Park Company Realtors Blog

Go Meat!

I love the Hillshire Farms "Go Meat" commercials...I'm not sure if it's the Saturday Night Live-esque cheerleader skit or just the general enthusiasm for meat, but I love them.

Our "Go Meat" moments have come to us in the form of statistics behind what's going on in our market...you know, "The Meat." If you missed our May Market Update with Kari Myhre and Jenny Schuster, take 2 and 1/2 minutes to check it out.  They shared some great information such as our April average sales price increasing $14,000 over April, 2010 due in large part to the expiration of the home buyer tax credits, but more importantly...11 more homes priced over $300,000 sold in 2011 than in 2010.  That's big. Really BIG. 

What's the big deal?.  Read If Prices Are Falling Why Are the Rich Buying? on the KCM Blog. People with some degree of wealth are realizing that with today's low interest rates, along with the unfortuate decline in prices it is the time to buy. The best statement in the entire blog post is "They realize that the COST of real estate is a much more important than its PRICE."

The second stat I wanted to draw attention to is the Inventory of Homes. Kari shared with us that the inventory of homes is under 7 months.  What does this mean? At the rate homes are selling, in less than 7 months, we would run out of homes to sell if no new homes were brought into the market. That is a balanced market - good for buyers and good for sellers and the scales aren't tipped greatly in either direction.

Now you've learned the "Real Estate Meat" for the month...it might change your frame of mind when you hear "Go Meat!"

Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors

 

 

May Video Market Update

Download Apr 11 Market Update Broken Down by Area

Dear Zillow, You Are In Need of a Geography Lesson.

As part of my job, I am constantly looking at market trends and statistics.  Yesterday, a post on Inman News' Facebook feed caught my attention. "Interesting stats coming from Zillow this AM - Of the 132 markets covered by Zillow, 97 percent saw home values decline."

Not totally excited, I clicked on their link and came across Zillow's Home Value Index.  Below is the screen for North Dakota...do you see something missing?

 
Evidently, Fargo is not in North Dakota, but in Minnesota, according to Zillow.  Thus the title for this blog post. 

Yes, Zillow, we do serve Minnesota, however if you are going to categorize our market by Fargo, you should probably correctly identify the state...that is Fargo, NORTH DAKOTA. *For the record, the Fargo-Moorhead area's median list price in April 2011 is $154,900 down from $159,900 in April 2010.  Zillow's data is a few thousand dollars off.

Many people use Zillow for its fancy bells and whistles...market statistics, Zestimates, etc.  I agree that Zillow provides some very visually appealing graphs, charts and widgets.  However, after finding this "little" error, it makes me question the reliability of their information even more than I had before.  Frankly, their Zestimates are rarely accurate and their comparables are sometimes so far off the mark, they aren't comparing apples to apples, but apples to watermelons. (I once saw a 2-story single family home in Osgood compared to a rambler twinhome in the same neighborhood (YIKES!))

If you would like accurate market information, look to your LOCAL real estate professional.  On this blog, we consistently post monthly statistics and base our information on what is happening here, not in California or New York.  Park Co. Realtors' sales associates are armed with the most current information for your neighborhood and home style.

With that said, we are "amping up" our market updates - be sure to keep an eye on Facebook, Twitter and YouTube later this week - we hope you like what you see!  In the mean time, here's to hoping Zillow pulls out the map and checks our location!

*Source: Fargo Moorhead Area Association of Realtors

Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors

March Market Update

Spring has finally arrived in the Red River Valley!  The weather is great, but we sure could do without the flooding.  Our market stats say the same thing. 

Usually, we compare year over year but this month, it's necessary to compare 2009, 2010 & 2011 so that we are comparing apples to apples.  2009 and 2011 are similar mainly because of our spring flood event. 2010 is quite different - (1) flooding was not as severe; (2) the home buyer tax credits were expiring April 30, which created an influx of "last-minute" buyers.

When comparing 2011 to 2009 - business is up in regards to pending sales and sold listings.  Active listings and new listings are down 7% & 11%, respectively. It is not too far of a stretch to say that some folks have decided to hold off on listing their homes this year until after the flood. 

If 2011 follows 2009's trend - business will spring back nicely in April and May.  The one factor to consider is that in 2009, we had tax credits for first-time home buyers that were to expire November 30, so that may have created an influx that we many not see in 2011.  However, with continued low rates and our stable, local economy - homeownership continues to be an option many renters consider.

Please note that the comparison chart above is for January 1 - March 31 and the March statistics below are just for March.

Download Download Mar 11 - Statistics broken down by area.

