2016 Starts with an Inventory Decline

New homes on the market in January were down 7.7% over 2015. This is about 500 fewer homes available to potential homebuyers. With the lower number of listings, we could see a slowdown in sales as we move through the remaining winter months which are typically a quieter time for our real estate market.

The pending sales were only up 1.6% to 4,284 units over last year. However, closed sales were up 16.5% over January 2015. This is reflective of all of the positive activity we saw in November and December. That number may slow down since the pending sales are running a little softer in January.

The median sales price jumped 8.2% to $188,00, while the average sales price rose 6% to $228,585. The median sales price is the midpoint, indicating as many transactions above as below the stated price.

Even in the traditionally cold, slow real estate month after the holidays, sellers were able to put a sold sign in their yard in 79 days. This is a 12.2% decrease, down from 90 days last year.

Minnesota REALTORS® are reporting strong market activity,” said Chris Galler, CEO of the Minnesota REALTORS®. “There are still buyers out there looking inventory as we state the new year.

Download the January 2016 Minnesota Housing Report HERE

Pending Sales

Closed Sales

Median Sales

Find more information on the real estate industry in the

MN REALTORS® March REsource Magazine.

Carrie
Carrie Andersen

Vice President, Member Services

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

LEAD GENERATION WEBSITES COULD LEAD REALTORS® TO RUN AFOUL OF THE CODE OF ETHICS, MINNESOTA LAW

There are several popular websites for consumers starting their home search, and many of them also offer lead services for real estate agents. While these websites can be a tool used by both listing and buyer’s agents in gaining and serving customers and clients, they are often national websites that work both REALTORS® and non-member licensees. REALTORS® using these websites need to remember that they are bound by the National Association of REALTORS® Code of Ethics and by the state law in the state they are licensed in and practice.

It has come to the attention of Minnesota REALTORS® that one or more popular lead generation websites utilized by real estate agents sends emails to listing agents when a consumer has shown interest in the listing agent’s property. Those communications, at least in some instances, contain a link that would enable the listing agent to directly contact the interested buyer, even through that buyer may be represented already. The emails may state that a buyer’s agent paying for the lead generation services was given an inquiry on the listing agent’s listing, and that the buyer’s agent will follow up with the listing agent if that “client” would like to schedule a showing of the listing. The emails may go on to state that if the listing agent needs to contact that client of the buyer’s agent directly to assist with scheduling a showing appointment, or possibly for other reasons, the listing agent can click a link to use other contact information provided in the email to contact that client directly. The lead generation website may or may not then remind the listing agent to follow the rules of his or her brokerage, MLS, association rules and regulations, and laws.

The last sentence is important. REALTORS® need to remember that Article 16 of the Code of Ethics states that they “shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with their clients.” Article 16 specifically prohibits a REALTOR® from making direct contact with the client of another REALTOR®. Further, Minn. Stat & 82.81, subd. 9 specifically prohibits “negotiat[ing] the purchase, lease, or exchange of real property knowing that the buyer or lessee has executed a written contract granting exclusive representation or assistance for the same service of purchase, lease or exchange of the real property with another real estate broker. “If a lead generation website states that the inquiry is from a “client” of another agent, the listing agent should assume that there is a written representation agreement, and that client should not be contacted using the “click here” link or other contact information provided to the listing agent to gain direct access to the client. Thus, if Minnesota REALTORS® receive an email similar to that which is described above, they should not make contact with the client.

Anne Kealing
Anne V. Kealing, JD

Associate Legal Counsel

Find more real estate industry information in the

MN REALTORS® March REsource Magazine

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Tips for Moving Before Purchasing a House

How to move when you’re in between homes.

In an ideal selling/buying scenario, you’d be able to schedule your closings for both houses so that a move occurs with ease in terms of timing and with minimal upheaval. Many times, however, an owner finds themselves needing interim housing. Perhaps they just haven’t found a house yet to buy, but have to move out…or maybe they are building a new home and it’s running behind schedule, or perhaps the closing dates are ‘off’ by a month or so. Regardless the reason, what are some tips for moving before your new home is ready for you?

The shorter the distance and the fewer the furnishings, the easier things will be. But all of these tips are applicable for anyone needing interim housing, near or far.living between homes

Rent Back

Perhaps the buyers of your home have the flexibility that allows you to rent the home from them after closing and you can stay put. This could be for a few days or a few weeks, but just until your new place is ready for you. The benefits for this is having the security to stay in a familiar place, same schools and you don’t have to move more than once.

