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July 2021 Housing Report

By MNR News posted 08-12-2021

New listings and closed sales fall

Demand continued to outpace the available housing supply in July as new listings declined -0.2% and closed sales fell -8.7% compared to 2020. As buyers chased scarce inventory with multiple offers, the median sales price rose +12.5% to $315,000, setting another historic high. The intense activity meant homes spent less time on the market, down to just 25 days—an unprecedented low. On average, sellers were receiving 102.7% of their asking price. The overall supply of homes for sale was down -29.7% to 11,854 and month’s supply sank -34.8% to 1.5 month’s worth of inventory on the market.

“Buyers were still out in full force, and many of them hoped to close on homes before the new school year. Unfortunately, the market could not meet their demand. Even though potential sellers were almost guaranteed to get their asking price, they were reluctant to list their homes because they didn’t want to become buyers in this hyper competitive environment,” said Chris Galler, CEO of Minnesota Realtors. “Although there’s no easy way out of this situation, part of the solution lies in local and state governments easing restrictions, and helping developers build higher density, more affordable housing throughout the state.”

July year-over-year summary:

  • Closed sales: -8.7% to 9,615
  • Median sales price: +12.5% to $315,00
  • Average sales price: +12.9% to $359,700
  • New listings: -0.2% to 11,499
  • Pending sales: -14.2% to 8,923
  • Days on the market: -43.2% to 25 days
  • Homes for sale: -29.7% to 11,854

 Closed Home Sales Across Minnesota by Region

As the housing supply remained low, eight of the state’s 13 regions reported declines in closed sales compared to July 2020. This included the seven-county Twin Cities region, which was down -3.2%. Closed sales were up in three regions, with double-digit growth in the Upper MN Valley, 36.8%, and Northwest, 20.0%. See the chart below for more details comparing closed home sales for July 2021 to July 2020.

July housing numbers

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on which MAR & SPAAR local associations report.

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Home Warranty Pros and Cons

 

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Should you include a home warranty with your new home? Home warranties have changed over the years, and there is not a one size fits all for all homeowners. It’s best to compare the pros and cons prior to purchasing one. Here are a few things to keep in mind when comparing home warranties:

Pro
Home warranties are designed to give the homeowner peace of mind in the event of something breaking down or damaged in your home. This is great option for those homeowners that are not not familiar with household repairs. A plus for home warranties is the flat cost for the repair. You are aware of the cost up front, rather than having sticker shock when an appliance breaks down. This could also be very handy in the event of buying a home with older appliances with limited life. This avoids having to purchase a new appliance, and just repairing the appliance you have.

Con
One issue with home warranties are that an an item may not be covered for repair. You need to read the fine print as to what types of repairs are covered for certain appliances. Another issue is that the home warranty company controls who does the repairs, or that the repair personnel may have several other repairs before they can get your your item needing service.

When looking at home warranties, the bottom line is making sure you find the right plan for your home and your situation.

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June 2021 Housing Report

By MNR News posted 07-13-2021
As closed sales rise and inventory shrinks, new listings can’t keep pace

Competition for scarce housing stock defined Minnesota’s real estate market in June, pushing the median sales price to $325,000, up 18.9% above June 2020, according to Minnesota Realtors® (MNR), the membership organization supporting all 22,000 Realtors in the state. Closed sales rose 12.9% over last year, and a surge of new listings brought 11,908 properties to the market, a 6.5% increase. In a key indicator of the frenzied sales activity, days on the market sank 45.7% to just 25 days—a historic low. Overall, the state’s number of homes for sale were down 40.8% compared to last June, with only 1.2 months of supply available. On average, sellers were getting 103.2% of the asking price, pushing the average sales price to $367,753, +9.3% above 2020. This is an unprecedented milestone.

“The market continues to be highly dynamic but it’s constrained by the number of affordable—and desirable—homes for sale,” said Chris Galler, CEO of Minnesota Realtors. “Rising home prices, competitive bidding, and cash offers are squeezing out many first-time homebuyers. Unfortunately, our ability to create more housing is limited by a complex interplay of factors, from construction costs to government regulations. Based on the numbers, it’s a trend that will continue playing out for the foreseeable future in Minnesota.”

