Many Sellers Are Dropping Prices

  July is the beginning of the yearly slow in residential real estate sales, which means inventory increases and the buyer pool decreases. According to the Multiple Listing Service (MLS), there are 282 Active Listings, in Chisago County, and 105 of those show price reductions since they were listed. Price reductions started as soon as 10 days on the market, but the majority dropped their price at about 30 days on the market. The median marketing time for the Active listings is 56 days. The median price is $319,900.

  There are currently 119 Pending listings on the MLS. This means there is a contract with no contingencies than financing and title work. The median days on market for the Pending sales is 24, and the median list price is $267,000, which is 20% lower than the homes that haven’t sold.

  According to the MLS, there were 144 new listings, in July, in Chisago County and 49 of those sold in the same month. Three of those listings were cancelled or expired. Twenty-Five of the July listings were new construction and 7 of those sold. The median list price of the July listings was $292,949 and the median list price, of those that sold, was $243,800.

  You can see the homes going on the market have a much higher median price than what the buyers are purchasing (the Pending sales). One reason for the high prices is because March, April, May, and June typically have the most sales, the lowest inventory, and the highest prices because of multiple offers. It usually takes 30-60 days to get most homes closed. Selling prices aren’t disclosed until a sale is closed, so when agents do their market analysis, they are using the high sale prices, in the Spring, which doesn’t take into consideration the current market activity. 

  There are still many homes that sell quickly. A lot of new construction sales don’t go on the market until they are sold, so they may show up with zero days on the market. There is a shortage of lake homes, first time home-buyer homes, and affordable one level living homes.

    New listings normally slow-down in the fall, and many existing listings will expire, which will help reduce the inventory, so the sellers that need to sell should be able to. 

     An experienced real estate agent will continue to provide you with market data, while you are on the market, to determine if a price reduction could help you achieve your goals.

  Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

New Construction vs Pre-owned Homes

    According to the Multiple Listing Service there have been 60 new construction, single family sales so far, this year, in Chisago County. The average price of the single family, new construction sales this year is $294,000 with an average price per square foot of $198.00 During the same period in 2018 there were 70 sales with an average price of $322,000 with an average price per square foot of $189.00.

  There have been 392 pre-owned single-family homes sold this year with an average price of $278,000 and an average price per square foot of $137.00; compared to 436 sales during the same period last year with an average price of $257,000 and an average price per square foot of $130.00.

  Sales are down in both categories, but at a higher rate for new construction. Prices are up in both categories about 10% over 2018. 

  This year there have been 11 new construction townhome sales, in Chisago County, with an average sale price of $242,000 and an average price per square foot of $160.00 compared to 32 pre-owned townhome/twin-home sales in Chisago County with an average price of $203,000 and an average price per square foot of $128.00.  

  Prices are higher with new construction, but the advantage is everything is new and under warranty. New construction also offers the latest trends and customization. 

  With pre-owned homes, you tend to get established, high demand neighborhoods, larger lots, larger garages, and more finished square footage. 

  One level-living-homes are in high demand for new constructions as there are very few pre-owned homes that don’t have stairs at the entrance or garage, and most pre-owned homes have the laundry on the lower level. Many down-sizers want smaller lots and an association to take care of lawn maintenance and snow removal, and they want to customize the floor plan. There is great appeal for snow-birds to be able to feel secure leaving their home for the winter. 

  The best value homes whether new or pre-owned are split entry homes. The larger the foundation, the higher the price per square foot. Above ground square footage has higher values than finished basements. 

  An experienced real estate agent can help you find the right lot and builder to design your dream home.

  Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

The Real Estate Market is Heating up!

  After another long, hard winter new listings are starting to enter the market. Inventory is extremely low and multiple offers are common as buyers are competing for homes to buy. In March of 2018 there were 113 new listings in Chisago County but there were only 87 new listings last month. 

   There is especially a shortage of one level townhomes for seniors, lake homes, and homes that first time home-buyers can qualify for. 

  Looking at the current Active Listings on the Multiple Listing Service for affordable homes that first time homebuyers qualify for; a 3-bedroom, 2 bath, rambler with 1700sf (including basement) and 1 garage stall in Rush City was listed for $160,000 and had multiple offers the first day on the market. The best buy in the Chisago Lakes Area was in Taylors Falls with a 3-bedroom, 1 bath home with 1150 sf and a 2-car garage for $190,000. It also sold in multiple offers the day on the market.

  There are 18 pre-owned waterfront homes on the market, in Chisago County, with a median price of $342,450. New construction is driving prices up with 11 “to be built” homes on waterfront with a median price of $490,000.

  There are 31 townhomes on the market, 12 of those are pre-owned with a median price of $222,500. There are 19 new construction townhomes on the market with a median price of $255,900. The median price of the new construction, one level living townhomes in the Chisago Lakes Area is $296,900. 

  Homes that sell in April and May typically get the highest prices, because of the pent-up buyer demand. New listings will continue to increase through June, but if your home isn’t sold by July, you run the risk of selling off season. Home prices typically start to decline in August through the end of the year.

  If you are thinking of selling soon, now is the time to talk with an experienced real estate agent for advice on the best time to sell your home, and tips to get the best possible price. 

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

MHFA Provides Down Payment Assistance

   Normally a buyer makes a down payment when purchasing a home, unless they are using VA financing. FHA loans require a minimum of 3.5% of the purchase and Conventional loans require a minimum of 3%. If a buyer doesn’t have a down payment Minnesota Housing Finance Agency (MHFA) may come to the rescue.