Move out and find alternate housing

Sometimes renting back isn’t an option, or perhaps you’re moving far away so you need to rent an interim apartment or house for a month or so. What are some options for rentals?

  • Extended stay hotel ~ if you can tolerate hotel living, these hotels have small kitchens and housekeeping. Be prepared to travel VERY light.
  • Rentals ~ It is possible to find apartments, houses, rooms for rent, townhouses, and mobile homes, for short-medium or long-term leases. Find rentals that work for you, unfurnished, furnished, and even pet friendly. If you have a longer gap between homes, this might be your best choice.
  • Vacant homes ~ perhaps you know someone who needs a house-sitter for a few weeks or the home is sitting vacant and could use some furnishings in it for a season. These arrangements usually come by knowing someone, who knows someone.
  • Family or friends ~ depending on how long you’re looking at, you can always bum some space in the basement of family or friends, and sleep on the couch.

Read More »

When Should I Drop the Price of my Home?

Dropping the price of your home can help you sell.

One of the hardest decisions to make when selling a home is trusting that it has been priced correctly for the market conditions. A licensed REALTOR® is most qualified to help you make that decision. Sometimes, though, the price just isn’t bringing buyers in, or the market conditions change, or the timing of your move changes, which requires a faster sell. When is the right time to drop the price of your home?Dropping Home Price

There are a lot of unknowns when selling a house since potential buyers change by the day (as does the competition). But there are some basic standards that many agents follow throughout the country.

  • Re-evaluate your listing price every 3-6 weeks, compare your situation with similarly priced homes and then decide if a price reduction makes sense.
  • If your home is getting lots of showings and action, good feedback, but no offers, a small price reduction of 1-2% might be enough to get someone who has seen the home, to bite.
  • If your home isn’t seeing a lot of action and is getting so-so feedback, a greater reduction of 5% might be your best option.
  • No showings – you are not priced right, so reduce it about 10% and see if you get people through the doors.

Read More »

How to Improve Your Credit Score

Improve your credit score with these tips.

Credit Scores affect people in so many ways – it impacts either positively or negatively their approval for car loans, credit cards and mortgages, AND at what interest rate/terms they’ll get on that loan. If you are considering buying a home, you know this. Most credit scores fall in the 300-900 range, with higher numbers being the better credit score. Over the course of time, poor credit scores can cost thousands of dollars in fees and interest — but it doesn’t have to be that way. Check out the following tips to help improve your credit score.Realtors improve your credit score

Know your score

Regularly check your credit score and make sure it’s accurate. Any discrepancies on your report should be disputed with the credit bureau and reporting agency. You don’t want to let errors remain on your credit report!

Don’t be late

Late payments are one of the biggest contributing factors to your credit score. Set up a payment reminder system or use an auto-pay option to make sure your bills get paid on time. Always pay something and always be on time!Read More »

What You Need to Know about Appraisal Companies

Choosing a home appraisal company.

Whether you’re buying a house or refinancing, an appraisal is part of your future. In a nutshell, appraisal companies look at your home, compare it to similar homes in the area to determine the market value of your place. Appraisals are safeguards against spending more on a house than it’s worth. What do you need to know about appraisals and appraisal companies?Minnesota Home Appraisal

Appraisal companies have appraisers who visit homes to determine its value. The appraiser will look at the following key things:

  • Square footage of your home
  • Damage that is visible on the interior and exterior of the home that might affect its value
  • Verify any upgrades that have occurred
  • Verify types of heating and cooling systems; and appliances
  • Document the number of bedrooms and bathrooms
  • Determine property size
  • Note the condition of the basement

Read More »

Will My Home Reach its Value Again?

The value of your home could be rising.

Historically, homes have been a smart investment. Owners lived in a house, then got their money back when they sold…it was a better deal than renting. Borrowers got tax breaks, too, and built equity that could be leveraged into bigger houses as their incomes grew.Will my home reach it's value again

But there have been hiccups over the years where home values have dropped significantly and many homeowners found themselves underwater or with a drastic loss of value in their property. Many families today are still waiting for their homes to regain some of its losses so they can move on. When will that home reach its value again?

All key indicators are showing that there is confidence in Minnesota’s economy, which is translating to a positive trend in housing, according to the year end housing report from the Minnesota Association of REALTORS®.

With the continued addition of employment opportunities coupled with low mortgage rates and a tight rental market, many people made the homeownership choice in 2013.  Prices are on the rise in Minnesota and inventory is low, so many of those homeowners who found themselves underwater a few years ago, can now consider making a move.Read More »