Flipping Makes a Comeback, Cash For Caulkers & Weekly Twin Cities Stats
December 14, 2009
A number of real estate related articles caught my eye this past week that should have an impact on homeowners in the Twin Cities. They were articles about how flipping houses is making a comeback, a new program that President Obama is proposing dubbed “Cash for Caulkers” which is aimed at making homes more energy efficient and the most recent Twin Cities real estate statistics.
Flipping Makes A Comeback
Last week there was an article in the Wall Street Journal about how Flipping (the investment process of buying a home cheap, improving it quickly and selling it for a profit) is making a comeback – House Flipping Comeback
There is definitely an active group of investors that is both buying foreclosed properties to resell/flip and to purchase as rental units. Just last week I made an offer on a nice starter home in East Bloomington. There were 15 offers on the place – mine wasn’t nearly high enough. With the low prices in the market and interest rates below 5% this is a great time to buy rental properties so the flippers do have to compete on almost every low-priced property that’s listed.
Cash For Caulkers
Also last week, President Obama announced plans to support new legislation that would provide current homeowners with up to $12,000 in rebates for home improvement projects – Cash For Caulkers To Provide Up To $12,000
The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space.
The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.
Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.
These rebates could definitely help sellers to get their homes into a more saleable condition if they are looking to sell or help homebuyers to upgrade a home they want to purchase.
Twin Cities Weekly Real Estate Statistics
The Minneapolis Area Association of Realtors released their Weekly Market Activity Report today for the week ending December 5th, 2009.
Activity was up from the previous week but is down 7.7% from the same period a year ago. We are seeing a slight slowdown in sales, most likely to the previous expiration of the First Time Homebuyers Credit which pushed a lot of activity through November and was scheduled to expire. While the credit did get extended it did pull activity forward into the fall time period which is slowing down a bit now and probably won’t pick back up until we get closer to the new expiration of April 30, 2010.
The most interesting metric from the report was the following one -
Months Supply of Inventory – At 5.7, this is the lowest MSI in more than two years and a full 32.9 percent below last year. This bodes well for sellers in general, but the higher price ranges are still buyer’s markets.
While most people agree it’s a buyers market there continues to be a big reduction in the number of homes on the market which is making this much more of a balanced market, especially in the lower price points.
Conclusion
It’s important to stay on top of the Twin Cities real estate market. House flipping & Cash for Caulkers are just 2 ways that investors and consumers can benefit from knowing what’s available to them. Let me know if you have any more detailed questions on taking advantage of them for your situation – Contact Bill
Dakota County Real Estate Statistics – November 2009
December 9, 2009
The Minneapolis Area Association of Realtors continues to do a great job of collecting and disseminating real estate market data that helps to determine what’s happening with Dakota County real estate. This week they published their December Housing Supply Outlook that takes a look at the supply, demand and pricing trends for single-family, townhouse and condominium properties in the Twin Cities.
Housing Supply Conclusions:
Takeaway #1: In the overall Twin Cities market, home sellers are now getting closer to their original asking prices than they were a year ago. Dig a little deeper, however, and it becomes clear that it’s only the Single-Family Detached segment that’s seeing improvement. The lowest mark for Percent of Original List Price Received at Sale can be found in previously owned condominiums, which post a low mark of 88.6 percent.
Takeaway #2: Home sales continue to look the strongest in the more affordable price ranges. Homes below $190,000 are selling at a 49.9 percent faster clip over the last 12 months than they did the prior 12 months. Above $190,000, sales are down by 10.5 percent.
Takeaway #3: That’s caused some large differences in our calculation of Months Supply of Inventory by price range. The lower price ranges are extreme seller’s markets, while the higher prices ranges still present sellers with challenging conditions.
