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December 2018

MN Real Estate

Minnesota Real Estate: C4D’s 2019 Outlook

 1000 500 Sam Radbil
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Minnesota real estate has been strong in 2018.

Bigger metropolitan areas like Minneapolis-St. Paul have seen months where the median number of days on the market for typical homes was only 47. And check out these stats from the Minneapolis Area Realtor’s Association:

Minnesota Real Estate

  • New Listings increased 9.5% to 702
  • Pending Sales decreased 6.7% to 723
  • Inventory increased 1.0% to 9,487
  • Median Sales Price increased 8.2% to $265,000
  • Days on Market decreased 7.1% to 52
  • Percent of Original List Price Received decreased 0.1% to 97.3%
  • Months’ Supply of Homes for Sale increased 10.5% to 2.1

Median Sales Price Prior Year Percent Change

The trend is neatly summarized by this simple report about Minnesota real estate:

  • December 2017: $248,000 – $226,000 (+9.7%)
  • January 2018: $244,000 – $222,500 (+9.7%)
  • February 2018: $250,000 – $221,650 (+12.8%)
  • March 2018: $258,100 – $235,000 (+9.8%)
  • April 2018: $267,000 – $245,000 (+9.0%)
  • May 2018: $271,000 – $250,000 (+8.4%)
  • June 2018: $270,500 – $257,250 (+5.2%)
  • July 2018: $268,000 – $251,500 (+6.6%)
  • August 2018: $268,000 – $252,000 (+6.3%)
  • September 2018: $262,000 – $247,000 (+6.1%)
  • October 2018: $265,000 – $244,000 (+8.6%)
  • November 2018: $265,150 – $245,000 (+8.2%)
  • 12-Month Median: $264,100 – $245,000 (+7.8%)

As you can see, Minnesota real estate prices have climbed steadily, and are continuing to do so.

Positive 2019 Factors in Minnesota Real Estate

First, let’s look at the 2019 factors that may keep this real estate train running. The price of oil took a serious tumble in late 2018 to a present-day value of only approximately $45 per barrel; oil prices ripple through the U.S. economy and affect many sectors.

Minnesota Real Estate Factors

  • Jet fuel prices will be cheap and that will help airlines make more money without ticket price increases.
  • Gasoline and winter heating oil prices have declined with gas falling below $2.00 per gallon in many parts of the country.
  • Anything made with petroleum like plastics will be cheaper to produce.

These trends mean stable prices and more money in the pockets of Americans. This is turn strengthens the economy as a healthy consumer sector makes the chance of a recession less likely in 2019.

Employment

The unemployment rate is nationally at record lows, and at what is considered full employment, wages start to increase, and that also leads to greater consumer spending power.

All of these factors mean consumers will be in better shape, will have better credit scores (you can still buy with bad credit!), and will be ready to buy more homes.

Minnesota Real Estate Negatives

Two main problem areas are rising interest rates and stock market volatility. The Fed, concerned that the strong economy will overheat has been steadily raising interest rates from zero to a more “normal” level. This has caused mortgage rates to cross the psychologically perilous fiver percent mark, and higher mortgage rates may cause some potential buyers to sit on the sidelines.

Also, the recent stock market volatility has many wondering is a recession is indeed on the horizon as stock market declines usually predict a near-term downturn. As you know, a weaker economy will impact housing prices, and at the very least would flatten the market for a while.

Stock Market Chart 2018

So, our prognostication for 2019? We feel that if the economy even chugs along at a slower pace, housing prices will continue their increase. If a recession occurs, we really don’t see homes losing much value, but instead feel that things may just level off for a while.

6 Tips for Realtors to Boost Your Social Media Presence

 1000 500 Sam Radbil
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Real estate social media is here to stay, and true professionals need to know how to make it work for them.

Real Estate Social Media

The days are gone when Realtors could put all of their listings on MLS, send out a newsletter, hand out cards and wait for the business to roll in. The pre-2020 real estate buyer or seller uses real estate social media to find agents and properties, and you need to know how navigate that area. Following are six ways you can use real estate social media to your advantage:

Real Estate Social Media: Instagram

According to Meiggs, it’s key for Realtors to grow more Instagram followers and post photos regularly. This is important!

