Real Estate Market Hot in Madison

Market Update for Dane County and First Weber

The past few years in almost every market in the United States has been anything from slow to depressing for all real estate sales.  With the market improving and the local area seeing a lot of job growth, higher rents and an unprecedented start to the first 5 months of real estate sales, the market is starting to gain momentum.

Here are statistics( stats from SCWMLS service) that show the true picture of the market.

South Central Five months Year to Date:

• Units closed are up 17.5% over last year for single family and condo.
• Average sale price is almost even at $168,207 this year vs. $169,386 last year.
• List to sale ratio is 94.66% up from 93.84% last year in the same period.

First Weber South Central Five months Year to Date:

• We are up 25% in closings.
• Our average sale price is up by 1%.
• Our market share has gone up from 16.64% to 18.03%

Dane County Five months Year to Date:

• Sales are up 16.6%.
• Average sale price is down 3.6%.
• List to sale ratio is 96.07% up from 95.71%  

First Weber Dane County Five months Year to Date:

• We are up 24% in closings.
• Our market share has jumped from 18.82% to nearly 20%.

We have experienced month over month sales increases for 11 months in a row in Wisconsin.  Sellers are more realistic and better at getting their homes priced right and having their homes decluttered and staged. 

Buyers have more confidence and are acting with less resistance than we have observed in the last few years.  This is evidenced by the fact that they are looking less and buying more and that the offers are much more likely to stay together once accepted.  

With interest rates where they currently sit, 3.875% for a 30 year mortgage, it is one of the best opportunities for buyers to buyer and sellers to sell their home.

Is 20% down payment right for you??

Is it worth putting down 20%??

When I was reading the KMC Blog this morning, I really liked the topic of weighing your options as a consumer in the process of getting a home loan.  This is a difficult question to ask yourself if you are purchasing a home.  Right now with the current rates, every $10,000 costs roughly $50 per month.  Most of us can make $50 more a month work but might have a hard time making an additional $10,000 down payment on a new home.

These are perfect questions to ask not only your Realtor, but your lender.  Working with a trusted lender will help you understand these options to the fullest.  Depending on the type of loan you get you also may have a PMI (Private Mortgage Insurance).  For more information on PMI and the rules, please check out the FTC's Site: Click Here

Also, speak with your tax consultant about the amount of deduction you will be able to have with a mortgage and PMI.  

This past week I was at the National Association of Realtors in Anaheim, CA I went to hear Chief Economist Dr. Lawrence Yun speak.  The big take away from that report was that rates will go up as inflation increase.  Every economist and money manager will tell all of us the same message....inflation increases are inevitable over the next few years.  They won't be extraordinary, but they don't have to be to affect the mortgage rates.  His prediction is that rates will increase .5% to 1% each year for the next 3-4 years.  That means that rates will most likely be around 4.5%-5% next year, 5% -5.5% in 2013, 5.5%-6% in 2014.

Here is what that means in real dollars.  If you have a $200,000 mortgage that you are looking to have when purchasing a home, a mortgage with 20% down and 4% interest rate will cost you $764 a month with P&I( taxes not included in any of these calculations).  At 5% this is $859 a month.  This is $95 more per month, $1140 more a year and $34,200 more over 30 years!!!  The difference between 4% and 6% is even greater.  A month it is $195 more a month, $2340 a year and $70,200 in 30 years!!

Showing you these numbers is not to scare anyone...I hope that you are not after seeing this information.  I want to make sure that everyone that is looking to purchase a home is well informed and does what is best for their personal economy.

With Thanksgiving around the corner, it is important to remember what we are thankful for and all that we have and all of those people that are in our lives.  Happy Thanksgiving!

What's Your Credit Like and How Can It Affect Your Home Purchasing Power?

If you plan to use a mortgage for your next home purchase, you’ll want to keep your credit scores 

 as high as possible. Credit scores play an out-sized role in determining for which mortgage product you’ll qualify, and to which rate you’ll be assigned by your lender.  The higher your credit score, the lower your mortgage rate will be.

 

The article in Trulia this week was great at explaining the reason's why this is so important.

Check it out on the following link: Credit Scores

What ways would you suggest to help in raising your credit scores?  I would love to here from you!  Happy House Hunting!