2011 March

Archive for March 2011

New Home Construction Down Across America

Thursday, March 31st, 2011

New home construction in America came close to a halt last month when it fell to its lowest level in nearly 50 years. At this rate Americans are on track to buy fewer new homes since the government began tracking this data over 50 years ago. According to a report recently released by the Department of Commerce it showed that nationwide home construction was down 22.6 percent from the month of January. The Midwest particularly took a hard hit with new home construction housing falling 48.6 percent. The decrease in the new home construction industry has driven the median price of a new home down to $202,000, which is the lowest price since 2003.

The Builders Association of the Twin Cities tracks the number of building permits that are pulled in each municipality and it appears there may be a slight increase in the demand for single-family homes. In February there were 178 permits approved in the Twin Cities and a majority of those were for single-family houses.

New home construction may be stagnant right now but home remodeling is picking up. According to a national index recently released it reported that remodeling rose 22 percent in January. This was the 15th month in a row that an increase was seen. This indicates that more Americans are choosing to remodel rather than move.

New home construction may be down but there are deals to be had in the existing housing market. If you are looking to buy or sell a home contact me. Our group specializes in Eden Prairie Real Estate, Chanhassen Real Estate, Chaska Real Estate, Lake Minnetonka Real Estate, Edina Real Estate and West Bloomington Real Estate.

Brace Helgeson/ Coldwell Banker Burnet/ 952-974-3466

Tags: Brace Helgeson, Buying a Home, Homes for Sale, Homes for sale in Chanhassen, homes for sale in Chaska, Housing Market, New Home Construction In Minneapolis
Posted in Buy a House, Home Builders, Housing Market | No Comments »

Current Situation Of The Minneapolis Housing Market

Wednesday, March 23rd, 2011

The Twin Cities housing market did not fare so well during the month of February if comparing it to the same time last year, but on a month to month basis things do not look so bad. Home prices and home sales were down for the month. The median sale price of a home in the Twin Cities fell 10.4 percent for the month of February compared to the same time the year before according to data released by the Minneapolis Area Association Of Realtors.

The median home price in the Twin Cities is now $142,500 which is just slightly ahead of the median sale price of a home in January which was $140,000. When compared to this same time a year ago the median price of homes in the Twin Cities is decreased, but the median price did rise in the last month. Home sales during this time of the year in 2010 were more active due to the home buyers tax credit that was in place. The tax credit gave those buyers who were on the fence about buying a home the push they needed to pull the trigger and buy.

The number of closed home sales rose 3.9 percent in February compared to the previous month. If you look at the numbers for the same time last February the number of homes that closed would actually be 1.7 percent less.

While it is a buyers market there is some good news for sellers. There were 5,299 new listings last month, which is a 26 percent decrease from last year, which means less competition.

Feel free to contact me if you are in the market to buy or sell a home. Our group specializes in Eden Prairie Real Estate, Chanhassen Real Estate, Chaska Real Estate, Lake Minnetonka Real Estate, Edina Real Estate and West Bloomington Real Estate.

Brace Helgeson/ Coldwell Banker Burnet/ 952-974-3466

Tags: Brace Helgeson, Buy a home in Minneapolis, Eden Prairie Real Estate, Homes for Sale, Homes for sale in Chanhassen, homes for sale in Chaska, Housing Market, Minneapolis Housing Market, Sell a home in Minneapolis
Posted in Homes for Sale, Housing Market | No Comments »

Home Affordable Foreclosure Alternatives

Thursday, March 17th, 2011

In April 2010 the Obama administration launched the Home Affordable Foreclosure Alternatives, or HAFA program. AMS Servicing estimates that, as a result, short sales could increase 50% industrywide this year. They have also determined that approximately 91% of previously ineligible borrowers might now be eligible for the HAFA short sale program.

HAFA was designed for homeowners who fell out of the Treasury’s Home Affordable Modification Program, or HAMP. The HAFA program was launched as an incentive to servicers and investors to pursue short sales and deeds-in-lieu of foreclosures. It is to facilitate the recovery process for lenders and investors whose borrowers do not qualify for foreclosure mitigation programs.

As an alternative to foreclosure, a potentially prolonged process, Fannie Mae has considered incentives including few months in the residence at reduced or even no rent. Beverly Wilbourn, a vice president at Fannie Mae, says the objective is to engage the borrower earlier and avoid foreclosure. “Offer them a way to transition from a very difficult financial circumstane… [and] get to the homeowner and talk them through to life after this horrific situation.”

The ultimate object of the program is to cut in half the time it takes to complete a short sale, according to John Will, director of component servicing for Fannie Mae.

If the objectives are met, it will bring a substantial portion of the ‘shadow inventory’ of homes to the market earlier than would a full foreclosure process. It is estimated that a shorter and less costly transition of title back to the lender could generate faster short sales, resulting in a higher sales price and better recovery for the lender. To this degree a successful HAFA program could hasten the recovery of the housing market.*If you are in need of a free consultation regarding a short sale of your home, feel free to contact me anytime. I have CDPE certification (Certified Distressed Property Expert) and will be happy to discuss your options.

Brace Helgeson, Coldwell Banker Burnet

Licensed in MN #92065

Tags: foreclosure alternatives, Foreclosures in Minnesota, HAFA, selling a home, short sale approval
Posted in Short Sales | No Comments »

Future Of The Mortgage Finance System

Thursday, March 17th, 2011

Mark Zandi, chief economist for Moody’s Dismal Scientist has published his vision of mortgage finance reform. Here are excerpts from the report:

Nationalization vs. Privatization
“Maintaining the federal government’s current domination of the mortgage finance system is one approach. Fannie and Freddie could be put into receivership, and their activities subsumed into the federal government. Permanently nationalizing the system in this way would ensure that mortgage lending is not disrupted in bad times, but the cost to taxpayers could be enormous if the system is not well managed. There is also a reasonable concern that government would stifle innovation, preventing the development of mortgage products that could more efficiently meet borrowers’ needs.”

