My team and I have begun to notice that many first time buyer homes are now selling in multiple offers!  In fact multiple-multiple offers - one bank owned (REO listing) had 11 offers!  If the property is move in ready and is priced way below the other active listings - it sells fast!  Banks have been getting wiser to have their inventory of homes in better condition and have them priced correctly out the door!  Fannie Mae, a lender that The John Schuster Group, with Coldwell Banker Burnet, represents in the Minneapolis and St. Paul area, has stringent requirements for how their properties must look.  The goal is for the foreclosure not to look like a foreclosure!  Our inventory has been drying up in the Twin Cities:

http://online.wsj.com/article/SB124044612611045827.html

One might think that we are nearing the bottom because the foreclosure inventory is drying up.  One would be wrong to think that!  All of the big banks and mortgage holding companies (including Fannie Mae and Freddie Mac) have had a moratorium on foreclosures from mid-November, 2008 to April 1, 2009.  They are all so backloged with 5+ months of defaults (on properties that were not foreclosed on during the moratorium), plus new defaults that a tsunami to reo’s are-a-coming!

Expect a high number of sheriff-sales in the next couple of month, then a cure time of 2-6/months for redemption (depending on if the property is abandoned), then about another month of time for cleaning and market evaluations (BPO, Broker Price Opinion and an appraisal) and then it his the market.  I predict we will have a flood of new REO’s mid-fall 2009.

http://online.wsj.com/article/SB123975395670518941.html?mod=googlenews_wsj

-Year to day (4/26/09) John Schuster and his team have sold over 68 properties in 2009, many of them being “bank owned foreclosures”. Schuster and his team have sold foreclosure homes, town homes and condos this year in Minneapolis, St. Paul, New Hope, Maple Grove, Savage, South St.Paul, North St. Paul, Maplewood, White Bear Lake, Woodbury, Bloomington and Uptown. You can follow John Schuster on Twitter @ Twitter@jdschuster

For the past 6 years, I have advised my clients to use Tim Walz with Suburban Home Inspections.  Walz offer thermal scanning for buyers during their inspection.  Thermal scanning can “see behind the wall” and expose preexisting damage or issue that might get passed up on a normal buyers inspection.  Walz / Suburban Home Inspections has recently done inspections for my clients in St. Paul, Minneapolis, Savage, Eden Prairie, Bloomington, SW Minneapolis and other cities throughout the Twin Cities.  When you buy a bank owned home you are buying AS-IS.  Know what your getting into or don’t buy the home.  Thermal Scanning cost a bit more than the normal buyers inspection, but it is well worth it.  See the results of some of Tim’s famous Thermal Scanning finds @

http://www.homeinvestigator.com/ThermalImageScanning

City of St Paul, MN Code Compliance Report Category 1, category 2, category 3 THINGS BUYERS MUST KNOW

Are you thinking of buying a vacant home or property in St. Paul, Minnesota (MN)? Have you checked to see if this foreclosure / bank owned home is on the City of St. Paul VACANT BUILDING list?  If you haven’t your going to wish you had.  Linked above is a PDF explaining the difference between CATEGORY 1 - CATEGORY 2 - CATEGORY 3 vacant buildings.  Let’s just say category 1 is not so bad,  category 3 may require a bulldozer!  Check out this story from the Star Tribune about this issue http://www.startribune.com/opinion/editorials/39751872.html?elr=KArksc8P:Pc:UthPacyPE7iUiacyKUnciaec8O7EyUr

The city says - we want our housing supply cleaned up!  With the ever growing supply of vacant buildings on the City of St. Paul’s hands, they decided to to take a troubled situation and take a long vision approach.  The fact is, if a home sits vacant and uncared for for too long it moves up the ladder from vacant - category 1 (no problem, just do an ordinary Truth - In - Housing report) http://www.ci.stpaul.mn.us/index.asp?NID=1085

But, once it goes to category 2 or 3 -  Buyer be very aware!  That simple Ikea flip might turn into a hellish nightmare! Although some neighborhoods are fighting back! Dayton’s Bluff and the Hillcrest area have been holding tours of vacant homes to help get them sold! Check of this story from Fox 9 - KMSP http://www.myfoxtwincities.com/dpp/news/St_Paul_Vacant_House_Tour_Entices_Buyers_with_Strong_Community_Low_Prices

The real deal is that you need a qualified, foreclosure knowledgeable Realtor to help you purchase bank owned / vacant homes in the City of ST. Paul.  John Schuster with Coldwell Banker Burnet is one of the Top Agents in St Paul  and Minneapolis area.  He sold over 100 homes in 2008 and he knows how to work with the banks to get you a fabulous deal.  If you should be thinking of purchasing a foreclosure anywhere in the Twin Cities area contact John Schuster @ jdschuster@cbburnet.com 612-924-7140

FROM MSNBC.COM

“We’ve all heard so much bad economic news, many folks are afraid to buy homes. But those in the real estate industry say, this could actually be a great time to buy. 8 thousand dollars. That’s how much the feds are waving in the faces of first time home buyers. It’s part of an incentive to encourage home buying and stimulate the economy.” http://www.msnbc.msn.com/id/29537044/

