Thinking of Buying A Home? What Are You Waiting For?

Thinking of Buying A Home? What Are You Waiting For?

With spring right around the corner, you may be wondering if you should wait to enter the housing market. Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.

The bottom in home prices has come and gone. Home values will continue to appreciate for years.  Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained below 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost three-quarters of a percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You Are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Bottom Line

If you are ready and willing to buy, contact Liz Sandwick, your Coldwell Banker Burnet Real Estate Professional, to analyze all of the options and opportunities available to you in today’s marketplace. 

Liz Sandwick, Coldwell Banker Burnet REALTOR® helping buyers & sellers in areas like: Apple Valley, Lakeville, Burnsville, Prior Lake, Savage, Farmington, Rosemount & more!

10 Interior Design Trends That Turn Off Home Buyers

10 Interior Design Trends That Turn Off Home Buyers

You want your home to look its best, and maybe you’ve been inspired by the interior design trends you’ve seen in magazines, on TV or on design websites.

But following some of the hottest home remodeling and interior design trends can backfire when it comes time to sell your home.  Buyers want to picture themselves in a home, and highly individualistic touches can get in the way of that.

When you’re ready to sell your home, it’s best to put things in pristine, move-in condition and remove all of the individual touches that made your house a home.

After all, your goal is to get potential buyers to picture themselves in the home—and they won’t be able to do that if your decorating style still dominates.

Check out the caveats that go along with these home interior design trends.

1. Boldly Painted Walls

Decorators often tout black or another bold paint color as the perfect backdrop to metallic accessories or appliances in modern home design.  The reality is that people prefer the exterior and interior walls of a home to be neutral. Even though repainting is cheap and relatively easy to do, it’s still a pain and buyers might not want to bother.

When decorating, your best bet is to stick to an appeasing hue for the walls and use accessories to provide pops of color.

2. Wallpaper

Bold, graphic patterns increasingly are being incorporated into interior design, often in the form of wallpaper.  But wallpaper—even if it’s only on one wall—is an extremely personal choice and time-consuming to remove if it doesn’t appeal to the buyer.  Consider replacing wallpaper with a neutral paint for broader appeal.

3. Lavish Light Fixtures

While potential buyers want rooms that seem airy and bright, beware of installing a showpiece light fixture that is too modern or ornate.  Fixtures should enhance your home—not steal the spotlight.

4. Gleaming Gold

Designers may be mixing silver and gold to give homes star quality, but it might be wise to change out fixtures if they have the wrong metallic sheen.  Gold can give a home an outdated, ’80s feel. Switching out the faucet and door handles with a more appealing finish—such as brushed nickel—is relatively inexpensive and can help make your home appear sleek rather than out of style.

5. Converted Garages

People want a covered parking space so that they have a safe place for their car—especially in areas where street parking is at a premium. Additionally, people often use their garage as storage space.  If you convert your garage into a space tailored your specific needs, such as a music practice room, it may not suit your potential buyers.

6. Converted Bedrooms

Like with the garage, people want rooms built for their original purpose.  If you’ve converted an unused bedroom to an office, walk-in closet, or a game room, make sure you can easily convert it back to a bedroom when you’re ready to sell.

7. Carpets

While designers love to play with the texture of shag carpeting as it feels soft underfoot, the majority of home buyers prefer hardwood floors.  People assume carpets trap dirt, germs and odors, and they don’t want to go through the hassle of steam cleaning their home before they can move in. Potential buyers also don’t want to spend time removing carpet to expose hardwood floors.  If someone really loves carpet, it’s much easier for them to add it themselves—after the purchase.

8. Too-Lush Landscaping

The “outdoor living room” is all the rage, and you may be tempted to build out your backyard into a lavish wilderness of flowers.  But potential buyers may be hesitant to buy a home with an overly landscaped property requiring a lot of maintenance.  Focus on creating or maintaining a nice and neat outdoor space that people can enjoy without too much fuss.

9. Pools and Hot Tubs

A pool may seem like a luxurious feature, but it can be a big turnoff for buyers.  Pools are perceived to be expensive to maintain and potential safety hazards, especially for families with children. Above-ground pools are eyesores and can leave a dead spot in the backyard.

These sentiments extend to hot tubs, too. Many people see hot tubs as breeding grounds for bacteria, and they are not a feature easily removed from the deck or back yard.

10. Fancy (or Not) Pet Products

Sales of pet products are expected to increase nearly $3 billion from last year, and there’s an increasing market for luxury pet items.  But even animal lovers don’t want to see another family’s pet paraphernalia in a potential home. Even if your home is immaculate, the presence of pet-related items will give the impression that it’s dirty. 