”At the other end of the spectrum is complete privatization of the mortgage finance system. The federal government would still regulate, but Fannie and Freddie would be downsized and their activities restricted. Some form of private-label securitization would have to be revived.”

Goodbye To The 30-Year Mortgage
“A private system would also likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages. Based on the experience overseas, the fixed-rate share in the U.S. would decline to an average of between 10% and 20% of the mortgage market compared with a historical average of closer to 75%.”

Create Catastrophic Insurance “Catastrophic insurance would be provided on mortgage securities only after major losses, much as the FDIC insures bank deposits. The FDIC ended runs by scared depositors on U.S. banks during the Great Depression. Catastrophic mortgage insurance would eliminate runs by scared investors on the global financial system such as those that sent the economy reeling in 2007 and 2008, precipitating the Great Recession.”

Mortgage rates would be higher
“In a hybrid system, mortgage rates would be higher than they were before the housing crisis, but only because the previous system was undercapitalized…mortgage rates would be approximately 30 basis points higher.”

Reform Is Imperative
“Given the fragile states of the U.S. housing market and economy, a transition from the current nationalized mortgage system to a hybrid system will take years and raise many issues, but these will be manageable. Given the expertise they have acquired over the past several decades, the downsized Fannie and Freddie could become federal catastrophic insurers. The transition would also involve establishing institutions and an infrastructure necessary to attract private capital.”

Tags: Buying a Home, financing a home, future of the mortgage finance system, mortgage process, mortgage rates
Posted in Mortgages | No Comments »

Existing Home Sales Rise In The Minneapolis Area While Home Prices Fall

Thursday, March 10th, 2011

For the third consecutive month home sales have continued to rise across the nation at a rate that is now above levels we seen a year ago according to the National Association of Realtors. Nationwide existing home sales were up 2.7 percent for the month of January, but at the same time the average price of homes fell to their lowest levels in almost nine years. The Twin Cities area was right in line with the data released by the National Association of Realtors. Pending home sales did rise in the Twin Cities area and a deep decline in home prices was seen. The state of Minnesota saw home sales increase 11.1 percent in January which was well above the national average.
The median existing home prices across the nation was $158,800 for the month of Janua
The National Association of Realtors considers an existing home sale to be a completed transaction that includes a single family home, townhomes, condominiums, and co-ops. The increase in existing home sale is up 5.3 percent from levels seen in January of 2010. Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence.” 29 percent of homes bought in January were from first time home buyers, 23 percent were from investors, and the remaining was from repeat buyers. ry, which was down 3.7 percent from the same time a year ago.

Tags: Brace Helgeson, Buying a Home, Chaska Real Estate, Homes for Sale, Homes for sale in Chanhassen, Housing Market, Minneapolis area home prices, West Bloomington Real Estate
Posted in Buy a House, Homes, Homes for Sale, Housing Market | No Comments »

Obama Administration Pushes For Mortgage Deal That Could Impact Minneapolis Home Owners

Thursday, March 3rd, 2011

The Obama administration currently is in the process of trying to push through a settlement that deals with the issue of mortgage-servicing breakdown that could potentially impact America’s largest banks. The settlement could force the banks to pay a reduction in loan principles which would be worth billions of dollars.

The settlement proposes that there be a commitment from mortgage services to reduce the loan balance of those home owners who are underwater on their loans. If the settlement is reached both the state attorneys general and federal agencies will be pushing for the banks to face a civil fine that could cost them anywhere in the ballpark of $20 million. However, reaching a comprehensive settlement may be difficult. The settlement deal would first have to win approval from the state attorneys general and federal regulators. It would also need approval from some of the country’s largest mortgage lenders such as giants like: Bank of America Corp., Wells Fargo & Co, and J.P. Morgan Chase & Co.

The approval of the settlement may provide clarity to the uncertainty that has caused the foreclosure process to stall since last fall. Many economists have spoken on the fact that they believe that the foreclosures need to proceed for the housing market to continue on its path to recovery. If the deal is reached on this settlement it is unclear at this time how many loan borrowers could be impacted by it.

The focus has been on loan modification which has a goal to shrink monthly payments for home owners by reducing interest rates and extending loan terms. Large banks have been hesitant to reduce principals due to fears that borrowers who are currently able to afford their loans may stop making payments in hopes that they may also receive a smaller loan. Bank executives also argue that reduction in principals do not always improve payment patterns. It would also be extremely difficult for banks to determine who would qualify for a principal reduction and who would not.

If you are underwater on your home and looking for more information on what you can do feel free to contact me. Also feel free to contact me if you are in the market to buy or sell a home.Our group specializes in Eden Prairie Real Estate, Chanhassen Real Estate, Chaska Real Estate, Lake Minnetonka Real Estate, Edina Real Estate and West Bloomington Real Estate.

Brace Helgeson/ Coldwell Banker Burnet/ 952-974-3466

Tags: Brace Helgeson, Buying a Home, Chanhassen MN, Chaska MN, Eden Prairie Homes, Eden Prairie Real Estate, Homes for Sale, Homes for sale in Chanhassen, homes for sale in Chaska, ome owners who are underwater
Posted in Homes for Sale, Housing Market | No Comments »

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Archive for March 2011

New Home Construction Down Across America

Current Situation Of The Minneapolis Housing Market

Home Affordable Foreclosure Alternatives

Future Of The Mortgage Finance System

Existing Home Sales Rise In The Minneapolis Area While Home Prices Fall

Obama Administration Pushes For Mortgage Deal That Could Impact Minneapolis Home Owners

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