The Twin Cities housing market continues to roar ahead as today the Minneapolis Area Association of REALTORS released April’s home sales activity. While the report is full of good news, the best data point is the Pending Sales:

April 2015 saw the most homes go under contract in the Twin Cities in 10 year – a stunning 26% jump from a year ago and a phenomenal sign of the housing market’s renewed strength.

Closed sales also did great last month, up 20% from a year prior:

Median Sales Price was also up a healthy 10% versus a year ago:

The number of months of supply of homes for sale continues hover near 10 year lows, which will continue to frustrate buyers and drive further price appreciation this year. As prices continue to rise, many experts predict more homeowners to list their home for sale, however with so much buyer demand it is going to take some record new listing activity to really more the inventory peg much:

While there are several phone apps that can help you make a floor plan, this one seems to be the easiest yet:

RoomScan for iPhone is simple to use: just walk around the room and put the phone up to each wall. It then uses the motion sensors in the phone to calculate the floor plan. If you want to add doors, windows and room dimensions, a cheap upgrade gives you that capability.

RoomScan

via SlashGear

For home buyers that are looking to build a new home, one of the most common questions asked is “what will it look like?” While drawings and blueprints are helpful, it is still hard to get the feel for spaces and layouts.

The Plan Collection is now offering house plans that include the digital files needed to create a model of the home using MakerBot or other 3D printers.

For home buyers purchasing fully custom homes and for smaller builders that do not maintain model homes for each of their floor plans, 3D models are likely to become a valuable tool as the costs to make them quickly decline and consumers learn of this option.

I received the message below and thought I’d share it with my readers in case any of you have a property or know of someone who has a property that would be a good fit for this.

Hello Aaron

I have been a civil rights lawyer in Minneapolis for 23 years.  For decades, I have also worked to stop cruelty to animals.  Although I have supported/funded sanctuaries, rescues, and activism, I have learned that the best way to prevent cruelty (to animals and people) is education.

I am writing to you in search of a farm/acreage for a humane education center called Imagine Farm.  Imagine Farm is starting under the umbrella of Animal Sanctuary Foundation, a 501c3 nonprofit charity since @ 1997.[1]

Imagine Farm will utilize the basic concept of www.GentleBarn.org but also include a classroom experience using the award-winning curriculum of www.HumaneEducation.org.  It will be the first of its kind, and, hopefully, a model for other Imagine Farms throughout the country.

Imagine Farm will be a field trip destination, with a campus featuring an interactive classroom (utilizing humane ed curriculum), certified humane ed teachers, a humane, healthy-choice cafeteria, housing for on-site caretakers, staff, volunteers and overnight visitors, and barns to house animals on site (ranging from dogs and cats to pigs and horses).[2]

Imagine Farm’s purpose is not only to save animals, but also to imbue empathy into students:  for animals, the disabled, the elderly and others, via “imagining” themselves as the abused dog, the bullied child, or the lonely senior citizen.  After the students imagine how these individuals feel, we then provide practical ideas of how they might help alleviate the suffering (including activities like experiencing the difficulties of trying to navigate in a wheelchair or while wearing blinders, for example). Only through learning to empathize with others, and then taking even small steps to alleviate their suffering, can we decrease cruelty and violence.  And studies repeatedly show that those who commit violence against animals also commit violence against humans.

We are seeking a property owner who would consider donating farm/land for a legacy project like this.  As this is a nonprofit, the donation should be tax deductible, valuing the property at its “highest use.”[3]

Do you know of any owners of farmsteads, hobby farms, or land (with agriculture zoning) within about an hour of the Twin Cities[4] who might consider investing their property in this legacy?  Or developers who have been unable to successfully utilize their acreage?  If you have any suggestions as to how we might make the appropriate contact, or if you have a person in mind who might embrace this project, please contact me or share this information with him/her.

If you have any questions, please let me know.[5]  And if this project touches your heart, and you’d like to become involved (or if you know someone who has the desire and resources to push this project forward, I’d love to hear from you.

Thank you kindly for reading and considering this request.