March 2011 (Residential Only) for the entire MLS
Current Active Listings: 1,333
Avg. List Price: $187,649
Avg. Days on the Market: 174

Total SOLD Listings: 144
Avg. List Price: $155,098
Avg. Sales Price: $152,407
List Price/Sold Price Ratio: 98%
Avg. Days on the Market: 147

Absorption Rate: 6.61 months of inventory

SOURCE: Fargo Moorhead Area Association of Realtors

What's Ahead?
One date to keep in mind if you're thinking of buying this spring...April 18. 

On April 18, FHA Monthly Mortgage Insurance Premiums go up .25 basis points or approximately $20.83 per $100,000. ($30 on a $160,000 home).* FHA requires mortgage insurance for borrowers making a down payment of less than 20 percent.

Effect on buyers: Let's say you are looking at a mortgage on a $160,000 home with a 10% down payment for 30 years. Add a forecasted mortgage rate hike of .3% APR in the second quarter and you're looking at an additional $56.90 to your monthly payment or $7,100 less in buying power. Since the rate hike takes effect on April 18 - any purchase agreements not accepted by that date will be subject to the new rate.

February Fargo-Moorhead Area Market Update

Before the time of tax credit deadlines and real estate booms, February has typically been the start of spring in real estate.  Much like our weather this year, spring in real estate is a bit delayed.  If you've spent any time in Minnesota or North Dakota, you've come to realize that the motivation to do something typically coincides with the weather warming up and we see that with real estate. Many buyers are "window-shopping"...we see it in our website visits, our phone calls and our text for info requests - they seem to be waiting for warmer weather to make decisions!

When we share statistics, many times it is based on percentages. Numbers, oftentimes, tell the story more accurately.  For February if you look at percentages, you may think our market is way down, however, a closer look at numbers tells something different.  Sold listings are down 41 units, yet our inventory has actually decreased 41 units as well.  With less inventory, naturally there are fewer sales.

 

To point out more bright spots, check out the sold listings below. Several prices ranges have had more sales in 2011 than 2010. You'll notice it is more so in the $180,000+ prices ranges, which may also contribute to the higher average sales price in 2011 ($161,956 vs. $144,184 in 2010).  We are still seeing the hangover effect of the tax credits in the typical first-time homebuyer price ranges. 

 
 
 
Download Feb 11 - Statistics broken down by area.

February 2011 (Residential Only) for the entire MLS
Current Active Listings: 1,368
Avg. List Price: $186,706
Avg. Days on the Market: 169

Total SOLD Listings: 92
Avg. List Price: $166,597
Avg. Sales Price: $161,956
List Price/Sold Price Ratio: 97%
Avg. Days on the Market: 126

Absorption Rate: 6.5 months of inventory

SOURCE: Fargo Moorhead Area Association of Realtors

What's Ahead?
One date to keep in mind if you're thinking of buying this spring...April 18. 

On April 18, FHA Monthly Mortgage Insurance Premiums go up .25 basis points or approximately $20.83 per $100,000. ($30 on a $160,000 home).* FHA requires mortgage insurance for borrowers making a down payment of less than 20 percent.

Effect on buyers: Let's say you are looking at a mortgage on a $160,000 home with a 10% down payment for 30 years. Add a forecasted mortgage rate hike of .3% APR in the second quarter and you're looking at an additional $56.90 to your monthly payment or $7,100 less in buying power. Since the rate hike takes effect on April 18 - any purchase agreements not accepted by that date will be subject to the new rate.

Bring on Spring - we are ready!

*Source: http://www.myfhamortgageblog.com/2011/02/fha-changes-to-mortgage-insurance-april-18-2011-alameda-ca/

Six Things Every Buyer Needs to Know

Dewey Uhlir, one of our veteran agents, recently attended the CRS Sell-A-Bration in Florida and brought back some great information!  One of the presentations he shared information from was The Economy of Selling by Pamela Ermen. Her presentation focused on the six things every buyer should know.  It is excellent information for buyers who are going to make an offer...an educated offer.

1) Unemployment Rate.The unemployment in the Fargo-Moorhead metro area in January 2011 was at 4%.  The national rate is 9.1%. Unemployment is strong indicator of economic stability in a community. Economic stability means home ownership is attractive and viable for most everyone, not just you. See more economic indicators from GFMEDC.

 
2) Housing Affordability. Trulia.com has a feature called Motivity which calculates whether it is best to rent or best to buy in particular markets.  They calculate this by dividing the median sales price by the median yearly rent. Trulia doesn't provide figures for our area, so here are our calculations.  For the Fargo-Moorhead area, median sales price for Feb. 2011 = $133,500, Avg. yearly rent= $9,600/$800 per month - affordability ranking to be 13.9, which falls into the more afforable to buy category. 