Market Updates/Statistics For Dakota County
In addition to the broader housing supply analysis, MAAR does market updates on a monthly basis for each city and township in Dakota County. The November 2009 report for Eagan is here below and you can find links to each major market in the county below that –
Apple Valley November 2009 Real Estate Statistics
Burnsville November 2009 Real Estate Statistics
Farmington November 2009 Real Estate Statistics
Hastings November 2009 Real Estate Statistics
Inver Grove Heights November 2009 Real Estate Statistics
Lakeville November 2009 Real Estate Statistics
Mendota Heights November 2009 Real Estate Statistics
Rosemount November 2009 Real Estate Statistics
South St. Paul November 2009 Real Estate Statistics
West St. Paul November 2009 Real Estate Statistics
Drop me an e-mail (bill.wallace@results.net) and I’d be happy to send you these market updates on a monthly basis for your community.
New Short Sales Rules to Benefit Dakota County Homeowners
December 8, 2009
On November 30th the US Treasury Department laid out new guidelines that are designed to help speed up the short sale process by issuing new rules which should benefit Dakota County homeowners. This should help those homeowners that have had a hardship and are at risk for losing their home due to foreclosure.
What is a short sale?
The National Association of Realtors defines it the following way -
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.
What are the new rules?
The best explanation I’ve seen is the following from the NAR Realtor Magazine site -
Government Announces Short Sales Guidelines:
The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly. To qualify under these new guidelines:
- The property must be the home owner’s principal residence.
- The home owner must be delinquent on the mortgage or close to defaulting.
- The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
- The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.
Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments. Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.
Why do they need new rules?
New rules were needed because short sales are taking too long to process, they often are complex negotiations with multiple lenders who are more frequently putting up barriers to success and there continues to be roadblocks to helping consumers through the process when doing a short sale is better for the homeowners long-term credit situation.
Unfortunately, these new rules don’t actually take affect until April 5, 2010. They are scheduled to expire December 31, 2012. Lenders are encouraged to implement it earlier so hopefully the new short sale rules will become a reality for those Dakota County homeowners that need help sooner.
Additional Resources
- This press article does a good job of laying out the new announcement – Treasure sets guidance to simplify “short sales”
- Program details from the US Treasury on the new short sales & deed in lieu of foreclosure program rules – Home Affordable Foreclosure Alternatives
- A previous article I wrote showing how successful short sales were falling behind successful foreclosure sales here in the Twin Cities – Foreclosures Selling Faster Than Short Sales
As I’ve written about before, I’m a Certified Distressed Property Expert and have the processes and knowledge needed to help homeowners avoid foreclosure. If you know of someone facing a hardship contact me via e-mail or cell phone (651-338-0355) for a confidential consultation about the options.
Dakota County Real Estate Sales Analysis – November 2009
December 3, 2009
Yesterday, one of my co-workers made the assertion yesterday that almost all houses south of the river were selling below their 2009 tax assessed value. I thought I’d take up the challenge and do an analysis of all single family homes sold in Dakota County in November 2009 to see if this could be quantified to help set expectations with clients.
What I wanted to do was compare the actual sold price for properties against their tax assessed value and then do some averages across the board. Using the MLS I was able to pull out all single-family homes in Dakota County that sold since November 1st. I specifically, removed any homes that were lender owned or short sales so that it would look only at the traditional home seller. I then exported that data to Microsoft Excel and pulled another report from MLS that showed the tax data for each property. After plugging in that data to the spreadsheet and doing some comparisons and formatting it gave me the following report -
As it turns out, my co-worker was right. Of the 32 homes in my report, 29 of them sold for below their 2009 Dakota County tax assessed value. In fact, on average they sold for WELL BELOW this number at about 90% of value. Although this is depressing data for most people it should help set expectations for clients in this market which is much different than what we’ve experienced in the past. I left the first column (Days on Market) on the report to see if selling faster or slower made much of a difference and it doesn’t look like it.
That said, there are a few homes that sold above or very near tax assessed value and The WE Team specializes in putting together a staging, photography & marketing plan to help our clients get top dollar.
To get your own Market Analysis using some of the most in-depth research along with our custom Market Analysis tools contact me for a no obligation meeting – Contact Form
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