Lori Peterson
LoriPeterson@LoriPetersonLawFirm.com
10 S. 5^th St., #700
Minneapolis, MN  55402
612.321.0606

[1] Animal Sanctuary Foundation already underwrites several sanctuary and rescue operations, and produced a humane education audio/visual truck as part of its mission.  More information available upon request.

Barb Jandric, president of Edina Realty, has made the following prognostications. I have added to these thoughts with my comments in blue where appropriate.

This past year has been an exciting year of steady recovery in the Twin Cities metro area. Rising prices meant more homeowners gained enough equity in their homes to make a move. Rates hit record lows, enticing buyers to make a move in a competitive market with a shortage of inventory. This was a significant trend this year, as was continued strong investor demand.

2014 will likely be similar, but a bit more moderate. The below trends are based on what I expect to see in the Minnesota and western Wisconsin real estate market, but many of them will be paralleled on a national level.

Buying trends

• We expect to see continued historically low mortgage rates, so affordability will remain excellent for buyers. Rates are far more likely to climb than fall in 2014 and could affect affordability if the economy finally starts taking off, though I’ve been saying that for several years now and it hasn’t happened (yet).
• Fewer investors will be in the market buying up inventory, which will make room for traditional buyers. As prices rise, profitability for investors will decline somewhat but expect them to still be quite active. Lots of Wall Street money being pumped into housing.
• Former homeowners who lost a home to foreclosure or sold a home short will begin to become eligible to buy again. We expect more of these “boomerang buyers” will begin to wade back into the market this year. Read about FHA Back to Work.
• Limited inventory will contribute to increased new construction, leading to more options for buyers. New construction continues to increase, creating new jobs and new home buying options – good news all around.

Selling trends

• Expect to see continued low inventory of existing homes for sale, especially in the spring. By midyear we will see inventory levels higher than they were at the same time in 2013 – the number of homes for sale is artificially low right now and will start working towards balance in 2014.
• Prices will continue to rise, but not as quickly as 2013; we expect to see appreciation around 4 to 7 percent. I’m betting that Median Sales Price will climb in the 6%-9% range but some areas and price points will be substantially higher or lower than that – the recovery is responding differently in different communities.

Trends in homeownership

• In the third quarter of 2013, 9.6 percent of mortgages remained “underwater,” meaning there is more owed on the mortgage than the property is worth, but that is down from 16.9 percent of mortgages in the third quarter of 2012, according to CoreLogic. We expect this trend to continue and for more homeowners to come above water and gain equity in their homes. This trend is a big part of the expected increase in homes for sale in 2014 and beyond – it also will help drive more consumer mobility, which is great for those seeking new job opportunities.

Our local economy

• Low unemployment is vital to a continued market recovery, and Minnesota’s unemployment rate is among the lowest in the country – a seasonally adjusted 4.6 percent, compared with 7 percent nationally in November, according to the Minnesota Department of Employment and Economic Development. While we have fewer unemployed, wage growth is still lacking and as rates and prices rise further, home affordability will again become an issue. Cheap housing is a temporary condition, and one we may not see again for decades.

Good news from the Minnesota Homeownership Center today:

Recently, the Federal Housing Administration relaxed its guidelines for borrowers who “experienced periods of financial difficulty due to extenuating circumstances”.  Basically, this is the Federal Housing Authorities ‘second chance’ mortgage program for potential buyers who experienced financial hardship (unemployment or severe reduction in income) during the recent recession.

Known as the “Back To Work – Extenuating Circumstances Program”, or simply the “FHA Back to Work Program,” borrowers with a recent history of bankruptcy (Ch.7 or Ch. 13), foreclosure, judgment, short sale, loan modification or Deed-in-Lieu of Foreclosure can apply for an FHA-insured mortgage and may be able to become a homeowner again much more quickly than ever before.

• Buyers no longer need to wait three years to apply for an FHA loan after experiencing a foreclosure, short sale or deed-in-lieu.

• In addition, they no longer need to wait two years to apply for an FHA loan after experiencing a Chapter 7 or Chapter 13 bankruptcy.

