Between now and New Year’s Eve, many Sellers pull their house off the market because they don’t want to be disturbed during holiday activities.  At the same time, Buyers tend to take a break from house hunting as well.  For those Buyers and Sellers who are really serious, the holidays are no excuse to put things on hold.  The Buyers still out shopping have great negotiating options due to the slowing demand.  For Sellers, having your home in showing condition is very important, as is keeping an open mind if a low offer is submitted.  I’ve heard from agents in my office that Sellers are walking away from offers that are within $2000 of their bottom line on a $300,000 to $400,000 house.  Sellers should keep in mind that an offer turned down now may be the last offer they see for two months or more; until the market moves more towards spring.

Interest rates have slipped to as low as 5 3/8% in the last month and are currently hovering around 5 1/2%.  The slowdown in sales we’ve seen the last month has continued to accelerate but sales are still strong for homes priced aggressively.  Sellers that are intent on selling their home yet this year should consider a price reduction now to bring in buyers while they are still out in some strength.  Once Thanksgiving passes, the market really tapers off.

As can be seen on my home page, if a buyer visits this site and purchases and closes on a house yet this year I will provide them with a FREE 1 year home warranty!  Couple that with the strength in buying power due to the low interest rates and time of year and buyers have the potential to save thousands of dollars versus waiting till the spring!

While interest rates have stayed very consistent around 5 5/8% the sales activity has dramatically slowed.  While sales have slowed, about 3,000 new listings come on the market each week, leading us to a total of over 35,000 listings currently active on the Regional MLS system.  Sellers have to be aware of increasing market times and the need to consider price reductions.  Buyers haven’t had this much inventory to consider in years!

Interest rates in August and early September continued to hover below 6%…. currently as low as 5 5/8 on a 30 year fixed mortgage.  This decline and the “back to school season” lead to a stronger August than July.  Housing inventory continues to climb and is quickly becoming a buyer’s market.  From now until February, home sales progressively slow before the seasonal “Spring Market” begins in March.

July saw a dramatic turn in the real estate market.  After June’s record sales numbers, July was much slower.  We won’t have statistics for the month for about a week but I believe that the number of houses that went Pending Sale in July will be down 10% or more from June.  Realtors, Loan Officers and Title Closers are all commenting that business is slowing down dramatically from its record pace of the last few months.

This slowdown was expected.  With the summer half over and interest rates slowly on the rise, Buyer demand is waning.  This is a traditional seasonal pattern that happens around this time every year but it seems to be shaking up Realtors more this year than last.  For Buyers that are still out looking, your options haven’t been this good in many years.  For Sellers, expect that your home will be on the market longer and at 30 on the market you should consider a price reduction.

June was another record-breaking month for home sales in the Minneapolis/St. Paul area.  Interest rates slid all the way back below 6% for a 30 year, fixed rate loan of $150,000 or more.  Even though the Fed raised interest rates this month, that rate is not directly tied to the mortgage market.  According to the Mortgage Bankers Association, by this time next year rates are projected to be at about 7.1%.  With the rates still so low, I expect that July and August will be fairly brisk with sales, though September and beyond promise a slowdown in activity due to seasonal trends.

Even as sales are at and near all-time highs, the number of homes for sale are also high.  There are currently more than 23,000 single family homes for sale on the MLS right now.  That’s more than double what it was five years ago and up double digits from last year as well.  This is a boon for buyers as it allows for more buying decisions.  Sellers are having to realize that most homes no longer sell in the first week on the market.  In fact, I’m seeing price reductions on many homes for sale more than 30 days.  This is not a sign of a “price bubble burst” but rather a very normal market.  Sellers that want top dollar will need to spend more time “staging” their home for sale so that it shows well against the increased competition.

June is National Homeownership Month. According to Minneapolis Area Association of REALTORS, Minnesota’s overall home ownership rate now stands at 77%. Unfortunately, the home ownership rate for minorities is still well below 50%. Each year more Minnesotans purchase their first home and REALTORS such as myself are glad that we are able to help them achieve their dreams. While low interest rates have helped the last few years, there are still many people renting homes that could be owning homes with the right assistance. We can all work harder to help those around us succeed if we just take a few moments to show them that we care.

If you read the latest statistics from the Minneapolis Area Association of REALTORS, you will see what appears to be the formation of a maximum in the New Listings and Pendings (offers accepted) data. In a typical year, new listings and offers both begin to slow down as the summer approaches. Last year, the entire summer stayed strong due to the low interest rates. It’s uncertain whether or not this will continue this year or if we will fall back into a more “normal” summer. Interest rates haven’t moved much since last month and the job market outlook is improving so all the signs point to a relatively strong summer season.

If you’ve been thinking about waiting until fall to find a home, consider this: if rates move from their current 6.25% up to 7% by fall, your monthly payment will go up by MORE THAN 10%.

April new listings and sales were again at record levels.  It was a busy month for myself and everyone in my office.  Even though sales were very strong, there’s still a great inventory of homes on the market.  Buyers seem to be increasingly looking for homes that are in “move-in condition.”  Sellers looking for a quick offer should take time to evaluate the layout of furniture or “flow” of each room and consider carefully whether replacing carpet, painting walls, updating lights and window treatments may provide a favorable return on investment at time of sale.

Interest rates have jumped since last month’s lows and are currently around 6.25%.  Most economists and loan officers feel that the lowest interest rates our behind us and that rates will continue to slowly climb throughout the rest of the year.  It still looks like a great year for both Buyers and Sellers!

The monthly employment numbers for March came out April 2 and immediately sent the bond market interest rates higher.  Just a few weeks ago rates were down to 5.25% but have now “bumped up” to 5.675%.  While that sounds bad, the rates went up because the economy and job market are looking stronger and stronger with each new report.  The employment report was well above expectations and therefore really shook up the market on Friday.  Housing is very strong right now!  Reports of houses being sold in multiple offers are increasing and traffic at Open Houses is getting strong.  The one thing I’ve noticed recently is that there are many buyers writing offers that are unprepared to do so.  Some buyers have shaky financing, others just are not ready to purchase or don’t understand that existing homes will have items that need repair when an inspection is performed.  Some agents and loan officers are so busy or distracted that client education seems to be going by the wayside.

When buying a home, it is VITAL that you understand the entire process up to and including closing before you even write the offer.  Likewise as a Seller, you not only need to understand what is involved in selling your home, but also have an agent who will do their homework on the buyers who do write an offer on your home so that you know they are prepared as well.

March started off very busy and so I’m a little slow in posting an update here.  At the start of February, interest rates had jumped back up to 6%.  Since then, the rates have slid all the way down to 5.25%!  The economic forecast by economists came in lower than expected which has caused interest rates and the stock market to fall much of February and the first part of March.  As the weather has warmed up, the buyers have come more and more into the market.

As is typical in a good market, the best homes for sale at the best prices are still being swept up in a matter of days.  I was very pleased to have a home in Crystal sell in 5 days with multiple offers and a townhome in New Hope sell in two weeks with multiple offers.  The sales for the first two months of this year is lagging slightly behind last year’s record pace but are still well above the 5 year average.

The rest of March looks great for both buyers and sellers since we have such a great balance of the two right now.  If the interest rates continue to stay this low, you may see more hurried purchasing in the months to come.