Just Listed brings you the latest news and information from the Twin Cities-area commercial and residential real estate market and beyond from veteran reporters Jim Buchta and Janet Moore.

Posts about Buying

Is the housing recovery on the road to ruin?

Posted by: Jim Buchta Updated: February 21, 2014 - 1:19 PM

The latest report on declines in existing home salesduring January is just one of several indicators suggesting that the house market is slowing, raising concerns about the health of the market. Here's one perspective on that topic from a well-known national source, Jonathan Smoke, who is chief economist at Metrostudy:

"Economists were expecting a 4 percent decline in existing home sales released this morning by the National Association of Realtors (NAR), but the decline was worse at 5.1 percent. Some are saying that weather likely was responsible for at least 1 percent of the decline. Regardless of whether or not you buy into the weather causing some of the decline, the existing home market is looking healthier and healthier. Put another way—I’m not worried about the year ahead based on this data. We have more of a cushion going into the spring selling season than the US Women’s Hockey Team had in the final minutes of the third period yesterday. NAR has data on single family existing sales back for more than 45 years, and that long-term average is a monthly annualized rate of 3.52 million; January’s rate is 15 percent over that level. The abnormal level of investor activity is roughly 10 percent of the volume, so take away that and we still would be at least 5 percent above average in volume. A key underlying trend is that the existing home market continues to move towards a healthier mix as non-distressed, regular resales gain market share. Resales gained 10 percent in share over the course of 2013, rising from 66 percent of total existing home transactions to 72 percent at the end of the year as both foreclosures and subsequent REO sales declined. 2014 is seeing that trend continue as non-distressed regular resales now make up 74 percent of all existing home sales. Even if volumes decline with investors retreating, prices will get support from fewer and fewer heavily discounted distressed sales. When I couple that mix trend with demand shifting towards more established buyers and therefore higher price points, I wouldn’t bet on prices declining. And what did the January report tell us? Median existing home prices were up almost 11 percent over January 2013. When the decline in volume is mainly in the type of transactions you don’t want (distress), the decline is a good thing. Also, please resist the temptation to make the lazy observation that rising mortgage rates have hurt the housing market. I continue to believe that the rise in mortgage rates we have experienced is not having an outsized negative impact. Higher rates and continued tight credit, now potentially worse due to QM implementation, is no doubt limiting demand by shifting more of the market towards higher income and older buyers away from first time and entry level. But, remember this shift is going on while sales remain well above historical standards. The 30 year rate is up a full percentage point over last year, but the bulk of the increase came last spring and summer in fear of the taper. Since the taper actually began, the 30 year rate essentially hasn’t moved. What has moved? A higher share of home purchases made in cash and a higher share of mortgages with an adjustable rate. This shift to more adjustable mortgages combined with a profile of increasingly more credit-worthy, established buyers supports the finding that actual average mortgage rates on home purchases are up only 10 basis points over last year. So much for the headline 30 year rate rise wreaking havoc.

Brad Fisher succeeds Greg Mason as president of Edina Realty Title

Posted by: Jim Buchta Updated: February 20, 2014 - 9:23 AM

Brad Fisher will succeed Greg Mason as president of Edina Realty Title. Mason was recently named president and CEO of Edina Realty Home Services. Fisher has been been the long-time manager of the Edina Realty Plymouth office and has been in the business two decades, including stints in sales, management and training. He signed up with Edina Realty in 1995 as an agent with the Wayzata office, and became manager of the Buffalo, Monticello and Delano offices in 1996.

“I’m very excited for the opportunity to lead Edina Realty Title as we continue to grow our market share,” said Fisher “Our customers can really benefit from the wealth of top-notch products and services offered by the Edina Realty family of companies.”

Fisher served a two-year term as president of the Minneapolis Area Association of Realtors and has been a member of the Professional Standards Committee of the Minnesota Association of Realtors since 2010. Fisher graduated from the University of Minnesota with a bachelor’s degree in economics, and was born in Minneapolis and grew up in several Twin Cities area suburbs. He's lived in Independence for 22 years with his wife and son, where he serves on the Independence city council and as a member of the planning commission.

A quick late-day update on three major Minneapolis apartment projects

Posted by: Jim Buchta Updated: February 19, 2014 - 5:12 PM
A rendering of the 16Twenty building proposed for 1620 W. Lake St.