3) Home Sales. For 2010 in the Fargo-Moorhead market, 2,831 of the 5,660 (50%) listings taken sold. Looking back through 2005, that percentage has dropped but not all that dramatically since 2007. There is competition amongst buyers, just as there was three years ago but not as intense as 2005 (the boom of real estate).

4) Interest Rates. Today interest rates are at 4.875% APR (see disclaimers here) for a $100,000 loan for 30 years.  Rates are favorably low for buyers, which means more house for your money.

5) Foreclosures/Short Sales. According to our MLS information, there are 82 active foreclosure or short sale listings in our market.  That comprises 5% of the market, meaning 95% of sellers are not in distress nor willing to give their homes away.

6) Vacancy Rates.  Since there is no formal rental association in our market, these stats are hard to come by.  However we did visit with Neil Eriksmoen from Appraisal Services in Fargo, who does a periodic survey and calculates vacancy rates.  His latest report (December 2010) findings are to the right. Neil stated these rates have been going up over the last two years (as interest rates have gone down). Impact to potential buyers (renters): When interest rates rise (they are expected to go up to 6% by end 4th quarter 2011), rentals pick up (think less home for the money), which lowers the vacancy rate. A lower vacancy rate tends to raise rental rates.  Buying a home at a lower interest rate now will save you money in the long run (think equity in your home).  In addition, a fixed rate mortgage can guarantee your principal & interest payment will not increase like rent.

What do these six factors ultimately mean for buyers?  First off, this demonstrates that it is a GREAT TIME to buy.  Secondly, our local market is stable.  Most sellers are not desperate to sell their homes. They, too, are most likely buyers and would like to move.  Sellers simply want a reasonable sales price for their home (which is in a stable market with low unemployment, great affordability and low interest rates). Lastly, there are other buyers in the market.  Your offer may be competing with others and if you truly want a particular home, an attractive offer may seal the deal! 

Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors

 

Do Foreclosures & Short Sales Affect My Home’s Value?

We would be lying if we told you a neighborhood foreclosure or short sale has no effect on your home’s value.  In contrast, we're going to tell you not to worry about it, too much. We are lucky to live where we do – lenders, appraisers and Realtors®  took very good care of our communities in the “gold rush of real estate”, relying on strict lending practices, moderate inflation of home values and common sense.

What really decides the value of your home?  The quick and easy answer is “what a buyer is willing to pay for it.”  That answer would make our jobs as Realtors® far easier, but realistically when an appraisal is completed, that is what the bank sees as the value of your home.  This is where short sales or foreclosures typically affect your value.

In our area, there are relatively low rates of foreclosures and short sales, which keeps our market values stable.  Most appraisers work hard to find comparable sales at market value, meaning that the sellers were not under distress.  Unfortunately, sometimes there are so few (or no) recent sales in an area that a foreclosure or short sale has to be used.  Most appraisers who use a foreclosure make sure they explain that: it is a foreclosure, it is not a good comparable and it isn’t given a lot of weight.

When we list a home and there are foreclosures or short sales nearby, we are up-front with our sellers and we discuss it.  It sometimes comes into play when pricing a home to sell, as much as we wish it did not.

The best advice we can give you to protect yourself and your neighborhood is to keep building equity in your home – it is the best safety net.  Be vigilant about paying off home equity loans and home equity lines of credit, and keeping current on your mortgage. 

Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors

 

January 2011 Real Estate Update

After spending the month hoping January real estate numbers turned out better than our weather, it's safe to say - The Numbers Are Better Than January's Weather!

Overall, our numbers are somewhat comparable to 2010, with the exception of the number of pending listings, which were down quite a bit.  Average sales price is considerably higher than last January, and that could be attributed to the fact we are seeing more sales activity in homes priced above $180,000. The previous years' tax credits did a number on our statistics and it'll be nice to see how 2011 ends up after a foreseeable "normal" year in real estate.

 
Download Jan 11 - Statistics broken down by area.

January 2011 (Residential Only) for the entire MLS
Current Active Listings: 1,472
Avg. List Price: $186,433
Avg. Days on the Market: 165

Total SOLD Listings: 98
Avg. List Price: $169,682
Avg. Sales Price: $166,099
List Price/Sold Price Ratio: 98%
Avg. Days on the Market: 109

Absorption Rate: 6.5 months of inventory

SOURCE: Fargo Moorhead Area Association of Realtors

What's Ahead?
Surprisingly, interest rates took a jump today, above 5%.  From what we'd been hearing it seems that rates would slowly rise this year, but economic reports, etc. are moving the mortgage rates earlier than anticipated.  If you're thinking about purchasing a home soon, it would be in your best interest to get in to visit with a lender this week to evaluate your options.