Real Estate instagram

New listings, sold homes, before and after pics of landscaping you suggested that improved curb appeal and resulted in a sale and even just holiday greetings will help generate buzz about you and your company. So, remember, growing your Instagram followers can be a huge help for your business.

What About Facebook?

You need to be there, your company needs to be there, and when you engineer sales you need to post that good news there also.

Real estate social media facebook

Facebook is like social media marketing 101, and you need to be fluent on this platform. Understand how to post, how to drive traffic to your pages, and how to advertise if you have the cash to do it.

Are You Using Twitter?

The current U.S. president certainly understands the power of Twitter as he can instantly reach millions of followers.

Real estate twitter

As you gain followers, your new listings can be sent as soon as you have signed the client, and that’s a lot of quick and free advertising for you.

LinkedIn is Hugely Important

You will be vetted by prospective clients, and a lot of them will search for your LinkedIn page.

If you don’t have one, your credibility will take an instant nosedive. Furthermore, your LinkedIn site—which some call Facebook for business—needs to be current and updated regularly. A stale LinkedIn page can almost be worse than not having one at all.

Be Hands-on with Real Estate Social Media

While you may not always embrace DIY, if you are able to do you own social media marketing, you can quickly disseminate information that will benefit your business. New listings, properties under contract, and completed sales can be acknowledged as they happen.

If you don’t feel comfortable managing your own social media accounts, look carefully for someone that will move quickly and handle the job efficiently.

Sending a Newsletter?

real estate newsletter

Our last tip is a bit old-school, but a monthly newsletter can provide clients and those on your mailing list with lots of great info about the local real estate market.

Newsletters are a great addition to real estate social media platforms and you will find many clients that look for your monthly newsletter with great anticipation. You can use email or snail-mail for this.

As you know, getting the offer is one thing and seeing a deal through financing is another.

With mortgage interest rates nearing the formidable five percent range, you may have clients that just can’t qualify for a conventional mortgage loan. If this happens, be sure to contact us at C4D. We are the MN contract for deed experts and we find a way to get difficult deals done. Don’t let any deal die without contacting us first.

Life After Bankruptcy

Life After Bankruptcy: 6 Ways to Get Back on Track

 1000 500 Sam Radbil
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Bankruptcy used to be considered the financial death penalty, but times have changed. While many people worry about life after bankruptcy, the future after filing Chapter 7 is not necessarily bleak.

Life After BankruptcyBankruptcy – What Is It?

There are two types of commonly filed individual bankruptcies—Chapter 7 and Chapter 13. Chapter 7 is a liquidation process where certain assets are given to a trustee that sells them in order to pay off creditors.

Chapter 13 was designed for those that wish to pay their debts but need time. A person that files for Chapter 13 bankruptcy works out a plan to make monthly payments to a trustee; the trustee then makes payments to creditors for a three or five-year period. After that time has passes and all payments have been made, certain remaining debt amounts may be cancelled.

Credit Score After Chapter 7

Credit Score after Bankruptcy

The better your credit score is, the more your credit score will decline. Credit scores average around 540 after bankruptcy, so if yours was 750, it will fall a lot further than if it was at 640 before bankruptcy. The good news is that many debts will be discharged—taxes, student loans, child support and some others won’t go away—and you will be able to start fresh. If you are still employed, or if you get a new job, your monthly expenses will be less, and you may even be able to start saving money, especially if you’re bringing in some money through passive income ideas.

Get a Secured Credit Card

If you declare Chapter 7, all of your credit cards may be cancelled regardless of their balances. Soon after your bankruptcy has been discharged, however, you will receive secured credit card offers. Put $500 in a secured account, and you will be rewarded with $500 of fresh credit.

*Note: although it might not be a ton of money, you can also check out using some apps that pay. You never know what a few extra dollars can do for a bank account each month.

You Still Have a Debit Card

Even if you have to open a new bank account, you can get a debit card. You can use it virtually anywhere you can use a credit card, so if you need to buy a plane ticket, you will be able to. Before debit cards became popular, people did have issues paying for items that required a card number, but that’s no longer the case.