Be sure to remove all traces of your pet—including toys, food dishes and photos—before listing your home for sale.

Thinking of Selling? Why Now May Be the Time

Thinking of Selling? Why Now May Be The Time

It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their home on the market until then. The question is whether or not that will be a good strategy this year.

The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed which months most people listed their home in for 2015.

Here is a graphic showing the results:

The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,860,000.

That number spiked to 2,280,000 by May!

What does this mean to you?

With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring. They are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.

Bottom Line

It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.

Contact Liz Sandwick your Coldwell Banker Burnet Real Estate Professional to analyze all of the options and opportunities available to you in today’s marketplace. 

Tax Season Savings for Homeowners

Tax Season Savings for Homeowners

Well, it is getting close to that time of year…April 15^th Tax Day.  Since likely none of us are tax experts, we should be prepared with questions for the tax professional to make sure we’re getting our optimal deductions (and probably to annoy the poor tax preparer.)

Here are some deductions you may be able to use:

Mortgage interest. You will receive a form 1098 from your lender with the amount of interest paid in 2015. For many who itemize this is the biggest deduction. And for first time homebuyers, you can deduct any prepaid interest you pay at closing.

Points on mortgage or refinancing. You may have paid points to your lender. According to TurboTax, “If the loan is secured by your home and the amount of points you pay is typical for your area, the points are deductible as interest as long as the cash you paid at closing via your down payment equals the points.”

Loan origination fees. Many mortgages have loan origination fees and some of these fees can be deducted.  See which loans qualify for this deduction. Make sure your loan meets the qualifications for this deduction.

Property taxes. A major deduction is your property taxes. For many, this is a large chunk of your monthly mortgage payment.  If you purchased your home in 2014, you can deduct the prorated property taxes you paid to reimburse the seller for property taxes they made during the time you owned the home. That number can be found on your settlement sheet.

Home equity loan interest. If you took out home equity or improvement loan, then you may be able to deduct the interest.

Mortgage insurance. If you pay private mortgage insurance, or PMI, don’t forget to take that deduction, too.

Home office. Do you use a portion of your home for business only? Then this deduction may be for you.

Selling your home. There are several tax breaks for those who sold their home in 2014 and generally are used to reduce a capital gain. Some of these deductions can include: title insurance, real estate brokerage fees, escrow fees, inspection fees, legal fees and/or advertising. And if you moved because of a new job more than 50 miles away, then you may be able to deduct moving expenses.

P.S. Please consult your tax professional or consult www.irs.gov to see which deductions you may qualify for. 

Rents Still Skyrocketing

Rents Still Skyrocketing

Zillow recently revealed that the 43 million renter households in the US spent $535 billion on rent in 2015. Aggregate numbers like these often make it difficult to truly assess a situation. For more clarity, we want to share some points that were made in a Wall Street Journal article earlier this month.

The article made two important points:

1. Rents are increasing faster than the last several years:

 “Apartment rents increased faster last year than at any time since 2007.”

2. Rent increases are accelerating

“Another report from Axiometrics Inc., a Dallas-based apartment research company, showed that rents increased 4.7% in the fourth quarter compared with the same quarter a year earlier, the strongest year-end performance since 2005”.

Here is a graph to illustrate the rate of increase over the last several years:

Last year, the Twin Cities housing market had the most closed sales since 2005.

REALTOR Associations said sales were up 13.7 percent from 2014 to 2015, and the median home sales price also increased 7 percent to $220,000.  The report says the average home in the Twin Cities metro only spent 76 days on the market, which is a 10-year low.  Single-family homes and townhouse-condo segments sold at 96.6 percent of the original listing, and new construction topped out at 99.6 percent of the original listing. The numbers mean that sellers are accepting near-full price offers on their listings. 

As for 2016, realtors say low interest rates, rising rents, wage increases and the low unemployment rate will continue to be positive factors for the Twin Cities market.

A bit more local commentary…

A pattern is emerging that shows a fresh willingness by sellers to put homes on the market and buyers to enter the market. New listings are on the rise, if not in year over-year comparison, then certainly in week-over-week views, as we bounce well past the new year. Inventory is seemingly unfazed by the new 2016 calendar on the wall, as the trend line has remained roughly the same for the first weeks in January as the last weeks in December. If sales activity builds on what's happening now and reaches a slow boil, it would be surprising if more inventory mix wasn't added to the water soon.

In the Twin Cities region, for the week ending January 16:

* New Listings decreased 8.8% to 978
* Pending Sales increased 3.5% to 672
* Inventory decreased 20.3% to 10,392

Thinking of Buying? Selling? Five Reasons You Need To Hire A Professional

Thinking of Buying? Selling? Five Reasons You Need To Hire A Professional

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the National Association of REALTORS®, there are literally hundreds of actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream.

