Spring Market

By
Real Estate Agent with Coldwell Banker Burnet

As the days get longer and the temperatures become milder, we are all looking forward to the spring home buying and selling season. This is the time of the year when more interested buyers are out looking and we're busier than ever. It is important to inform your customers of the benefits of entering the market now.

Buyer Benefits

Following are four compelling reasons why consumers should seriously consider buying a house this year:

The Economic Stimulus Plan Offers Great Incentives to Home Buyers

Under the American Recovery and Reinvestment Act of 2009, first-time home buyers can receive a tax credit for 10 percent of the value of a home, up to $8,000. This credit applies to consumers who purchase a home between Jan. 1 and Dec. 1 of this year, and they don't have to pay it back unless they sell their home within three years. The ink has barely dried on this new legislation, and we're already hearing from excited first-time buyers who want to take advantage of this opportunity.

There's also good news for prospective buyers who are interested in obtaining financing through FHA, Fannie Mae or Freddie Mac. The bill reinstates the higher loan limits that were introduced last year for FHA, Fannie Mae and Freddie Mac. This makes these loans even more affordable for consumers, even in high-cost areas of the country.

There's a Great Selection of Housing Options

There is still an excellent supply of homes for sale in all price ranges and styles. Buyers can choose from new construction, existing homes, starter homes, luxury properties, condominiums, co-ops, townhomes, and lofts.

Mortgage Rates Are At Historic Low

Our affordability is excellent because of the combination of moderating home prices and low mortgage interest rates. As of early March, the following rates were available: 30-year fixed-rate loans in the low 5 percent range and 15-year fixed-rate loans in the high 4 percent range. These rates are amazing, especially when you compare them to the 1970s when interest rates averaged 9 percent, and the 1980s when the average rate was 13 percent and went as high as 18 percent in 1984.

Affordability Is At a Record High

The Minneapolis Area Association of REALTORS® (MAAR) just reported that the Housing Affordability Index, which looks at home prices, interest rates and consumer income, increased significantly to 202-the best it's ever been since MAAR began tracking affordability in 1990. This means that the current median income in our area is 202 percent of what's necessary to qualify for the median-priced home. This affordability number is 35.4 percent higher than a year ago.

Seller Benefits

For homeowners who have been thinking about selling their home, now is a good time to put your house on the market.

Buyers are Motivated

The positive home buying environment is convincing more and more consumers to get off the sidelines and start seriously looking for a good home deal. In fact, buyers are more motivated than they've been for quite some time. In addition, the excellent affordability level and tax credit will allow many more first-time home buyers to enter the market, enjoy the benefits of home ownership, and stimulate the move-up market.

We're seeing strong evidence of this increased buyer interest at the local level. In the last three months in the Twin Cities metro area, pending sales increased more than 16 percent compared to the same three-month period of 2008, according to MAAR.

There's Less Seller Competition

Another good sign for prospective home sellers is the welcome moderation of the supply demand ratio, which means there's fewer homes on the market and less competition among sellers. As of early March, the supply demand ratio was 6.38, or 6.38 houses for sale for every buyer. This is 21.8 percent lower than the 8.16 supply demand ratio posted a year earlier.

Position Yourself Well on Your Next Home

Some homeowners may be concerned that they may have to sell for less than they would have received a year ago. However, sellers should be well aware that they'll have a beneficial outcome by purchasing in today's pricing environment.

Combine all of these benefits and it's clear that our housing market offers great opportunities for both buyers and sellers.

Thanks for all of your hard work on behalf of your clients. I wish you a productive spring buying and selling season.

 

Information provided by Robin Peterson

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