Potential home sellers trapped underwater in negative equity homes are finding hope in increased home values and household wealth that may free them to sell.
Some Minneapolis Homeowners Who Want To Sell Their Home Cannot - Until They Reach Out For Help
Stable home values and household balance sheets are improving, which should help potential home sellers trapped in underwater mortgage trying to refinance or sell. Fewer homes are listed as for sale across most of the U.S. as shown by Zillow's web site listings that are lower 16.6% year-over-year in February, according to the real estate marketer's website. Minneapolis is experiencing significant drops in available housing inventory based on shadow inventory being absorbed.
The Minneapolis housing market is seeing home values rise. One positive outcome is that it should fee some homeowners from negative home equity. Also called an "underwater mortgage", if a homeowner can upright their equity, they will find it easier to list their homes for sale should they wish to. This would contribute to an easing of the Minneapolis housing inventory crunch. Today's real estate buyers vying for what little inventory is available will benefit by a broader selection of homes to buy.
Fewer Foreclosed Home Filings Mean Fewer Homeowners Are Trapped Underwater
According to RealtyTrac's January reportings by state, in Minnesota 1 in every 1,244 housing units received a Minnesota foreclosure filing in January 2013. Hennepin County was the highest at 746, Dakota County fell mid-rage at 84 foreclosure filings and Carver the lowest with 29. In the last quarter, Minnesota had a total of 19,289 foreclosure homes with $175,921 for the average foreclosure sales price. Nationally, the average discount on homes sold in as a foreclosed home was 39% below conventional sale prices during the fourth quarter, while prices on homes sold in a short sale averaged 23% below market. "Former home owners tend to remain in the homes until the closing of the sale and therefore keep the homes in better condition. Short sales have also become a more popular alternative to foreclosure," said Daren Blomquist, vice president at RealtyTrac. Some cash home buyers are planning to spend just about as much to renovate a foreclosed house to bring it back owner-occupied.
Home Prices Are Improving Which Will Release Potential Home Sellers
At the same time, in all Twin Cities housing markets reported home prices are up, according to the latest Case-Schiller Index. For example, In Wayzata, MN, the average Wayzata home for sale is $539,161, up 24.58 % in the last quarter. Ely, Minnesota came in the highest home value increase with the average home price increasing 48.89 %. Cambridge, Minnesota came in second in state during the same last quarter of housing market reports with home prices increasing an average of 29.24 %. "Housing is clearly recovering," David M. Blitzer, chairman of the Case-Shiller index, who noted that prices are rising for both new and previously occupied homes.
Minneapolis Home Sales Report
Data provided by the Minneapolis Area Association of Realtors that shows the housing market is poised to be a positive contributor to the GDP. Annually home prices increased in 2012 over 2011 with the highest annual home price increase on record.
17 % more home sales activity in 2012 over 2011
10 consecutive months of home price increases
Buyers ended the year with 31.8 % fewer than last year, at only 11, 875 home available to choose from
Sellers had 31.8% less competition with 57% fewer homes for sale than in 2007
Median home sales price was up 16% for the month of Dec 2012 to $168.200
Median home sales price was up 11.9%,which is the annual price increase on record
Multiple offers are up in homes that are well prices and well presented
2.9 months supply of home for sale, a healthy norm is 4 months supply, down 42.2%
Home sellers gained 94% of their list price on average in 2012, up 3.7% from 2011 and is the highest seen since 2007
"Given that foreclosures accounted for 30% to 50% of sales in those markets, the drop in foreclosures for sale is having a significant impact on overall inventory." ~ Daren Blomquist.
Fed Says U.S. Household Wealth Is Up
Today’s report of the Flow of Funds Summary Statistics for the fourth quarter of 2012 shows that household net worth has increased an encouraging $1.1 trillion over the prior quarter to about $66.0 trillion at the end of the fourth quarter of 2012. The report showed that the value of real estate owned rose by $480 billion in the quarter. The real U.S. household net worth figures increased from $64.8981 trillion in the third quarter up to $66.0717 trillion in the fourth quarter. The rise in real estate values should transfer into helping potential home sellers get above water and be empowered to sell their homes as needed.
Yesterday's report showed household wealth in the U.S. climbed in the fourth quarter, gains in home prices are given the credit as the strongest contributor. Increasing home values are helping to repair family finances, freeing potential home sellers to an "above water" mortgage status. Net worth for households and nonprofit groups increased by $1.17 trillion from October through December, or 1.8 percent from the previous three months, to $66.1 trillion, the Federal Reserve said Thursday in its flow of funds report. For a bit of history, household net worth peaked at $67.4 trillion in the third quarter of 2007.
