The federal government has a program called Home Affordable Modification Program where they encourage the large banks to offer loan modifications and sometimes wipe away the second mortgages on property. The Treasury department is offering another $4.7 billion to help with the program. According to this Housing Wire story, $27 billion has already been contributed from taxpayers to homeowners and bankers. Remember, this programs don’t just benefit homeowners…the bankers are benefiting financially as well.
Taxpayers Contribute Another $4.7 Billion to Help Banks and Homeowners – HAMP Program
August 15, 2011 By Leave a Comment
The Banks Are Killing the Housing Market with Short Sale Policies
August 11, 2011 By 2 Comments
The banks are killing the housing market with short sales. You think that’s hyperbole? Talk with an agent you know. Very few of these are getting done despite what you’re hearing from the banks. There is a massive backlog of short sales for sale and they take forever to get completed if you can get them done.
How are they killing the market? I was speaking with a fellow agent today at a training and I mentioned I don’t know why we don’t just “pend” short sale properties once we get a contract on them. He reminded me that the reason we don’t is so we can show the bank that we’ve listed it for sale and that it continues to be for sale and the offer that we’ve submitted is the best and only one. The truth of the matter is once it has a contract on it and is now “sold subject to bank approval or third party approval” very few people come in and show the property. Additionally, even if we miraculously got another contract, we couldn’t do anything with it anyway. The seller, by signing the first contract, has sold the house – just subject to bank approval on the short sale. It’s an absolute waste that that home continues to stay on the market. The Realtors and the MLSes are complicit in allowing this to happen in Minnesota.
So here’s what happens, it takes about 225 days on average to pend a short sale if you can get it done. It’s taking about 140 days to pend a traditional seller’s property. Those for sale signs on the short sales continue to hang around forever. There is also a false impression left in buyers minds about how many properties are for sale when they look are various web sites. I can tell you more often than not when I get a request from a potential buyer to see a property that looks like a great value, often times it’s already under contract. However, it’s showing up as active and adding days on market to the overall market stats hurting traditional home sellers.
Short sales are the poison pill for the housing market. It’s time for the banks, Realtors and MLSes to get their acts together and stop this ridiculous practice that is hurting many of the people across the county.
Here’s a link to the Twin Cities Foreclosure and Short Sales Report.
Brooklyn Park Point of Sale Inspection Program – MAAR Survey
August 9, 2011 By 1 Comment
The Minneapolis Area Association of Realtors has as survey asking its members to complete a survey on the City of Brooklyn Park, MN’s Point of Sale Inspection Program which is expected to sunset in 2012. This program was put in place at the beginning of the housing crash. Brooklyn Park has been particularly hard hit with foreclosures.
The biggest issue I have with it is the inspection costs $200 and when it comes to foreclosures, the buyers often have to open an escrow account with the city for $200 and then set aside 1.5x the estimated repairs for the hazardous items. It’s a waste in my opinion. Those investors are going to fix the home anyway. However, if Brooklyn Park sells perhaps 600 foreclosures this year, that generates $120,000 just to open all of those escrow accounts. That’s money from the buyers.
Other than that, I think the City of Brooklyn Park does a nice job with their Point of Sale Inspections. The inspectors are great and I have never had any problem with them.
BTW, here’s a link to the latest housing stats for Brooklyn Park, MN.
Minnesota Fannie Mae REO Homes for Sale – HomePath
June 19, 2011 By 7 Comments
Search for Fannie Mae homes in Minnesota. These are REOs (real estate owned) by Fannie Mae, the pseudo government bank that owns half the mortgages in the country.
Search by county, city, price etc. As of this entry, there are 1,677 homes for sale in Minnesota owned by Fannie Mae. They are the biggest seller in the state.
Fannie Mae’s main web site is called HomePath…I find it kind of ironic given all that has gone on…HomePath. Interesting. I wonder what the consultants got paid to come up with that name? My guess is plenty!
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- FHA 203k Loan or HomePath Loan? (azmortgageguru.com)
- Realtors – Fannie Mae offers $1,200 + offering buyers up to 3.5% in closing cost assistance through October 31, 2011. (embracehomeloans.wordpress.com)
Plymouth, Maple Grove and Medina, MN Short Sales and Foreclosures List of Homes
May 7, 2011 By Leave a Comment
There have been some very nice foreclosures and short sales that have been hitting the market in Plymouth as well as Maple Grove and Medina, MN. If you’d like the list, contact me. I can’t publish them here for your review sorry. It’s a Board of Realtors rule.
Is This Really a Buyer’s Market?
April 26, 2011 By 1 Comment
The news today is more of the same…Case-Shiller Index points toward double dip in housing. That might be so, I don’t know. Are prices soft. Yes. Is it difficult to sell a home today? It depends. Where is it located? What’s the price point? How updated is the home?