You Can Even Get a Car

If you have file for Chapter 7 bankruptcy you cannot file again for eight years. Since you can’t file, you are actually somewhat of a better credit risk, and as time passes you will actually be able to borrow normally for items like appliances and autos.

Think Cosigner

FICO Score

If you have immediate financial needs and you have to borrow, try to get a cosigner. That person will be absolutely responsible for your debt, but if you make all of the payments on time, there will be no harm to the cosigner.

Life After Bankruptcy: Go Back to School

If you haven’t availed yourself of the Federal Student Loan program, you can go to a post-secondary institution for a bachelor or master’s degree or you could even go to law school or enter a PhD program. Federal student loans are available for all citizens—unless you are a drug offender—and there is no credit check required. If you take six credits at a major university, you can have all of your tuition paid and even receive some extra money you can use for expenses.

Back to School

Yes, there is life after bankruptcy. Borrowing for a home will be more difficult, but the financing pros at C4D can help with these types of issues. Be sure to contact us for more information.

7 Things New Homeowners Waste Money On

 1000 500 Sam Radbil
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Becoming new homeowners can mean a blur of expenses, but it’s really important to think about what you are spending money on so that you don’t make wasteful decisions, especially if you need money now. 

Here are seven things to consider:

Ditch the Lawn Service

Lawn Service for New Homeowners

New homeowners may think that they don’t have time for yard maintenance, but you can be assured that lawn services don’t do anything different that you could do. The same fertilizers they use are available at garden centers, and services like aeration are just not absolutely necessary. Garden centers will also give you free advice and will walk you through any lawn issues you have. Furthermore, they have the most professional equipment, like riding lawn tractor, it’s very expensive if you buy yourself.

Forget About the Pool

Pool for New Homeowners

If you buy a home with a pool, you have bought a place with lots of monthly maintenance needs. Every time the pool guy comes out, you will incur costs for cleaning, maintenance and pool chemicals. To be safe, your pool has to be regularly tested for proper chlorine levels, and don’t forget about the cost of water that can be very significant in dry southwestern states. While robotic pool cleaners are worth the money long term, the initial price range can set people off, so be sure to do your research first!

No Sun Room

Thinking of adding a sun room? Well think again, because even though new homeowners may hope to recoup their original sunroom investment, studies have shown that unlike kitchens or bathrooms, the addition of a sunroom very rarely even comes close to paying for itself.

Back Up Generator

New Homeowner Energy

ENERGY GENERATION BY SOURCE

A good one can cost thousands of dollars if you live in a non-hurricane prone area, so just trust the grid. And if you’re worried about losing a lot of frozen food, many freezers and homeowners’ insurance policies already protect against this occurrence.

Private Mortgage Insurance

If you don’t have 25 percent equity in your home, you may need to buy Private Mortgage Insurance or PMI. This can easily cost new homeowners up to $200 per month or more in premiums, and new homeowners never recoup this cost. If there is some way you can find a 25 percent down payment, by all means put that bigger amount down to avoid paying PMI. If you have been in your home for a while, a hot market may have increased your property’s value, and you can apply to have your PMI removed. Check with your lender about this.

Cheap Windows for New Homeowners

If you need new windows, don’t but cheap ones, because your HVAC costs will just increase. Spend more for a better product and your investment will pay off immediately.

New Homeowners & Extended Warranties

Insurance

According to our friends at BeerMoney, “Retailers are not going to sell anything that doesn’t make them money, and when they sell you an extended warranty they are getting extra revenue from you. For example, you purchase a $32 string trimmer.” The extended warranty is $8.00 per year. Sounds good, but after four years, you have doubled the cost of your garden tool. We suggest not paying anything extra, and just buying a new $32 trimmer when and if it breaks.

Also, there may be a convoluted and difficult repair process that could cause you to be trimmer-less for a period of time if you go the warranty route.

We’re really happy you are in your new home. Now, just be sure to carefully consider all of your home-related purchases so you don’t waste precious cash. And don’t forget, if you need to grab a few extra dollars, you can always sell things you currently own, such as totaled cars, old technology and other stuff laying around at home.

Good luck!