Buying a home in today's market

Why Homeownership Is Still A Smart Long-Term Decision

You’ve heard news reports saying that the housing market is in turmoil, and that home prices are stalling, if not falling, in many areas. And it is tougher to get home financing. So does this mean it’s game over – is it just too late to buy a house?

Well, before you write another rent check, or write off the opportunity to buy another property, consider the following things you need to know when it comes to homeownership.

HOMEOWNERSHIP IS A SOLID LONG-TERM INVESTMENT.

In fact, it is still one of the best long-term investments you can make. That’s because homeownership has proven to be a critical contributor of financial well-being for American families for decades. While residential real-estate did especially well between 1998-2005, I’m not thinking of just that period. Instead, housing has been making consistently solid gains since at least the 1950’s. It’s simple – long-term homeownership generates wealth, renting your home does not.

THE IRS GIVES BIG ADVANTAGES TO HOMEOWNERS.

The federal government provides tax breaks for homeowners – from allowing you to deduct your mortgage interest, mortgage insurance and property taxes to exempting capital gains taxes on your primary residence, within limits (be sure to check with a tax professional to see how these may apply to you). In some cases, you may find that your after-tax mortgage payment is comparable to, and perhaps lower than, your current rent payment!

BUYING OPPORTUNITIES HAVE IMPROVED.

In most of the country, the number of homes on the market has risen steadily, making this largely a buyers’ market. Sellers are more willing to make concessions on price or even pay part of the closing costs. Mortgages rates remain low by historic standards.

YOU DON’T HAVE TO WORRY ABOUT TIMING THE MARKET.

Ideally, you’d snap up a new home when the price is at its lowest, and see it start to appreciate right away. It’s nice to dream, but don’t let that keep you from getting into the market. Remember it’s not timing the market, it’s time in the market. If you’re making a long-term purchase, you’re usually better served just getting in.

SMART HOME FINANCING OPTIONS ARE STILL AVAILABLE.

There’s a wide array of mortgage products out there, filling various needs for borrowers in certain situations. Be sure you understand what you’re getting. Will the rate change? If so, how soon? How high could it go? Can you handle bigger monthly mortgage payments? Are you paying down the loan’s outstanding balance?

These are just some of the questions you need to consider. The mortgage that’s right for you depends on your situation and your preferences, and some financing options available to you may harm, not help, your financial security. That’s why it’s critical to work with a lender who takes the time to understand your financial circumstances and preferences, and helps you understand your choices.

Again, the main point is: Homeownership is an important way American families move ahead financially, and waiting for the current concerns to fade away can cost you. Don’t simply assume that this is a bad time to buy real estate. Go beyond the headlines, and make yours a well-informed decision.

The #1 site to use for buying or selling real estate in the Lake Minnetonka area http://www.homesbyjoel.com

NOW is the time to buy!

Why I even read the Chicago Tribune is a quandary to me, given that the paper reads more like the Huffington Post these days. From time to time I enjoy real estate writer Mary Umberger, although I think she's a little pessimistic on the market, and do think she ignores the real reasons that people buy houses for. And she ignores me when I write to her with article ideas.
Recently she wrote a little pros/cons section on whether or not it's the time to buy a house. Reasons to buy? High inventory, low prices, low interest rates, etc. Reasons not to buy? Prices still in decline, renting isn't a crime, financing is more complicated, etc.

Good reasons Mary, but what about addressing the real reasons that people buy and don't buy? What if, instead of providing biased opinions from those on each side of the argument, we broke it down and really made it easy to figure out if it's a good idea to buy or not to buy? What if some people don't really buy because of interest rates after all, and what's all this garbage about a market bottom?