Here’s the challenge for the market concerning inventory particularly in some of the bigger, more populated western suburbs of Minneapolis:
- 5-10% are BANK OWNED and are THE HOTTEST properties on the market – BUYERS GO HERE FIRST
- 10-20% are SHORT SALES – generally these properties might be in some disrepair. There is lots of uncertainty as to what the bank might actually accept for the property. They stay on the market a long time and are a real drag on the overall market causing more pain for traditional sellers.
- 70-80% are TRADITIONAL SELLERS who can actually sell. The problem is at best one out of five are priced well and in excellent, updated condition. Buyers today aren’t looking for fixer uppers unless they are investors.
So, what happens when you’re out showing property? We look first at the BANK OWNED homes as they generally represent the best deals in the market. We then very selectively choose some of the TRADITIONAL SELLERS to go see IF the home is priced decently and IF it appears to be nicely updated. The others sit. SHORT SALES…for the right buyer with a certain pain threshold and tolerance, we’ll go take a look…if only to have some fun just to see what it looks like. We then have to factor in the difficulty and likelihood of getting a deal done.
So all of that is the precursor to the article I saw in The Wall Street Journal today entitled, “Buyer’s Market? Stressed Sellers Say Not So Fast?“ Everyone thinks it’s a buyers market until they try to put an offer in on a house. Often times those homes are ending up in multiple offer situations today.
Here’s a quote that readily articulates the biggest challenge in today’s market:
Many sellers may be unable or unwilling to lower their home prices – mostly because they may be underwater on their mortgage – so buyers are increasingly finding lower offers than list price denied. Buyers, on the other hand, may be reluctant to agree to a deal if they don’t feel like they are getting it at a deep discount, industry insiders say.
If you are a TRADITIONAL SELLER and you do have the equity and financial wherewithall to sell, please don’t fool around with your asking price by pricing it over the market. You will hurt yourself in the end with a lower sales price. Price it right immediately. If you and your agent get it wrong (and you’ll know almost immediately with the exception of luxury properties), then adjust your price quickly. Your home is worth the most those first few days on the market. As days on market increase your value drops accordingly. Best to err on the side of being overly aggressive on your price – i.e. at or just below market.
For more on pricing your home properly, please see my video (albeit not high production quality) on pricing your home properly in today’s market. You’ll at least get the point I’m making.
Related Articles
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Twin Cities Real Estate Market Activity Report – Week of April 25, 2011
April 25, 2011 By Leave a Comment
The Minneapolis Area Association of Realtors is out with the latest weekly report. We are continuing on the same trend that we’ve seen for several weeks now. Overall new listings are down about 20% compared to last year. Pending sales are also down about 20% compared to last year.
Last year that this time was when we saw the biggest ramp in new listings as well as pending sales as everyone was racing toward the finish line before the housing market was closed for the rest of the year. In case you’re reading this for the first time and haven’t seen some of my other posts, the housing market collapsed last year after the home buyer tax credit went away. We are only now starting to recover from that man made disaster.
Click here for the full report. Nice homes priced well are in very, very short supply. For most of the market it remains a buyers market because most of the inventory is considered junk, tired, old, out of date. A few existing homes are really nice and even fewer are really nice and priced right.
Twin Cities Real Estate Market Activity – Week of March 28, 2011
March 29, 2011 By 1 Comment
The Minneapolis Area Association of Realtors just published its weekly report for the week of March 28, 2011.
Key highlights of this week’s report:
- 16.6% decline in pending sales compared to the same week last year (week ending March 19th)
- 36.9% decline in new listings
- Active listings for sale – down 12% compared to the same week one year ago
- It’s taking 22 days longer to sell a home this year than last year (on average now it’s 157 days up from 135 days to get a contract)
- Percentage of list price received at sale 88.2% down from 93.2% last year
The Minneapolis Area Association of Realtors has a number of excellent reports available for agents as well as consumers.
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Plymouth, MN Bank Owned Housing Inventory Vanishing Quickly
March 28, 2011 By Leave a Comment
If you’re looking to buy a bank owned home in Plymouth, MN, good luck. As of today, there are 31 bank owned homes for sale in Plymouth. There are 17 properties currently pending. That means that there is less than a 2 month supply of bank owned homes. That’s fairly consistent across much of the Twin Cities metro.
The killer right now is short sales. There are 49 short sales for sale in Plymouth right now. A good portion of those do appear to have contracts on them but only 3 are actually pending meaning the listing agents expect them to close.
Traditional sellers have 361 properties for sale and 89 are currently pending. That leaves just a 4 months supply of housing available in Plymouth. Normally that would be almost considered a sellers market, but given the ongoing challenges with buyers’ credit and the lengthy sales process for short sales, traditional sellers will likely continue to suffer.
Short sales are really hurting the market because they hang around forever. The for sale sign stays up for 8 or 9 months before they even hope to hang a sold sign. Meanwhile the price continues to drop or the market time continues to accumulate which hurts traditional sellers who are in a position to actually sell their homes.
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