June year-over-year summary:

  • Closed sales: +12.9% to 10,386
  • Median sales price: +18.9% to $325,00
  • Average sales price: +19.3% to $367,753
  • New listings: +6.5% to 11,908
  • Pending sales: -7.0% to 9,620
  • Days on the market: -45.7% to 25 days
  • Homes for sale: -40.8% to 10,227


Closed Home Sales Across Minnesota by Region

Eight of the state’s 13 regions reported increases in closed sales compared to June 2020, with four regions seeing double-digit growth, including an increase of 20.6%  in the seven-county Twin Cities. There were declines in five regions, with double-digit drops in the Upper MN Valley, 11.6%; West Central, 13.1%; and North Central, 15.0%. See the chart below for more details comparing closed home sales for June 2021 to June 2020.

June 2021 Housing Stats by Region

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on which MAR & SPAAR local associations report.

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Summer Homeowner Checklist

By MNR News posted 07-06-2021

Staying Cool and Helping the Planet 💦☀️🌍

 

Summertime is officially here! And while the summer months are great for ice cream and time at the lake, it’s also an important season to keep up with home maintenance.

 

Here are some tips for keeping your home cool, helping the planet, and saving money.

 

Staying Cool

 

Maintain the air conditioner

Just as you maintain your heater in the winter, make sure your air conditioner is in tip-top shape for hot weather. Always remember to:

 

  • Change the filter in the air-to-air converter
  • Change furnace filter for air conditioning
  • Wash out the air conditioner condenser
  • Vacuum any debris blocking the air filter

 

Cool ways to conserve energy

There are many ways to keep your home cool in the summer that are not only great for your pocketbook, but also super helpful for conserving energy and helping the environment.

 

  • Keep your blinds closed to create a cave-like effect. This will make your rooms naturally cooler
  • Make sure your vents are not blocked by furniture or rugs
  • Though it can be tempting to crank the air to max cold, having the thermostat set 5-8 degrees warmer will help you save money and conserve energy, with 78 being the most energy efficient temperature
  • Get an energy audit to assess where cool air is escaping and letting hot air in

 

Water, Water Everywhere

 

Outside

Our lawns and gardens need water to grow and thrive, but there are many ways to keep your gardens happy while saving on water.

 

  • Water your garden with a hose rather than a sprinkler system – that way you can spend some one-on-one time with your garden while making sure you’re not overwatering. Or, if you have a sprinkler system, minimize the watering time for each zone of your yard, and adjust the sprinkler heads to ensure they water grass—not pavement (or pedestrians!). Also, attach a rain sensor to automatically turn off your sprinklers when it is raining.
  • Set up a rain barrel to catch water from your gutters to water your plants and flowers
  • Water your gardens & lawns in the mornings or afternoons

 

Inside

Saving water inside the home is easy with a bit of awareness and a few adjustments. Here are some tips for water conservation in the home:

 

  • Take shorter showers
  • Don’t leave your water running while doing dishes or brushing your teeth
  • Install water-saving sink and shower heads
  • Only run your dishwasher when it’s full and limit how often you run it
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Mortgage Points

 

 

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You could save thousands of dollars, over the life of your mortgage with mortgage points. They are not always the correct option for everyone, so there are some considerations to think of when applying for a mortgage.

What Are Mortgage Points?

Paying your lender in exchange for a lower interest rate is what defines mortgage points. This expense is paid at closing, and is included as an addition to your closing costs.

The Benefit of Mortgage Points

Mortgage points help lower your interest rate, and the primary benefit is that they have the potential to save you a decent amount of money over the life of your mortgage. If you are planning to keep your house long enough to recoup this cost, then this would be a good investment. This is also a good benefit is your are refinancing and plan on staying in your house to get get the value of your investment.

When Not to Buy Mortgage Points

Although mortgage points and a low interest rate are important items to consider when purchasing a home, you should determine the potential time frame you will live in that home. If you are buying with the intent of selling within the next few years, the out-of-pocket investment may not be worth the return.

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May 2021 Housing Report

By MNR News posted 06-14-2021
New listings falling short of market demand

The Minnesota real estate market stayed strong with closed sales up +14.5% over last May, and pending sales increasing by +9.4%. However, demand continued to squeeze available inventory as new listings only inched above last May’s levels at +0.2%. The median price rose to $310,000, up +15.7% from 2020, an all-time high for sales price and a high-water mark for the year over year percentage increase. Days on market dropped by -37% to just 29 days, a historic low. Buyers are feeling the pressure and pursuing homes with multiple offers while houses come on and off the market very quickly. Properties were receiving an average of 4.5% over the original asking price. The statewide inventory of homes shrank to 8,953, down -50.5% compared to June 2020. Total months supply remained historically low at 1.1, down -57.7% from last year.

