Realtors in the Public Insight Network say selling houses under $200,000 is a snap.
Laura Fulayter, a Realtor from Minneapolis, said she sees multiple offers on homes in the first-time buyers’ range. Jim Lugar from Minnetonka said bids on these homes can resemble a frenzy. "It’s like a little mini-buyers market," he said.
The $8,000 homebuyers credit and the pent-up demand from renters play a role. Then there are the tumbling mortgage rates, (check out the dip below 5 percent on Freddie Mac’s 30-year fixed rate mortgages).
So we see home inventory falling (according to Minneapolis Area Association of Realtors) and we see the number of offers drawing even with new listings (according to Teresa Boardman, a St. Paul Realtor who writes about the market).
But those in the house-selling business say the industry hasn't truly turned the corner, and that’s because the "mini-buyers market" has yet to spread. Foreclosed homes and short sales drive this low-end market.
The Minneapolis Area Association of Realtors said sales above $190,000 are down 19.2 percent from a year ago.
Normally people sell lower-priced homes to move up to more expensive dwellings. But, of course, that's not going to happen on a foreclosed property. The fine economics blog Calculated Risk has a term for this phenomenon: "one and done."
Realtor Laura Fulayter said she's not seeing people who just want to sell a home because they want to buy another property.
The question for this housing market - and this economy is: How long is this a "one and done" market?
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Comments: 7
Thank you for sharing this
Michigan's market is one of the worst and not improving for sellers. We sold our home two years ago, just before the market really tanked. The price wasn't as good as if we'd sold a year sooner, but better than it would be now. Most of the homes that were for sale when we listed are still for sale or foreclosed.
For those who have reasonably secure employment and are not afraid to buy a home, the bargains are incredible. A friend's granddaughter just bought a foreclosed home once valued at $350,000 for $75,000. It's a four bedroom, 3 bath home with attached 2.5 car garage. Amazing value for buyers!
But therein lies the point. Foreclosed homes are going. Short sales are happening. But the mid-sized priced homes aren't. Even those with reasonably good employment are being very cautious, said one realtor. And once you get out of FHA range (they only finance homes up to $365K) then the conventional mortgage market gets very tight. When will that change?
It's a shame what the country has come to.
More evidence that the first-time flurry might have little sustaining power. http://bit.ly/1aczVF
Then you have this quote in a New York Times story by Morris Davis, a real estate expert at the University of Wisconsin: "We're about to have a big problem. Foreclosures were bad last year? It's going to get worse."
What's happening is that the banking and mortgage business is getting back to reality. You actually have to have a down payment and good credit to buy a house! What a concept!
The idea of having to loan to people that couldn't afford it and then having the government back up those risky mortgages!