buyers and sellers come together and move about. Thus the question: when is the right time to sale your home or when is the best time to start looking for a new home?  Historically Minnesota has a larger number of homes for sale in late March and April. As a buyer one should probably look for the right home daily or weekly and can easily do so with all the listings on the web and when the right property comes along buy it. Historically mortgage rates rise slightly in late spring as business increases so early or later one will get a better rate. This being an election year rates usually remain stable. For sellers one should probably list now ahead of the pack to get a jump on the larger more competitive market. Harsh March snow or cold can slow the spring surge in real estate as easily as a couple of nice warm sunny days can propel the market. Best advice: list your home for sale ahead of the pack and if buying look every day online and only go look at those that meet most of your requirements.


When is the right time to sale a house in Minnesota

(Published on - 2/26/2016 6:02:49 PM)

Minnesota has some harsh winters that permit one to walk on frozen lakes, snowmobile, ice fish, broomball, hockey, ice skate, skii and sit by the fire. Moving is not something most wish to take on in winter. At the end of these winters comes spring. The ground thaws, the ice melts, and the heat of summer comes once again. It is this time where the largest number of buyers and sellers come together and move about. Thus the question: when is the right time to sale your home or when is the best time to start looking for a new home?  Historically Minnesota has a larger number of homes for sale in late March and April. As a buyer one should probably look for the right home daily or weekly and can easily do so with all the listings on the web and when the right property comes along buy it. Historically mortgage rates rise slightly in late spring as business increases so early or later one will get a better rate. This being an election year rates usually remain stable. For sellers one should probably list now ahead of the pack to get a jump on the larger more competitive market. Harsh March snow or cold can slow the spring surge in real estate as easily as a couple of nice warm sunny days can propel the market. Best advice: list your home for sale ahead of the pack and if buying look every day online and only go look at those that meet most of your requirements.


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