What if people buy because they're confident and don't buy because they're scared and the rest of the reasons are just fluff? If people buy because of interest rates, why did anyone buy a home from 1980 to 1983? Interest rates aren’t the key, market indicators aren’t the key, lifestyle accomplishment is the key. The sooner we understand that as agents, the more effective we'll be.
First, let's get this "market bottom' theory out of our way. I've said it before, and I'll say it again, market bottoms are only easy to identify once they've happened. Look at the stock market. By most accounts, we've been to the market bottom of this recession cycle.

Take a look at a stock chart, or individual stock hi/lows, and you'll see that most stocks hit their 52 week lows on March 5th of this year. Did you buy a a hundred thousand dollars worth of stocks on March 5th? If you did, you probably would have turned $100k into $300k pretty easily. What's that? You didn't buy on March 5th? But that was the market bottom! Why on earth didn't you buy? What's wrong with you? I really can't believe you were sitting there, at your computer screen, with Etrade account open, and you didn't pull the trigger on CAR at 33 cents. You could have turned $100k into $3,630,303 in 5 short months. Shame on you.
See why market bottoms aren't too cool? Because when they happen, there's usually too much fear in the market to encourage buying. What is true for the stock market is also true of the housing market. Market bottoms sound great in theory, but they're just too darn hard to identify while they're happening. Instead of an identifiable bottom, why don't we just focus on a bottom trough, a trough that we're certainly in right now.

Movements to either side of this current point are going to be prevalent, which is why we'll see positive housing numbers one quarter, and negative housing numbers the next. We're in a sideways market, and I'd suggest we're in a market bottom that we'll stay in for another year or so. As long as REO property dominate the sales statistics, we won't see a true recovery towards a "normal" market. Jon Stewart fans, mock Jim Cramer all you like, but he had been saying that the time to buy a house is before June 30th, 2009, and he's probably going to prove to be right on the mad money with that recommendation.

So if we're in the market, why buy? Do you believe the market bulls or bears? Do you focus on Mary's 5 positive signs, or are you negative and you prefer to side with the cons? Go right ahead and rent for the rest of your life, and maybe, just maybe your landlord will let you paint a white wall tan. If you ask nicely. What if you just let the 5 reasons to buy and the 5 reasons to wait cancel each other out, and buy for lifestyle. Housing bull? No thanks. Call me a lifestyle bull. A lifestyle bull in a confidence sapped china shop. Buy because that house you grew up admiring just came on the market. Buy because you‘re confident in your job status, and that new development just slashed their prices 35%. Buy because your neighbor cuts his grass at 7 am on Saturday mornings.

Buy because the city heat is just about to make your head explode, and cool lake breezes are better than warm alley breezes any day of the week. Buy because you’ll walk a little taller if you live on that street where the Maples high overhead reach across the street and shake hands with each other Above all, buy because you want a better lifestyle for you, for your friends, and for your family, and the purchase you’re contemplating allows you to more easily obtain that lifestyle.

If you need fundamentals to buy, realize that interest rates are unbelievably low and inventory is monumentally high. Realize that whether or not the market creates an identifiable bottom, you're not going to know when it does. If you're hoarding cash hoping for market bottom balloons to be released from the pink unicorns soaring in the sky, I hope you have fun swimming and boating in your money vat like a decidedly uncartoonish Scrooge McDuck. Just buy because of the 320 months of summer we're all hoping for out of life, way too many of them have already been wasted worrying about 5% market swings, and 5% interest rates.

Reprinted from Broker agent news

Market Report: 16 Points of Local Interest

As the summer selling season toodles along, we continue to release detailed statistics on what's going on in the local market because we know there is a lot of interest from our REALTOR members and from the media, local government officials, various research entities and , of course, area residents. In the last several weeks, we have released a lot of new numbers, and we thought we'd take this opportunity to share them with you.



The word on the street is that people like lists more than prose for receiving digestible information. Alright, we can do that.



1. June 2009 saw 5,183 signed purchase agreements, up 33.7 percent
from June 2008.

2. 40.7 percent of closed sales in June were lender-mediated, compared
to 59.7 percent in January.

