We have a few Real Estate highlights for the week…
Showings Are On The Move: Do you remember the sequence of events that leads to the sale of a home? It begins with web site views then to open house looks then to personal showings and finally to purchase agreements. Today we want to look at the increasing number of showings at Coldwell Banker Burnet homes. Last week we had 115 showings (potential buyers with their agent taking a serious look at a home the consumer may write a purchase agreement for). The 115 showings is 27 more personal showings than the prior week and 21 more than one year ago. Keep in mind, a year ago there were more homes on the market. Coldwell Banker Burnet had 15 homes go pending (accepted offers) last week. The average home received 1.1 showings last week.
Housing Affordability and Main Street: It is always good news when an average “Joe” or “Jane” driving down Main Street can afford to purchase, or at least secure a loan for, the average home on Main Street. Thinking back to the peak of the housing bubble puts this in perspective. At that time, (2005 or 2006 and probably a couple of years prior) the average consumer did not have the income to support the purchase of the average home. As our economy learned and hopefully the banks, this was not a good time to invest in a home. However, today is a completely different story. The housing market is currently setting a record for housing affordability. The housing affordability index will set an annual record for 2012 (as soon as the official numbers are crunched). All this is according to the National Association of Realtors (NAR) and their number geeks (economists). Affordability of homes is based on the relationship between median incomes, mortgage rates and median home prices. As this index climbs (income up, rates down, prices down) the average “Joe” or “Jane” is assigned a number or percentage. When the index is at par, (100%) the average consumer can afford the average home. NAR says 2012 will show the average family at 194% of the necessary income to purchase the average home. This is the highest year on record. If your home is on the market this means more buyers. If you are looking to buy a home, this means you will have competition getting in the door.
Grab Your Cycle: Just like riding a bicycle on your favorite trail, the real estate market meanders and the rider does not forget how to pedal. The real estate market is and always will be very local and cyclical. Over the past five years we experienced very low consumer confidence. But in November of 2012, consumer confidence climbed to a new high. Was it the election? Probably!?! Today’s interest rates are at an all time low for a thirty year mortgage. At the peak of the housing bubble we (Realtors) did not even imagine interest rates could go any lower. Well? Following five years of declining home prices, we are seeing double digit appreciation in many of the Minneapolis neighborhoods and suburbs. Nationally the median home price rose 11% from 2011 to 2012. In 2012 the national market had a run of eight consecutive years over year monthly increases in median home prices. Being both local and cyclical, just like riding your bike, the housing market will find hills for us to climb and valleys for us to coast down.
After just twenty days of January, The Tami and Steve Team is more than optimistic about the direction our 2013 Housing Market. In three words…”Enjoy the Ride!”