This tax credit for first time buyers (10% of the homes value up to $8k total credit) is great news for the housing market.  In the Twin Cities / Minneapolis / St. Paul area - there are a ton of first time buyer homes available and now a glut of move-up and upper-bracket homes.  The buyer to purchase these move up homes doesn’t have the equity in their current home anymore AND they can’t get anyone to buy it.  Not any more!  The good first-time-buyer homes are selling!  Selling so fast, ~25% of my homes listed under $150k are selling in multiple offers! Housing is now affordable and this tax credit is icing on the cake!  This will help the mid and upper bracket only a bit…  Many first time sellers cannot compete with bank owned foreclosures and they cannot sell themselves because they are upside-down in their home OR they would walk with such little money, they would have enough down-payment to move up to the 250-400 bracket.  I predict you will see a bottom come to the first time buyer market mid-2009 and mid-to-upper bracket market will return when the economy FULLY recovers which will be 2-5 years out.  2009 is the year to buy real estate.  John Schuster sold over 100 homes in 2008 and he offices out of the Minneapolis Lakes Office of Coldwell Banker Burnet  www.TwinCitiesListed.com612-924-7140.  John Schuster has a full time team of 5 people and loves to work with both buyers and sellers in this market.

http://www.finance-commerce.com/article.cfm/2009/02/28/Foreclosure-relief-on-way-to-21-Minnesota-counties-cities

“Carter was one of many Minnesota politicians – including two mayors and the state housing commissioner – who gathered at the home, on the corner of Sherburne Avenue and Arundel Street, to announce how $38.3 million in federal dollars will be allocated to 21 cities and counties for rehabilitation and redevelopment of foreclosed homes.

The federal dollars, from the Federal Housing and Economic Recovery Act of 2008, were originally announced in September. At that time, the feds announced nearly $58 million in awards to Minnesota. (Of that $58 million, about $19 million has already been distributed collectively to the cities of Minneapolis and St. Paul and the counties of Hennepin, Dakota and Anoka.)”… from Finance and Commerce 2/27/09 (see link)

Comment by John Schuster - Government money to help to housing crisis?  St. Paul & Minneapolis and Hennepin County, Dakota County and Anoka County need what ever stimulus spark to rev up their housing markets.  A lot of this is a simple supply and demand function - There is an excessive amount of REO Inventory (foreclosures) in the Twin Cities Minnesota area.  That, combined with a tightening credit market - which further reduces the pool of buyers and depresses the prices at which they can purchase - can lead to a downward spiral in a “free market” economy.  Government is the only thing that can fix this thing now.  If we want to have any resemblance of the America we were born into and have grown to love - drastic action needs to be taken.  This government funds noted in this article may be just be a drop in the bucket, but it is a start to correcting our situation.

The buying party continued for the week ending January 14, as there were 731
pending sales in the Twin Cities—up 17.1 percent. Over the last three months,
there have been almost 1,200 more pending sales than there were last year.
During this time period, 60.3 percent of sales were lender-mediated foreclosures
or short sales.

Increased sales means increased absorption of inventory
means less houses for sale. There are approximately 4,000 fewer houses for sale
right now than there were at this time last year, a drop of nearly 14 percent.
New listings remain sluggish as well. The most recent reporting week saw a 9.5
percent year-over-year decline.

This except was from “The Skinny” put out by the Minneapolis Association of Realtors, see copy of Weekly Market Activity Report for the week of February 23, 2009

Is this the sign of a Minneapolis / St. Paul / Twin Cities Housing Rally?  Although many of the sales today are Bank Owned / Bank Mediated (short-sale) listings, the fact that the amount of inventory is decreasing could be a good sign.  The 3-month total of Pending sales in the Twin Cities is up 19.9% than the same period a year ago!  Data from the MLS - Regional Multiple Listing Service shows  a 12-month average of 151 days on the market for a home to sell (6.7% more than a year ago of an average of 141 days).  There are 8.4 homes available per buyer, down from 9.45 a year prior.  What does this mean for a home, condo, townhouse or investment property buyer in the Twin Cities / Minneapolis & St. Paul area - A FABULOUS DEAL!  “I have helped a ton of buyers get a ‘deal of a lifetime’ in the last couple of months”…”It’s now affordable for both first-time buyers and Investors to purchase real estate…my investors can now CASH FLOW on deals I’m finding for them.” States John Schuster a broker with Coldwell Banker Burnet in Minneapolis, MN & www.MNForeclosureProperties.com

Worst, No. 4: Minneapolis, Minn.

Index score: 127

Prices were last this low: April 2002

Month-to-month drop: -4.6%

Year-over-year drop: -18.45%

Deceleration rank: No. 20

http://www.forbes.com/2009/02/24/housing-cities-ten-lifestyle-real-estate_home_prices_slide_18.html?thisSpeed=15000

Forbes.com just released data from S&P/Case-Shiller home-price index, released Feb. 24, 2009.

They state that Minneapolis, MN is the #4 worst housing market in their “10 Best And 10 Worst U.S. Housing Markets”.  Although our real estate market has gone through tremendous stresses in the last year, there is no way we should have even made this list.  We have seen values drop 5-50+% depending on which area of Minneapolis you focus on.  The SW Minneapolis and Lakes area have been able to hold their values much better that North Minneapolis, Phillips and Powderhorn neighborhoods.  The silver lining to declining market values is affordable housing.  First time buyers now have the opportunity to own homes that they can actually afford.  If you are thinking of purchasing a home in Minneapolis or St. Paul or in the Twin Cities metropolitain area, now may be the time.  It is very important to find an agent that know foreclosures / REO properties and regulations in Minneapolis, St. Paul or the municipality in which that home resides.