3. A decrease in lender-mediated market share brought the overall
median price up to $173,500 in June. Despite the increase from May,
that was still a 15.4 percent drop from June 2008.

4. The median June sales price of traditional homes was $210,000,
down 7.7 percent from a year ago.

5. The median June sales price of lender-mediated homes was $124,025,
down 21.9 percent from this time last year.

6. The number of properties for sale at the end of June was 26,204,
down 21.9 percent from this time last year.

7. There were 7.3 months of supply available at the end of June, down
significantly from the 10.6 seen at the same time last year and trending
back down towards a balanced market of five to six months of supply.

8. There were 10.9 months of traditional supply and only 4.4 months of
lender-mediated supply.

9. June's pending sales were the highest June showing since 2005 and
the 12th consecutive month of year-over-year increases.

10. The number of foreclosures and short sales available for sale at the
start of July was 18 percent lower than it was last year at this time,
dropping from 8,163 to 6,685.

11. The number of lender-mediated homes available for sale is dropping
in every price range except above $1 million.

12. Consumers are buying foreclosures in record numbers, with sales
increasing five times over in the last two years.

13. Prices of foreclosures will likely not go any lower.

14. With low mortgage rates and the $8,000 federal tax credit for
first-time home buyers, we're seeing the recent junp in sales spill
over into the traditional market.

15. We still have an abnormally high number of foreclosures and short
sales, but it's an improvement from six months ago.

16. Sellers still face a challenging market, but things look better for them
than they have in awhile.



To see all active MLS listings, please visit http://www.homesbyjoel.com/

The Skinny

Minneapolis and Saint Paul: Partners in Foreclosure Absorption
Our two central sister cities, Minneapolis and Saint Paul, have launched an ambitious collaboration designed to encourage consumers to purchase homes within their borders. With lender-mediated properties comprising a healthy chunk of the homes for sale in each city, we have to assume that the effort is motivated in part by a desire to see those properties become owner-occupied. The website http://www.livemsp.org/ shows off 80-plus neighborhoods in the two cities, as well as every financial incentive for homeownership or renovation available.

Gallup: Jump in Home Buyer Confidence
Each year, the Gallup organization takes a poll of thousands of consumers to get a feel for whether or not they think it's a good time to buy a house. Not surprisingly, the numbers have taken a beating the last three years. In 2008, the percentage of respondants who believe that it was a good time to buy stood at 53%, the second lowest mark since 1979. This year? It skyrocketed up to 71%.

Finding Price Bottoms
We recently announced that the number of foreclosures and short sales on the market in the Twin Cities has dropped over 1,200 units from February to April. That's a valuable measurement, but it also helps to look at metrics, that take into account both supply AND demand, like Months Supply of Inventory (MSI), to get a feel for where we're at in this market cycle.


To see every house on MLS visit www.homesbyjoel.com

Your Real Estate Expert,

Joel Hentges
Joel@homesbyjoel.com

Homes by Joel is brought to you by Joel Hentges of Counselor Realty. Helping people buy or sell homes and real estate in the Greater Lake Minnetonka area. Especially in Chanhassen, Deephaven, Excelsior, Minnetonka, Minnetrista, Mound, Orono, Tonka Bay, and Wayzata MN Minnesota. Offering many Minnetonka Lakeshore homes for sale.

7 TIPS TO HELP YOU BUY MORE HOUSE WITH LESS MONEY

For most of us, shopping for a new home also means shopping for a home mortgage. In both exercises, you'll want to be a smart shopper. Working with a real estate agent, you can find a house you'll love. And while it's not likely you'll actually "love" your new mortgage, here are seven secrets to make sure your financing needs and the lender you're considering are a good match. Then see the box inside about finding the right mortgage for you.