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $210,000 compared to $245,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring Liz Sandwick as your Coldwell Banker Burnet Real Estate Professional  with her finger on the pulse of the market will make your buying and/or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring Liz Sandwick your Coldwell Banker Burnet Real Estate Professional?

6 Important Things You Need to Know About the Housing Market in 2016

6 Important Things You Need to Know About the Housing Market in 2016

Buying a home is still part of the American dream.

According to a survey from Trulia, 75% of Americans dream of owning a home, up 1% from 2015. This dream is even more pressing among Millennials because 80% of those surveyed would like to buy a home — and 31% would like to do so by 2018.

Whether you're looking to buy a home this year or already own one, there are important factors that will affect your investment. Here are the six important things you need to know about the housing market in 2016.

1. Mortgage Rates Are Staying Low (For Now!)

The Fed's December 2015 interest rate hike had many consumers worried that rock-bottom mortgage rates would finally come to an end. However, the economic events of the first two weeks of 2016 show that low mortgage rates will stick around for a bit longer.

Given the lackluster performance of the stock market, many investors are buying bonds and driving down the yields of these investment vehicles. This is great news for those looking for a home loan, because the interest rates on 30-year mortgage loans are highly correlated with the yield of the U.S. Treasury 10-year bond. According to data from the Federal Reserve Bank of St. Louis, the average 30-year fixed rate mortgage average in the U.S. was 3.97% on January 7, 2016, down from 4.1% in December 31, 2015.

2. HARP Refinance Deadline Receives Extension

Many experts expect mortgage interest rates to increase further down the road. Those mortgage holders that haven't been able to refinance to a lower rate yet should think about doing so this year — especially homeowners that are underwater on their mortgages.

As of January 2015, about 700,000 borrowers who owed more than their homes were worth were still eligible to refinance their loans through the HARP program from the Federal Housing Finance Agency (FHFA). HARP was originally set to expire at the end of 2015, but it was extended for an additional year, until the end of 2016.

Nearly 3.3 million Americans have benefited from a HARP refinance to lower their monthly payments on their mortgages. The five basic requirements to qualify for a HARP refinance are:

• Loan was originated on or before May 31, 2009.
• Property is a primary residence, one-unit second home, or one- to four-unit investment property.
• Loan is owned by Freddie Mac or Fannie Mae.
• Current loan-to-value ratio must be greater than 80%.
• Borrower is current on the mortgage, with no over-30-day late payments in the last six months and no more than one in the past 12 months.

There are still close to 430,000 HARP-eligible loans out there and you can check the eligibility of loans by zip code.

3. Home Prices Are Rising Less Than in Previous Years

One of the necessities that will be cheaper in 2016 is the single-family home. In 2016, the national average price for a single-family home is expected to be 3% higher than last year, a much slower rate of growth than 2015's 5% increase.

4. Rent Prices Are Increasing Faster

On the other hand, rent prices are expected to increase sharply. In the third quarter of 2015, U.S. home buyers were spending 15% of their monthly income on the mortgage payment of a typical home, while U.S. renters were spending 30% of their monthly income on the rent payment of a median-valued property.

Higher rent prices will continue to be norm in 2016. According to a survey of more than 500 large U.S. property managers, rental inventory is at the lowest level in over 20 years.

A smaller inventory of available units for rent enables landlords to demand higher prices from renters. Of the surveyed property managers, 55% reported to be "less likely to offer concessions or lower rents to fill vacancies" and 68% of them expected to continue raising their rental rates in 2016 by an average of 8%.

5. New FHA Loan Limits Take Effect

On December 9, 2015, the Federal Housing Administration (FHA) announced its new schedule of loan limits for 2016. FHA home loans allow homebuyers to access financing with a minimum 3.5% down payment of the market value of the property, among other requirements.

Given the changes to median house prices in certain metropolitan areas, in 2016 the maximum FHA loan limit is higher in 188 counties. However, the maximum nationwide FHA loan limit remains at $625,500 (here is a list of areas that are at the ceiling or that are considered "high cost.") On the other hand, in 2016 the minimum FHA loan limit doesn't decrease for any areas in the country.

6. Fannie Mae Loosens Some Requirements

The Federal National Mortgage Association (FNMA), better known as Fannie Mae, is giving Americans a break in 2016. Through its new Home Ready mortgage program, Fannie Mae aims to broaden access to home financing to credit-worthy low-to-moderate income borrowers.

Contact Liz Sandwick your Coldwell Banker Burnet Real Estate Professional to analyze all of the options and opportunities available to you in today’s marketplace. Call or Text: 612-548-4549 or Email: LizSandwick@gmail.com