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Top Real Estate Trends In 2013 - Expecting More New Home Sales In The Twin Cities
Fannie Mae's housing specialists released their first economic forecast of 2013, introducing their "Transition to Normal" theme for 2013 that added to housing's sentiment as home sales trend higher and that 2013 stands a fair chance to be even stronger for the real estate industry.
Real Estate Housing Predictions According to HousingWire
Historically, economists and housing analysts have predicted a housing bottom; however the guesses were amiss starting out in 2012. Little did analysts grasp the strength - nationally - of the real estate housing recovery that the housing sector enjoyed last year. No one minds being wrong.
100 Housing Economist Predictions of Top Real Estate Trends for 2013: A Quick Summary
If one was to take a median forecast of more than 100 housing economists and analysts predicted in this past December’s survey that Minneapolis home prices will increase this year, it tallies to a 3% gain in 2013. The median forecast also calls for home prices to rise nationally by 23% through 2017. Even the most favorable respondent in last year's 2011 survey may have underestimated the final 2012 home price gain. A full report will be tabulated and released by Standard & Poor’s late February.
HousingWire Predictions For 2013
In an article titled"Few economists predicted housing market rebound in 2012" posted on January 22 by HousingWire and a Wall Street Journal article from the same day titled "The Year Everyone Was Wrong (Again) About Home Prices", 2012 is celebrated for the magnitude of the rebound that the housing sector enjoyed.
HousingWire offered their effort for a balanced predictions on trends homeowners can expect in 2013. In yesterday's HousingWire Webinar titled 2013 Top Trends in Real Estate they anticipate home sales will end up 6 - 8 % higher by the time housing experts summarize 2013.
A lot of homeowners will be coming up from underwater mortgages to overwater.
Home values will be up 3 - 6 % overall on a national average, really leaning on the high average of 4 - 5 %.
Distressed property sales will be up, with higher releases from the hedge funds.
2012 was the year of "Getting Compliant"; 2013 will be about "Staying Compliant".
More of home sales will be on a traditional side versus the number of foreclosed homes and short sales we have witnessed in 2012.
Local Real Estate Conditions Carry High Influence On What Homeowners Can Expect
Projected Percentage of Change In Home Prices in 2013 per each predictor below:
JP Morgan 9.7%
Capital Economics 5%
Freddie Mac 2-3 %
The average of over 100 predictions would average 3.1.
Bulls saying we will see a 33.6 % increase over the next 5 years.
The Bears are saying we will see a 11.3 % increase in the next 5 years.
Number Crunching Example of What A Buyer Will Save By Buying Today Vs At End Of Year
Monthly Savings of $262.09 on a $360,000 home purchased now
Today a home's $360,000 price at a 3.4 percent interest rate will have a P&I of $1,596.53. If you were to wait and buy the same home at the end of the year with projected price tag increase of $371,000 and at a projected interest rate increase to 4.4 percent, then the home buyer could expect to have a P&I of $1,858.62. That creates a notable Monthly Savings of $262.09, equaling 94,000 dollars the buyer could potentially save in the long term.
Move-Up Market Home Buyers
A "Move-Up Home Buyer" is someone selling their existing home to buy and move into one of larger size and/or better home features.
“We’re in the early stages of what we think is a long- term, multi-year recovery in housing. But we’re finally seeing evidence that housing has stopped being a drag and can actually start to become additive to GDP growth. Homeowners that have sat on the fence are ready to buy that bigger home since they can gain so much per dollar and let the home's value accrue.” said Philip Orlando, chief equity housing market strategist at Federated Investors Inc., offering his take on real estate trends for 2013. “You have a tremendous amount of catch-up that’s going to drive the next five or 10 years.” Homeowners that have sat on the fence are ready to buy that bigger home since they can gain so much per dollar and let the home's value accrue.
Additional Trends That Impact Move-Up Buyers
75.1 % of your local community have some form of a move-up buyer. This trend started in 2012 and is expected to be even higher in 2013. Therefore, home buyers can expect the competition to be stiff. Home Destination can help you prepare today and ready to make that offer when your opportune time comes.