1. MORTGAGE PRE-APPROVAL
A no-cost, no-obligation pre-approval before you start househunting can save you big time; the seller knows you're a "cashbuyer" and may favor your purchase offer over another. Find a lender who offers pre-approval. That's not the same as "instant approval", which is often an approval loaded with qaulifications; or a how-much-can-I-afford "pre-qualification" estimate, which doesn't give you the same bargaining clout.

2. QUICK LOAN PROCESSING
Some lenders offer mortgage approval in just 5-7 days and others use electronic underwriting to give same-day approval. Ask your lender their process. This quick turnaround could get you to settlement sooner, which may make you the most attractive potential buyer to your seller and may mean less time in temporary housing.

3. FLEXIBLE UNDERWRITING GUIDELINES
Some lenders, for instance, count the earnings of a spouse who doesn't yet have a job in the new location but has at least a two-year work history. That kind of flexibility may make you eligible to purchase the home you want.

4. VARIETY OF MORTGAGE PRODUCTS
Perhaps you'll do best with a short term mortgage or an adjustable-rate loan. Find a lender who offers a selection of mortgage and even unique mortgage products which suit your situation best.

5. RATE-LOCK OPTIONS
Find out what rate-lock options are available from the lender. The shorter the lock-time - that is, the shorter between when you agree on a mortgage rate and when you actually go to settlement - the lower the interest rate you'll have to pay.

6. NEGOTIABLE LOAN FEES
Shop for a lender whose fees are reasonable. Ask about all charges, such as a "commitment fee" or "underwriting fee" or "processing fee." Mortgage lending is a competitive business and lenders sometimes will negotiate fees to get your business.

7. TEAMWORK PAYS OFF
Every purchase requires an effective three-member team; buyer, real estate agent and mortgage lender. Work together with a real estate agent who specializes in your area to find the house that's right. Team up with a lender who can make sure your loan maximizes your buying power and is right for you. Make the most of your home-buying team and everybody wins.

For more tips on how you can buy more house for less money, call today. Joel Hentges at 952-475-9541, Counselor Realty. To see all homes listed on MLS visit www.homesbyjoel.com

"The bottom of the housing downturn is in sight.."

Sales are up sharply in many of the hardest-hit markets, and prices are firming in many others.

And now, even some of the country's previously most-bearish economists and media outlets are seeing the light.

Last week, Dr. Mark Zandi, chief economist for Moody's Economy.com, surprised analysts by announcing that "the bottom of the housing downturn is in sight for the nation."

Just days later the Wall Street Journal-which had been among the most pessimistic of major U.S. dailies-ran a prominent article with the headline: "For some, it's finally time to dive into the housing market."

The article focused on purchasers in Phoenix, Seattle and Connecticut who recently found that lower prices and affordable mortgage rates made ownership possible for them. They got what appear to be great deals.

The journal quoted one Phoenix buyer who had just picked up an attractively-priced first home as saying. "six months ago, I didn't think I would ever own a home. Now I do. It's so perfect."

It's obviously good news that doom and gloom economists like Zandi and the Wall Street Journal are picking up on what's happening in local real estate markets. More important for the larger market, though, is that they are in the position to spread the word to consumers that it's now not simply a "good time to buy," it's also a safe time to buy.

Mortgage rates continue to hover near historic lows. According to the Mortgage Bankers Association, thirty year fixed rates last week averaged 5.2 percent, down from 5.3 percent the week before. Fifteen year rates average a flat 5 percent.

But don't mistake the message here: the economy as a whole still is facing huge problems - unemployment at 7.6 percent, banks taking billions from the government, a stock market that's still pumping out losses, household consumption down.

None of that is positive for real estate.

But here's what may be developing: Just as housing's troubles preceded the rest of the economy on the way down, there are increasing indications that housing could be out ahead on the national economic recovery.

Why? Because pent-up demand is strong, affordable financing is there for buyers with decent credit and a down payment, and improved federal tax credits incentives make the equation even better.

Once more consumers grasp the fact that the worst is over for real estate, we just might see some very encouraging numbers in the months ahead.