“As we anticipated, buyers are very active but there simply isn’t the inventory to meet their demand,” said Chris Galler, CEO of Minnesota Realtors. “This has created a competitive environment where multiple offers are the norm. Although you’d think that would be an incentive for more sellers to list their homes, many are hesitating because they worry about becoming home buyers in this environment. It’s a cycle that will only be broken by increased inventory or higher interest rates that slow demand.”

May year-over-year summary:

  • Closed sales: +14.5% to 7,982
  • Median sales price: +15.7% to $310,00
  • Average sales price: +20.6% to $361,325
  • New listings: +0.2% to 10,814
  • Pending sales: +9.4% to 9,642
  • Days on the market: -37.0% to 29 days
  • Homes for sale: -50.5% to 8,953


Closed Home Sales Across Minnesota by Region
9 of the state’s 13 regions reported increases in closed sales compared to May 2020, with six of them seeing double-digit growth. Three regions marketed declines, with North Central down -1.5%, South Central at -6.3%, and Northwest falling -14.3%. See the chart below for more details comparing May 2021 to May 2020.

graph of housing data

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on which MAR & SPAAR local associations report.

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Getting The Most Out of Solar Panels In Minnesota

By MNR News 
Today’s solar panels are less expensivemore powerful, and ready to take on Minnesota winters 

Although you might think a solar-powered home is much better suited to the sunbaked expanses of Arizona than Minnesota’s snowy north country, that’s not actually true. In fact, the North Star state is surprisingly well suited for turning solar rays into electricity for your home. Plus, with a 26% federal tax credit and rebates from state utilities, a solar-panel array on your roof is a good investment today and in the long term. Here are the facts: 

 

The average 5-kilowatt (kW) rooftop solar-power system produces 15,232 kWh of power a year. That’s enough energy to offset the typical $150 a month electric bill. Over the system’s 25-year lifespan, you can save up to $49,944*. 

 

5-kW system is about $12,494* to purchase and install. The federal government’s 26% solar credit brings that down to $9,916*. 

 

Of course, you don’t need a weather report to know that Minnesota is not exactly a sunbelt state. So, there’s no doubt that your snowbird neighbor down in Winslow, AZ is getting more juice from their solar system than your frosty array in Brainerd. That, coupled with the lower cost of conventional energy in Minnesota, means it could take up to a decade to see a full return on your investment.  

 

Whether solar power is the right choice for you depends on several factors: 

 

  • Latitude and longitude of home 
  • Position of home relative to the suni.e., north or south facing, etc. 
  • Presence of shade from trees, hills, or tall buildings 
  • Prevailing weather patterns 

 

To get a better idea of how solar panels would perform for your home, check out the PVWatts Calculator developed by the National Renewable Energy Laboratory. After you do that, read on for a quick primer on the kinds of solar panels available to homeowners. 

 

*Source: Solar Estimate, a non-profit organization that helps consumers estimate the cost of installing solar panels. Their calculator was created with the help of a grant from the U.S. Department of Energy. 

 

Solar panels actually work more efficiently in the cold than in the desert heat. 

Types of Solar Panels 

All solar panels are made from a semiconducting material that converts light into electricity. Silicon semiconductors are the most common, but lower-cost thin-film panels use a range of materials. See the chart below to compare the three major kinds of solar panels. 

Solar Panels


What’s the Best Solar Panel for Your Home?
 

Monocrystalline take up the least amount of space and are the most efficient. Polychrystalline, due to lower efficiency, require more space to produce the same power output as mono. Thin film panels are a good choice if your roof can’t bear a lot of weight. Ultimately, your choice will be determined by your budget, location, roof structure, and your energy producing goals. 

What’s What with Watts? 

A watt is the amount of energy that an electrical device burns every second it’s running. So, if your solar panel produces about 320 watts in an hour, that’s enough energy to keep your refrigerator cool and humming for 7.5 hours. 