The weather's warming up! Happy House Hunting!

Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors

 

 

Homeownership Matters

 

 

 

 

 

 

 

 

The National Association of Realtors recently completed the 2010 Home Buyer and Seller Survey and concluded two simple facts. (1) Homeownership encourages stability. (2) The longer you own, the better your investment.

 
Some interesting findings the survey showed include:

• First-time buyers plan to stay in their homes for 10 years; repeat buyers plan to stay for 15 years.
• A typical seller who purchased a home eight years ago had a median equity gain of $33,000 – an increase of 24%.  Sellers who remain in their homes for 11-15 years saw a median gain of 40%.
• 85% of home buyers see their home as a good investment, nearly half think it’s a better investment than stocks.
• House flipping is virtually nonexistent in today’s market, with the exception of experienced investors, who are able to finance their own projects and have a good understanding of market conditions.
• 56% of entry level buyers financed through an FHA Loan, 37% through a conventional loan and 7% used the VA loan program.  (Below is a list of some items that often need to be addressed when buyers finance through an FHA or VA loan.)

Guidelines to Prepare Your "Someday-For Sale" Home for an FHA Inspection

These are some items that often need to be addressed when buyers finance through an FHA or VA loan. If you’re thinking about projects that can get your home sold, these items should be at the top of your to-do lists!

The cause of wet basements must be cured.

1. Chipped or peeling paint on any property built before 1978 must be scraped and painted (interior & exterior).
2. Roof should have 2-3 years of useful life remaining.
3. Staircases should have handrails.
4. Cover exposed electrical wires and repair leaky plumbing.
5. Structural foundation problems need to be repaired.
6. All utilities must be in functioning order.
7. Broken windows need to be repaired and they also must open.
8. Access is needed to the crawl space & attic.

    

 

 

October Market Update

 

 

 

 

 

 

 

 

 

 

 

 

 

There are two sides to every coin.  For October stats, we say "THANK GOODNESS" there are two sides.  Year-over-year comparison for October shows some deep gouges, especially in homes under $250,000 - which makes up the bulk of our market (thanks, tax credit expiration).  Interestingly enough, homes priced over $250,000 seem to be experiencing a bit of a turn-around. 

Let's look at October
In the under $100,000 price range, we are down 31% compared to October 2009; in the $100,000-$140,000 price range, we are down 65% (ouch) from October 2009; in the $140,000-$180,000 price range, we are down 61% (ouch again) from October 2009; in the $180,000-$250,000 price range, we are down 60% (ditto) from October 2009.  However, the number of sold homes over $250,000 are up 30% (Yeah!) for October.

The good news...year-to-date comparison over 2009 isn't so bad. We are down in the under $250,000 prices ranges, however most of those price ranges are down anywhere from 4 to 25 sales.  The $100,000-$140,000 price range did really take a hit this year (down 161 sales) and it maybe that after two years of first-time buyer tax credits, that market is a bit tapped out.  However, the beauty of first-time buyers is that there are always more coming into the pipeline, maybe not in droves, but they are still there.

Let's look at Year-to-Date
In the under $100,000 price range, we are down 1% compared to 2009; in the $100,000-$140,000 price range, we are down 18% from 2009; in the $140,000-$180,000 price range, we are down 3% from 2009; in the $180,000-$250,000 price range, we are down 6% from 2009.  Listings over $250,000 are up 25% (54 more sold) for the year.

What's Ahead?
Two weeks ago, the Fed announced they will be starting another round of quantitative easing (QE2), which essentially means they are buying more debt in an attempt to stimulate growth in the economy (think stock prices up, interest rates down). 

What this means for the real estate world is that interest rates are expected to stay low into the first half of 2011.  That is good news, if you missed out on the tax credit or if you didn't buy yet.  In the famous words of John Paulson on September 27th of this year... "If you don’t own a home, buy one, if you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

We are ready whenever you are!

Download October 10 Stats - broken down by area.

October 2010 (Residential Only) for the entire MLS
Current Active Listings: 1,615
Avg. List Price: $193,032
Avg. Days on the Market: 148

Total SOLD Listings: 164
Avg. List Price: $173,323
Avg. Sales Price: $170,132
List Price/Sold Price Ratio: 98%
Avg. Days on the Market: 101

Total Under Contract Listings (Pending): 186
Avg. List Price: $176,555
Avg. Day on the Market: 98

Absorption Rate: 7.42 months of inventory

SOURCE: Fargo Moorhead Area Association of Realtors

 

Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors