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Potential Twin Cities Home Sellers Are Finding They Have Sufficient Home Equity To Sell: opening up the chance to sell and become a move-up buyer. In yet another positive sign for national home values, CoreLogic's Spring Market Pulse says that homeowner's increasing equity is reviving trade-up home buyer demand.
Twin Cities real estate sellers are finding they have more home equity than they thought when offering their home for sale, making room for them to become move-up sellers and gain their next desired home. While selling adds supply to the tight Minneapolis housing inventory, when becoming a turn-a-round buyer, they also increase springs demand for more Minneapolis listing of homes for sale. Our Minneapolis real estate news welcomes spring with lots of reason to smile.
Home Seller Becoming Home Buyer
CoreLogic reports that new construction starts are up an annualized rate of 1 million, a strong 47 percent over the same month in 2012, which is the best improvement in new home starts in over 20 years. As Spring promises to follow Winter, real estate sellers are reeving up to meet buyer demand and their new found equity is putting them in a stronger position when selling. The report notes that "the seller-turned-buyer must still clear the credit qualification hurdle in order to purchase another home". When a move-up buyer can meet today's higher credit scores needed for home loan originations, they can take advantage of moving their home equity to a home that better meets their current family needs
"At the same time homeowners' newfound equity opens market opportunity, a second key market constituent, the investor, is expected to continue driving demand in 2013." ~ CoreLogic Spring Market Pulse Report
Twin Cities Home Sellers With Sufficient Equity Strategies
Whether selling a home to become a move-up buyer or to downsize requires solid financial planning. Trade-up home buyer demand is up.
Keep A Balanced Approach When Budgeting For A Home -
Use Home Destination's mortgage worksheet to help determine a realistic budget for owning a home. Homeowners seeking to determining out how much home they can afford to buy should avoid putting the monthly home payment first on the list. It may be wise to plan on saving 10% of all earnings for retirement, emergency funds, or college savings. Homeowners need adequate insurance such as disability or long-term care, as well as home insurance. Usual expenses such as food, car and clothing. After these essentials are met, homeowners will find it easier to determine what they can spend on their home mortgage. By putting a home first on the budget list, one may push retirement goals aside and later regret it.
Move-Up Buyers Need A Quality Home Loan -
Move-up buyers seeking to buy a home with a quality home loan may be attracted to paying off a home in 15 years. However, it is important to take into account the extra money it will take to pay it off in 15 years versus 20 or 30. It is a great decision - if the money needed for other goals, such as retirement, are also met. Waiting to save toward retirement until after the mortgage is paid off, means loosing 15 to 20 years in the process and any interest income. Time is key for retirement planning. Talk to a financial expert about debt and what smart strategies can use for a long-tern advantage.
Have A Long-Term Exit Plan -
Whether purchasing a new home with plans to live in it for your or with the intent to rent it or invest and flip it, taking a view of eventually selling it will safeguard the homeowner, eliminating potential hang-ups that may inhibit the ability to resell the home later on. Be watchful if the neighborhood is changing in a negative way. Is a new highway project proposed nearby in the foreseeable future? A rezoning for low-income rental units nearby? No one wants to loose their home's resale value, so enter a home purchase agreement with an exit strategy in mind.
Home Sellers Advantage With A Professional Team -
Twin Cities home sellers are finding that having a team of professionals such as a mortgage broker, real estate agent, and financial planner together add to making better informed home buying decisions. When choosing the professional team, inquire if they are willing to work as a team to ensure you are making the best decisions about your next home. Professionals generally see the value of coordinating together to help their client. Jenna Thuening, owners of Home Destination has strong relationships with many local professionals and values team building to better client home selling and buying experiences.
Home Sellers Are Sharper Than Ever
"Twin Cities homeowners with sufficient home equity find it is a perfect time buy a home. Today's home buyers seem to have sharpened their skills by following the housing recovery and know how to use a mortgage worksheet, get a home buyer's quote, and pre-qualify before attempting to buy a home. You have to come to the bidding table ready to have a good chance to gain the home you are bidding on. We are seeing higher numbers of multiple bid offers," says Thuening.