 

A Short History of Solar Power 

Think of solar power as a space-age invention? When American inventor Charles Fritts installed the world’s first solar panel on his New York City rooftop in 1884, the streets below were still teaming with horses and buggies. Although remarkable, Fritts’s gizmo didn’t produce much power. Only 1% of the sunlight falling on those selenium cells was converted into electricity. Barely enough to power Thomas Edison’s new-fangled invention—the lightbulb. So, it’s no wonder that solar power languished beside far cheaper, exponentially more efficient fossil-fuel energy. It wasn’t until late 1950s when Bell Labs invented silicon cells for NASA that solar cells crept up to 6% efficiency. As concerns about global climate change escalated in the 1990s, solar energy found new purpose. With investments in research and development, today’s solar panels can convert more than 20% of the sun’s rays into useable electricity and are 90% less expensive than those sold a decade ago.

Some Solar Empowering Readings 

Learn more about the pros and cons of powering your home with solar energy by visiting these pages: 

Solar Estimate 

Resource for calculating if solar energy is cost effective in your area of Minnesota. 

Homeowners Guide to Going Solar 

Fact-filled overview from the U.S. Office of Energy Efficiency and Renewable Energy. 

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April 2021 Housing Report

By MNR News posted 05-11-2021

Rise in new listings can’t match demand and plummeting supply

Closed sales were up +10.9% over last April as pending sales soared +32.0%, and new listings surged +18.2%, according to Minnesota Realtors® (MNR), the membership organization supporting all 22,000 Realtors in the state. But the rapidly heating market was tempered by the widening gap between buyer demand and available inventory. With just a one-month supply of housing inventory available, the number of homes for sale dropped 51.7% from 17,634 homes in April 2020 to only 8,519 homes this April. The median sales price hit $305,000, a +10.9% increase over last April, and days on market shriveled -25.0% as multiple offers on properties became the norm. On average, properties were selling for +102.1% of the original price, a 3.3% bump over 2020.

“The year-over-year growth is impressive given where we were last year with the pandemic shutting down activity and creating uncertainty in the market. With so many pending sales in the pipeline, Realtors are racing to keep up with what promises to be a record-breaking season,” said Chris Galler, CEO of Minnesota Realtors. “The ongoing inventory shortage is pushing values to unreachable heights and pricing many—especially first-time homebuyers— out of the market. As an industry, we need to expand ownership opportunities by making down payment assistance more readily available and lobbying for sensible regulations that allow developers to build more affordable housing stock. It would be a big win for those who so desperately want homes and an even bigger win for real estate and Minnesota’s entire economy.”

April year-over-year summary:

  • Closed sales: +10.9% to 7,060
  • Median sales price: +10.9% to $305,00
  • Average sales price: +12.8% to $345,412
  • New listings: +18.2% to 10,333
  • Pending sales: +32.0% to 8,897
  • Days on the market: -25.0% to 36 days
  • Homes for sale: -51.7% to 8,519


Closed Home Sales Across Minnesota by Region

Eleven of the state’s 13 regions saw increases in closed sales compared to April 2020, with eight of those regions hitting double-digit growth. Two regions marking declines: Southwest Central with -.9% and Northwest slipping -6.9%. See the chart below for more details comparing April 2021 to April 2020.

map of Minnesota

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on which MAR & SPAAR local associations report.

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Building Home Equity

The actual share of your property you actually own, better known as equity, is a financial benefit to any homeowner. It means more profit when it’s time to sell or it can offer you cash when you need it. This can be done either through a refinance or home equity loan.

Fortunately, building equity can be easy. Every month you increase your home equity by making your mortgage payment.

If you want to build your equity even further, there are several ways to do it, including:

  • Buying in an up-and-coming market. If home values in your neighborhood start to rise, so will your property value. That can mean more equity, too.
  • Increasing your down payment. The more you put down, the less your lender will need to loan you, and the larger your equity stake will be.
  • Paying more on your mortgage. Putting extra toward your mortgage loan — either each month or a few times a year — can help you pay down your balance and increase your share. Consider putting your annual tax refund toward your loan to really make a dent.
  • Renovating your home. Anything that improves your home’s value also increases your equity. Choose your projects wisely, and reach out if you need some help getting started.
  • Refinancing your loan. With a short-term loan, like a 15-year, you can pay down your balance faster (and sometimes get a lower rate as well). This can help you build equity more quickly.

Do you have questions about home equity? Or are you planning to buy or sell property this year? Reach out today.