Frank Kubitschek, a local Mortgage Loan Officer with First Centennial Mortgage, offered the following explanation: The MHFA is a state agency that has the sole mission to make housing more affordable to the average citizen. For Home purchasers, they provide “Down Payment Assistance Loans”, not only for First Time Home Buyers, but for individuals who own or have owned homes in the past. These “Down Payment Loans” come in two different varieties, A Deferred Payment Loan and a Monthly Payment Loan.

First Time Home Buyers are eligible for the Deferred Payment Loan, but they must meet certain income requirements. Maximum income for this program depends on family size and total family income. For example, a family of four, with a total family income of $85,000 or less, would be eligible for a Deferred Payment Loan of up to $10,000. A Deferred Payment Loan does not accrue interest and you do not need to pay it back until you move out or sell the property. At that time, you would repay the principal balance of the original loan.

First Time Home Buyers and Buyers who have owned before are eligible for the Monthly Payment Loan Program. A First Time Home Buyer with a family of four, with a total family income of $108,400 or less, would be eligible for a Monthly Payment Loan of up to $15,000. Buyers who are not considered first time buyers can have a family income of as high as $141,000 and still qualify for the $15,000 loan. The Monthly Payment loan is a second mortgage on your property. The monthly payments are based on the interest rate of the first mortgage on a ten-year amortization schedule.

MHFA requires that both the Down-Payment Assistance Loans and the first mortgage are obtained through a qualifying MHFA lender, and they require the buyer to pay a minimum of $1000 towards the purchase. This must come from the buyer’s savings and cannot be a gift.

The MHFA Loan Programs allow the seller to contribute to the buyer’s closing costs. This would be negotiated by your real estate agent.  Couple this with one of the Down-Payment Assistance Loans, you will see that an individual could purchase a home for as little as $1,000, if the seller pays the buyer’s closing costs.

An experienced loan officer or real estate agent can guide you to the programs available in Chisago County.

 

   Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

One Chance to Make a Good First Impression

  As we approach the busy holiday season and cold snowy weather, we have limited time to get home listings sold. For those that still want to sell their home this year, it is more important than ever to make a good first impression with buyers. The highest number of showings is usually the first ten days that a home is on the market. Staging or improving your home later, may include a price reduction.

  I was talking with a friend over the weekend that sold her home in another state, and she was surprised when the real estate agent recommended staging her home, as she thought it was perfect. Over half of her furniture and accessories were removed and the home was thoroughly cleaned, prior to the photos being taken. The home was priced competitively, and it sold for full price in 2 days.

  Another buyer, I spoke with felt good about his house and wanted to price it high as he didn’t want to leave any money on the table. He felt he could always reduce the price but couldn’t raise it. This house needed a lot of work as it had been a rental property and virtually no maintenance had been done for 15 years. The seller didn’t have the resources to make any repairs. 

  I knew the buyer, for this home, would be a contractor or someone with extra money that wasn’t afraid of some sweat equity. The property wouldn’t meet FHA or VA qualifications, with peeling paint and other hazards. In this case the property was emptied, cleaned, and priced $25,000 lower than if the property had been maintained as needed. 

    I showed a lake home a few months ago that had a new septic mound installed which created a hill between the house and the lake. Dozens of buyers looked at the house and it sat on the market for months, before the seller hired a landscaper. Had the beautiful improvements been made before it went on the market, the house could have sold faster without the seller having to reduce the price.

 

  With any home we are selling, we try to determine who the buyer will be and adjust our marketing to that buyer pool. A contractor or investor doesn’t care about staging as they see the property as a future investment. Buyers that purchase emotionally want to feel like they can move right in and feel at home. A buyer looking for a lake home or one level living, has specific requirements, and may look beyond staging. 

 

An experienced real estate agent can help you make a good first impression with your home.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Health Hazards at Home

  As the weather gets colder and windows are closed, it is important to give your home a check-up. There is a false sense of security when it comes to being safe at home. When people buy or sell a home, most of the problems are identified; the rest of us may live with hazardous situations for years.

  Check your attic for bat droppings, rodent trails in the insulation, bird nests, mold or water stains.

  Walk around your furnace and water heater and look for combustible materials, laundry, or storage items that are too close. Change your furnace filter and smell for gas. I have seen many furnaces test positive for carbon monoxide and gas leaks. If you have an air-exchanger, make sure it is running; newer homes are more air-tight and need fresh air circulating.

  Change the batteries in your smoke and carbon monoxide detectors. There should be a smoke detector in each bedroom and a carbon monoxide detector within 10’ of each bedroom, in addition to other areas. It is recommended that the detectors be replaced every 10 years.

  Inspect your down spouts, extensions, and grade around the house. Water should drain away from the house.

  In older homes, check for peeling paint or asbestos. Both are hazardous to breath, so have an abatement specialist recommend the correction. You can purchase a lead test from the hardware store.

  Test your drinking water. I have seen water test positive for bacteria, lead, and we often see rust and manganese. You can purchase water test kits from Chisago County, or you can contact water treatment companies.

  Test your home for radon. One home can be radon free and the neighboring home can be hazardous. Radon is the second leading cause of lung cancer. You can purchase test kits at the hardware store or contact a radon mitigation company.

  Look for mold in the basement, bathrooms, under sinks, and leaky windows. If mold penetrates wood, insulation, or sheetrock it will be expensive to remove and repair.

  If an outlet, light fixture or switch isn’t working, have an electrician inspect and repair to avoid an electrical fire.

  Walk around your house, garage, and yard and look for anything that may need attention. Be safe and be pro-active. In addition to protecting your safety and health, regular maintenance checks will save you time and money when you decide to sell your home.

     Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.