Minnesota Stats in CoreLogic's Report Are:
Total Home Sales 12 Month Sum: $65, 406
Total Home Sales Year Over Year 12 Month Sum: -2.1%
Distressed Home Sales Share: 17.5% down from 22.2 a year ago
Home Price Index Percent Change From Peak: -23.2%
Negative Home Equity Share: 16.4%
Months Supply Of Distressed Homes: 5.5
CoreLogic Report Shows More Homeowners Have Increased Home Equity
Approximately 850,000 more residential homeowners gained a state of positive equity during the first quarter of 2013, according to the CoreLogic first quarter home equity report.
CoreLogic analysis on homeowner affordability shows that 9.7 million, or 19.8 percent of all residential properties with a mortgage, were still in negative equity at the end of the first quarter of 2013. This shows much improvement when compared to the 10.5 million, or 21.7 percent of all residential properties with a mortgage, at the end of 2012.
Residential Twin Cities Homeowners With Home Equity
CORELOGIC REPORTS 850,000 MORE RESIDENTIAL PROPERTIES RETURN TO POSITIVE EQUITY IN FIRST QUARTER OF 2013
According to the report, the national aggregate value of
negative home equity improved by dropping more than $50 billion to $580 billion at the end of the first quarter of 2013. That is 51 billion less than the $631 billion reported at the end of the fourth quarter of 2012. This decrease is credited in large by housing analysts to the significant improvement in home prices. Of the 39 million residential properties with positive equity, 11.2 million have less than 20 percent equity. Borrowers with less than 20 percent equity, referred to as "under-equitied" may anticipate more challenges and a difficult time obtaining new financing for their homes due to underwriting constraints. At the end of the first quarter of 2013, 2.1 million residential properties had less than 5 percent equity, referred to as near-negative equity.
So far in 2013, Residential Finance has seen a solid increase in loan applications for FHA 203(k) financing. Many home sellers with sufficient equity can sell and gain the needed loan to buy another home.
How Minnesota Stacks Up In Home Equity:
* Minnesota has an average 69.1 percent loan to value ratio.
* Positive equity share - 82.5 percent
* Negative equity share (95 - 100%) - 17.5 percent
* Near negative equity share - 5.2 percent
* Negative equity share (95 - 100%) - 17.5 percent
* Near negative equity share (100 - 105%) - 3.9 percent
* Total mortgage property count - 642
First and Second Liens of Homeowners Lacking Home Equity
Of the total $580 billion homeowners in negative equity, first liens without home equity loans accounted for one-half, or $290 billion aggregate negative equity, while first liens with home equity loans accounted for the remaining half at $290 billion.
6.0 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $211,000. The average homeowner is underwater $48,000.
3.7 million upside-down borrowers hold both first and second home liens. The average mortgage balance for this group of borrowers is $294,000. The average underwater amount they are facing is $79,000.
High-Ended Homeowners Have The Lions Share of Home Equity:
Most of the home equity held for mortgaged properties is concentrated at the high end of the housing market. For example, 88 percent of homes valued at greater than $200,000 have equity compared with 73 percent of homes valued at less than $200,000.
Twin Cities Home Sellers Are Competing With Fewer Foreclosures:
National levels of foreclosed home inventory is dropping, showing a sustained housing recovery. There were 1.2 million homes in the foreclosure process timeline during February 2013, which a 21 percent lower than February 2012. Nationally, completed foreclosure totals were at there lowest point since September 2007. Twin Cities foreclosures are down as well. Lender owned completed foreclosure sales are down 22.9 percent, while Twin Cities home sellers are benefiting from a higher market demand for traditional home sales.
Additional Finding In CoreLogic's Report:
Real estate investors will continue to drive up demand for home sellers to list new homes in 2013.
Sellers gaining higher home prices in the purchase market have led to increased rental home prices.
Tight housing inventory in the single-family rental market is causing rental prices to rise.
New household formation and homeowners who experienced foreclosure in 2012 will ensure strong rental demand in 2013.
Download CoreLogic's June 12, 2013 Report on Homeowners Negative Equity Down in Quarter 2 of 2013
Home Destination, a Minneapolis Certified Distressed Property Expert and professional Realtor with RE/MAX Results, helps homeowners determine when it makes sense to sell their home now by determining if they have sufficient home equity. If you are ready to buy a home in the Minneapolis area, or are preparing to buy a home in the next six months, call Jenna Thuening, owner of Home Destination at 612-396-7832. It is a perfect time to use our mortgage worksheets, get a home buyer's quote, and take time to pre-qualify before you buy.
Jenna Thuening, a CDPE can help you determine your best opportunities to refinance your home.
Eden Prairie MN 55334
Jenna's home page: homedestination.com
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