Twin Cities Is Tipping Toward A Home Sellers Market
While the Twin Cities is tipping toward a home sellers market, some potential home sellers are still feeling trapped underwater. The Minneapolis housing market is experiencing e a change in unlisted foreclosures, indicating there will likely be a rebound in available inventory in the coming months as those foreclosure properties are listed as short sales or bank-owned homes for sale. The Twin Cities real estate market has largely shifted from a Minneapolis buyer's market to a seller's. An increase in the buyer pool per house on the market creates a seller's market. The Twin Cites high affordability index coupled with low interest rates still favors a home buyer's market. Home Destination anticipated continued improvements to help home sellers feel confident and positioned well enough to put their homes up for sale. In Washington, we will need to see continued smart decisions made to protect homeownership, which will require tough compromising from vying party views on just how to get there.
A Year Over Year Look At Home Sellers
In 2012, the national housing market finally turned a corner. Minneapolis is now experienced 13 straight months of home value appreciation. Sales were up significantly over 2011 as buyers returned to the market, boosting demand and creating a strong home buyer's pool. Homeowners looking to sell their home in 2013 can be confident that they won’t be selling at the bottom of the housing market. They may well find themselves in a sellers’ market as things are tipping that direction. Potential buyers in 2013 are likely to be motivated to get a deal done while affordability is still extremely high and mortgage rates continue to be historically low. That said, the buyers are out in greater numbers in 2013, while housing inventory is remarkably low at 2.9 months stock of homes for sale.
CoreLogic®, a leading provider of real estate reports, released a residential home sales report on September 12th, 2012 showing that 10.8 million, or 22.3 percent, of all mortgages were in negative equity at the end of the second quarter of 2012. That represented a total of 1.3 million US households that have risen from negative home equity to positive home equity at mid point in the year, which is much improved on in Q1 of 2013.
Home Sellers Unique Potential To Sell Is Determined By Location
The housing market recovery hasn't shifted a bit from the old real estate axiom of "location, location, location." How the home sellers are faring today on the Twin Cites housing market is up overall, however, specific neighborhoods vary up or down. Potential home sellers wondering if it makes more sense to buy or rent, to sell now (provided they can) or to hold off – is largely determined by unique, local factors and housing statistics. Home Destination brings timely and comprehensive local market information and good advice any time. Have a Realtor as a guide may be even more important in 2013 as buyers continue to seek bargains and sellers look to maximize returns and housing investments.
Homeowners Trapped Underwater Are Expected To Surface Upright
As home values continue their upward march in 2013, more homeowners currently trapped underwater will begin to surface. This will be good for buyers frustrated by low inventory of homes for sale and intense competition in the Minneapolis real estate market, but it will also have the effect of cooling price increases. As a result, in 2013, we predict home value appreciation in many areas will look more like a series of steps, characterized by cycles of price spikes and plateaus. Price spikes will free some homeowners from negative equity, allowing them to sell their homes, thereby easing housing supply constraints.
Menendex Boxer Bill To Help Responsible Homeowners Refinance
Helping responsible families who need to sell their home and relocate yet cannot due to low home equity. Helping families who want to stay in their homes refinance at not cost to taxpayers.
Ensure that streamlined refinancing is available and consistent for all Fannie and Freddie borrowers, regardless of whether they are underwater or not
Reduce up-front fees on refinances. The bill prohibits GSEs from charging up-front fees to refinance any loan they already guarantee.
Eliminate appraisal costs for all borrowers. Currently home borrowers who happen to live in communities without a significant number of recent home sales often cannot use automated appraisal systems and are forced instead to pay hundreds of dollars for a manual appraisal for a HARP refinance.
Remove additional barriers to competition to help trapped homeowners
Extend HARP by one year, thereby allowing eligible borrowers the time needed to access the program.
Download the Federal Reserve Flow Of Funds Household Summary Statistics Feb 2013
Download Senator Menendex Boxer Bill To Help Responsible Homeowners Refinance Press Release
Home Destination, a Minneapolis residential Realtor with RE/MAX Results, helps families with plans for buying a home with better informed decisions and guides them thorough the process. Twin City homeowners who want to sell their homes but feel trapped underwater can reach Home Destination by calling 612-396-7832 and ask for a FREE one hour consultation.
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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