After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association is predicting. Therefore, move-up home buyers would be better off in the long term by buying earlier in 2013 to start reaping the benefits of rising home values and miss interest rate hikes.
Google Reports the Trend To Search For Homes To Buy Is Up
The joint research by Google and NAR says real estate related searches on Google.com rose 253% over the last four years. Of Those searches 1/5 of them occurred on mobile devices (120% YOY increase). 9 out of 10 house hunter searched online during the home buying process.
Appraisals Trend In 2013
Appraisals are more prevalent than BPOs in an appreciating housing market
BPOs are much cheaper than an appraisal is
BPOs are more prevalent in an depreciating housing market
Projected Trends In 2013 Home Repairs
Blue Book Is One of The Oldest National Companies Recognized For Fair Cost of Repair Estimates
Talk to your Realtor about the possibly sharing a list of projected home repairs with the appraiser. A appraiser should work with same comparable that are to be used with the same upgrades. New hardwood floors, upgraded appliances, need likable costs; it is possible your appraiser will use global repair lists. RepairBase is owned by Blue Book, or use Marshall and Swift and it pulls information by zip code and will offer fair repair costs per specified real estate neighborhood.
If you are not buying a home to flip and sell, or for a short-term time, homeowners can bank on their Minneapolis home property values will increase. If you are waiting for a 3% return on a $350 house, you will benefit more by buying and getting into a home now. Consider the return on investment (ROI).
“The housing market turned the corner in 2012 and the small pull back in sales in December does not detract from that fact. We can expect a 7.2% gain for 2013 and a forecast that will see prices 39% above current levels by 2017.” ~ Joel Naroff, president of Naroff Economic Advisors
"When interest rates fall suddenly, it enables the 72% of buyers who get a mortgage to pay 15% more for the same house on flat income. So in a perfect world, prices should be up 10% just because of the rate benefit. We had a good year in 2012 and we’re going to have a worse year in 2013." said Mr. Hanson.
Bidding Wars Have The Potential To Kill A Home Sale
There is no need to worry when you are in the hands of Home Destination's care through a purchase agreement.
Bidding wars have the potential to kill it deal if done without a Realtor's wise and thoughtful care. Bidding wars can drive the asking price of a home above the home's value and force the seller to come down in their asking price. Bidding wars may be brought on by the lack of inventory, as there are fewer homes available for purchase by a smaller pool of home buyers.
Appraisers and banks cannot come in were a bidding war may take it. The new lending rules are great protection that homeowners were missing to this extent prior to the home price collapse. In fact, it was a contributing piece to the housing bubble. Appraisers are starting to lean more towards "Income to Value" methods vs. "Market Approach". Chief economist Joel Naroff commented on real estate trends saying, "With few houses to choose from, don’t be surprised if mini-bidding wars break out. That could get the fence sitters attention and trigger even more sales". Home Destination will helps guide real estate sellers through the process of accepting and countering bid offers.
Outside Investors Buy Up Twin Cities Properties
A jump in Twin Cities commercial real estate sales to foreign investors in 2012 signals that Minneapolis is not only a great place to live; it is a great place to work.
Some Minneapolis area residents may be surprised to learn the sums of investor sales in the Q2 of 2012: "The Twin Cities reeled in $384 million in cross-border commercial real estate investments. That amount put it in the top 10 of the nation's cities, No. 8 to be exact, sliding in ahead of Boston and Phoenix, both of which are larger," according to a 8.7.2012 MinnPost article titled Foreign investors are flocking to Minneapolis commercial properties.
Download the Clear Capital Housing Market and Minneapolis Housing Market Predictions Report
Download the Minneapolis Association of Area Realtors Monthly Indicators for Dec 2011
Download the Minneapolis Association of Area Realtors Monthly Indicators for December 2012
Home Destination, a Minneapolis Certified Distressed Property Expert and professional Realtor with RE/MAX Results, guides perspective home buyers and sellers in the Minneapolis housing market and St Paul area real estate decisions. We are passionate about helping Twin City homeowners from their dream home destination. Call 612-396-7832 and ask for Jenna Thuening.
Jenna Thuening, a Residential Realtor helps buyers know current real estate trends.
Eden Prairie MN 55334
Jenna's home page: homedestination.com
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