A rendering of the 16Twenty building proposed for 1620 W. Lake St.

Here's what you need to know about a handful of interesting mixed-use projects at various stages of development in Minneapolis:

  • In the Uptown neighborhood in Minneapolis, CPM Development and Reuter Walton Cos. plans to tear down three turn-of-the century houses at the corner of West Lake Street and James Avenue near Lake Calhoun. to build a mixed-use building that will include six two-bedroom apartments on the third floor The proposal calls for a three-story, 24,000-square-foot building at 1620 W. Lake St. called 16Twenty. The proposal will go before the Committee of the Whole of the City Planning Commission on Thursday.
  • Minneapolis-based developer Alatus picked Bloomington-based Doran Construction to build Latitude 45, a 319-unit 13-story apartment tower that's planned for Washington Av. between 3rd and 4th Avenues in Minneapolis.
  • Various media outlets are reporting that Opus executive, Dave Menke, said the company plans to build a 30-story mixed-use tower, including housing, on what's now a surface parking lot along Marquette Avenue between Fourth and Third streets. The comments were made at a commercial real estate gathering Wednesday in Golden Valley. That site, which Opus already owns, is just north of its Nic on Fifth luxury apartment tower, which is expected to open this fall. The company is also building an office building nearby for Xcel Energy. On the same block, Mortenson Development has proposed building 4Marq, a 30-story apartment tower.

How much salary do you need to buy an average house in the nation's top 25 markets?

Posted by: Jim Buchta Updated: February 18, 2014 - 10:01 AM

How much salary do you need to buy an average house in the Twin Cities and the other top 25 markets in the nation? HSH.com wanted to find out, so they put together a list that looks at the salary you'd have to earn to afford the principal and interest payment on a median priced home in the top 25 markets nationwide.

The Twin Cities, where a buyer would have to have a $33,800 income to buy a $197,000 house, was No. 12 on the list. The required salary in the Twin Cities fell more than $3,300 from the previous quarter because interest rates and home prices were down slightly.

Cincinatti was No. 1 at $19,435, and not surprisingly, uber-pricey San Francisco was last with a required income of $115,510. Check out the rankings for the other cities by clicking here.

Just Listed: Own your own Lake Superior paradise for $2.7 million (but get ready for LOTS of company)

Posted by: Jim Buchta Updated: February 17, 2014 - 11:05 AM

Ever dream of ditching your job in the city and retreating to the woods and water? Here's your chance. The Cascade Lodge on Lake Superior - the largest freshwater lake in North America - is now on the market. For $2.7 million you get a main lodge with 10 rooms and 1 suite, along with 11 cabins, a four-unit motel, a creek chalet, a private residence and a restaurant/pub. The listing includes 13 acres and 500 feet of Lake Superior shoreline.

Bruce Zeller of Lakeplace.com has the listing, click here for a complete photo tour of the property.

Need help with closing costs? A new program offers 3.5% in assistance

Posted by: Jim Buchta Updated: February 13, 2014 - 10:15 AM

Fannie Mae announced a new program today that offers homebuyers in Minnesota and 26 other states up to 3.5 percent in closing cost assistance when they purchase a HomePath property during what's known as the FirstLook period. Here's how Fannie describes the program: 

  • During the FirstLook period, owner-occupant or public entity buyers are able to submit offers on HomePath properties, giving them the opportunity to purchase homes without competition from investors. Fannie Mae recently announced the extension of the FirstLook period from fifteen days to twenty days.
  • To be eligible for the incentive, the initial offer must be submitted between February 14 and March 31 and close on or before May 31. The incentive will offer qualified buyers up to 3.5 percent of the final sales price to pay closing costs. In many cases, buyers could use these savings to buy down their interest rate through upfront points, resulting in additional savings over time.
  • Buyers can work with the lender of their choice to determine if this is an option. Prospective buyers can search for properties and easily identify how many days remain on a property’s FirstLook period by visiting www.HomePath.com. Each qualifying property will be identified by the sales incentive icon. HomePath properties offer buyers a wide selection of options, including single-family homes, condominiums, and town houses.
  • For more details go to www.homepath.com.

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