• Buyers must be able to demonstrate that they have completely recovered from the financial event and if they have, the wait time is reduced to just 12 months

Potential borrowers are required to meet with a HUD-Approved Housing Counselor at least 30 days prior to submitting the loan application.  The Minnesota Homeownership Center maintains an easy-to-use search engine that helps you/your clients find their closest counselor.

Visit http://www.hocmn.org/buyingahome/housing-counseling/ to search for a counselor.

For more information on the FHA Back to Work – Extenuating Circumstances program, see Mortgagee Letter 2013-26:

http://portal.hud.gov/hudportal/documents/huddoc?id=13-26ml.pdf 

HousingLink has just released their latest foreclosure report showing that Minnesota’s foreclosure activity continues to decline and in the 3rd quarter of this year was the lowest it had been since 2006! While still at double the rate prior to the crisis, foreclosure activity continues to wane and that is great news for homeowners, neighborhoods, and cities everywhere.

Image from HousingLink

What’s going on in the Twin Cities housing market? Take a peek below! If you are thinking about selling your home this winter or next spring, now is the time to get a free home market value analysis!

With the housing market continuing to strengthen with rising prices and unit sales, the dollar volume of those closed sales in the last year has hit a 5.5 year high, nearly $12 billion. Each sale creates a flurry of economic activity – let’s look at just some of the areas that are often impacted:

• Real estate agents
• Title company employees
• Loan officers
• Home Inspectors
• Movers
• Home improvement stores
• Remodelers/contractors
• New construction

Just in real estate commissions alone, there’s probably $300-$400 million that lands in the hands of real estate agents in the Twin Cities, even after the broker has taken their split, and that number is up nearly 60% from its lows in 2011.  All told there’s probably more than $1B in revenue earned by people involved along the way. Those people in turn are spending that money on everything the rest of Minnesotans do: food, clothing, housing, etc.  So as the housing market has continued to recover, there is real impact to the local economy and of course direct impact to the people involved and their families.

I am not an economist and I made estimates in my numbers above based upon my experiences and judgment. They are estimates only.

This seems like an obvious play – after many years of operating a joint venture with Wells Fargo, HomeServices of America is making HomeServices Lending a wholly-owned subsidiary.  HomeServices Lending operates in over a dozen states and as Edina Realty Mortgage in Minnesota and Wisconsin.

I think this is a great move by a company that’s been on an aggressive growth strategy recently. Kudos for taking the next step!

FOR IMMEDIATE RELEASE

Israel Kreps
Kreps DeMaria PR (for HomeServices of America)
(305) 663-3543
ikreps@krepspr.com
HomeServices Lending Announces Plans to Become Wholly-Owned Subsidiary of HomeServices of America
MINNEAPOLIS, Minn. (July 25, 2013) – HomeServices Lending LLC, a joint venture with Wells Fargo, today announced plans to transition to become a wholly-owned subsidiary of HomeServices of America, a Berkshire Hathaway affiliate. The transition work has been underway for some time, and is expected to conclude in 2014.
“HomeServices is a world-class company with an expansive and aggressive growth strategy,” said Todd Johnson, president of HomeServices Lending. “Wells Fargo has been a great partner for many years, and we look forward to working together in the future, but we felt that a wholly-owned model better fits our long-term strategy.”
The change in ownership structure does not impact HomeServices Lending’s current operations or organization. HomeServices Lending home mortgage consultants, along with their extensive staff of processors, closers and underwriters will continue their long-standing mission of serving customers with mortgage financing as they do today. The decision to move to a wholly-owned subsidiary strategically aligns with HomeServices of America’s growth strategy, and supports its business model of providing buyers and sellers with fully integrated home ownership services.
“This represents an important event in the continued growth of HomeServices,” said Ron Peltier, chairman and CEO of HomeServices of America. “Our mission is to provide an exceptional customer experience throughout the home transaction process. Owning and operating the lending portion of our business provides us with tremendous flexibility as we continue to build HomeServices into a global organization.”
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Full press release here