To see every house on MLS visit www.homesbyjoel.com

Your Real Estate Expert
Joel Hentges
Joel@homesbyjoel.com

Homes by Joel is brought to you by Joel Hentges of Counselor Realty. Helping people buy or sell homes and real estate in the Greater Lake Minnetonka area. Especially in Chanhassen, Deephaven, Excelsior, Minnetonka, Minnetrista, Mound, Orono, Tonka Bay, and Wayzata MN Minnesota. Offering many Minnetonka Lakeshore homes for sale.

No cost/low cost ways to TWEAK your home for sale.

MOVE IT. Simply rearranging the furniture can reenergize a room. Add and remove furniture, lamps, rugs and accessories from other parts of the house to create a whole new look. Mirrors are particularly useful when it comes to updating a room. Try one out in different rooms to see where it fits best. Even just moving a mirror to a different wall can create a more welcoming feel.

PLANT IT. Houseplants are a generally undervalued design component that can add texture, warmth and color to any room. Just drop plants in their store containers into decorative planters. Small plants can be moved easily and regrouped to change a room's look, while larger ones make a statement on their own. Group plants of differing heights, fullness and color for most dramatic effect. Jettison the scraggly specimens, Westmann says. "Its important to have plants that are well maintained and in tip-top condition.

PAINT IT. Paint is one of the easiest and most cost-effective ways to make a substantial change. Use dramatic colors in powder rooms and dining rooms and more neutral colors in living spaces. When selecting colors, "be sure to ask,`What am I trying to do? How do I want this to feel?" Birdsong says. "And always, always do a test before you paint the whole room."

ORGANIZE IT. "Clutter just happens," Birdsong says. "So neaten up!" She advocates a variety of organizing tools to make a space feel polished while maintaining utility. Hooks and shelves inside the door give people a place to hang coats and keys, while canvas bins or natural baskets help contain magazines and mail. "Just a row of hooks preattached on a board is so easy to install," she says. "And shelves are a great way to neatly display collectibles."

HIDE IT. Have a banged-up wall? It may be easy to camouflage. Paintable wallpaper (available for as little as $16/roll from Creative Wallcovering) will smooth out an uneven wall or hide minor dents and dings. Adventurous home owners can even try a simple two-step painting process for a more complex finish. Birdsong suggests applying a solid base coat, then a glaze. "these days, it's pretty user-friendly," she says. Caution: Your intent should never be to mislead buyers; be sure to disclose flaws that would affect home value.

REPLACE IT. Cabinet handles, switch plates and other small pieces of housing hardware can update a home for just a few dollars a piece. Westman suggest scanning each room to see what looks worn or outdated and then replacing it. Inexpensive quick-connect faucets can make upgrading the look of your bathroom a snap. Just be sure to measure before you go to the hardware store. Some sinks are drilled for eight-inch spread. Others require just four inches. "And don't forget the toilet seat," adds Westman. "Fresh towels and a new toilet seat go a long way toward making a bathroom feel clean and new."

LIGHT IT. Lighting can have a major impact on a home's look and feel. Whether a room seems dark or too bright and harsh, try "layering" the lighting by adding accent pendants and lamps. Make sure they have independent controls, so that you can turn them on and off at will. "Light is such a mood setter," Westman says. "You can create a cozy feel just by turning down the lights." Add dimmers in the dining room, bathrooms, kitchen and even the hallways for less than $4 each. then adjust the lighting to create the mood you want.

CLEAN IT. Turn a critical eye to the flooring to make sure it's up to snuff. Scrub grout and seal natural stone. Rub out scratches and nicks on wood floors with scratch cover. "Get down on your hands and knees and detail the floors," Bridsong says. "It takes a little elbow grease, but the results are well worth it." Vinyl flooring is a bit harder to spruce up but usually can be replaced easily and inexpensively.

To see every home on MLS go to www.homesbyjoel.com