Real Estate | Appraisal Service
Magnificent view! Lake Vermilion road access 2+ bedroom three season cabin with gorgeous island views! Featuring large deck only 40 ft from the remote south-facing shoreline, large master bedroom with stunning view, two-stall garage, gradually sloping lot with 102 ft of shoreline, fireplace, 2 acres of towering pines and unique outcroppings, large screen porch, fisherman’s playhouse, large storage areas, and L-shaped dock to catch your limit of walleye!
May Prices Reached Record Highs
U.S. prices surged to an all-time high and homes sold faster than they ever have in May, according to a new report released by realtor.com®. Home prices averaged $297,000 in May, and homes sold in just 55 days.
Despite recent upticks, however, the market is showing a few signs of slowing momentum, according to the report.
“We’re in the thick of the hottest homebuying season of all time,” says Javier Vivas, director of economic research at realtor.com®. “The pace of U.S. home sales has officially reached a seasonal and historical high, but we’re also beginning to see slight signs of deceleration.”
More listings are coming onto the market, which may offer some hope to frustrated home buyers who have faced limited choices, Vivas says. The inventory of homes for sale rose 6 percent in May compared to April.
“Even as inventory recovers, the mix of what’s available versus what shoppers are looking for could become an even more pronounced mismatch,” he says. “Total listing volume remains highly dependent on new construction, much of which is still out of the price range of first-time buyers—the largest segment of buyers.”
Rising home prices also show few signs of slowing. “Unfortunately for buyers, median list prices continue to show strong yearly growth and fail to hint that home values will stall any time soon,” Vivas says.
Source: Move Inc.
Daily Real Estate News | Thursday, May 31, 2018
This is a truly remarkable home! Beautifully updated and carefully maintained! Includes: 4 bedrooms; 1.5 Bathrooms; very spacious living room, dining room, and kitchen; den/sun room; bonus room and large hallway closet on upper level; poured, dry basement; 2 stall insulated heated/cooled finished garage w/ workshop area; new 1 stall garage with yard and alley access; and a beautiful large empty lot next door! Other features include: new furnace, sidewalks, garage openers and steel roofs on both garages! A very special property!
Motivated seller! This updated home is well maintained & move in ready! 3 bedrooms / 2 full bathrooms / Updated appliances / Fully finished basement with family room & 2 bonus rooms / Private back yard w/ fire pit & 220 amp receptacles interior and exterior / 2.5 stall garage w/ 8 ft door – insulated & heated – & wired for 220 amp / Steel siding / New roof & gas furnace in 2017 / Concrete pad for off-street parking w/ 30 amp receptacle. Located in beautiful Buhl, w/ open enrollment & bus transportation for Hibbing, Chisholm & Mt. Iron/Buhl schools. A must see!
3 Questions Clients Should Ask Before Buying a Vacation Rental
If you have buyers interested in purchasing a vacation property as an investment and for extra cash flow, now is a great time, according to finance expert Rob Stephens, co-founder and general manager of Avalara MyLodgeTax, a tax solutions provider. Sites like Airbnb and HomeAway have contributed to the explosive growth in the number of travelers seeking to rent private homes for comfort, privacy, and sometimes lower costs.
“There’s no question that the vacation rental business is booming,” Stephens says. The short-term rental market in the United States alone is approaching $18 billion in revenue, with a projected annual growth rate of 6.6 percent, he says.
However, before your buyers decide to take on a short-term rental, Stephens advises that you pass on these three questions to help ensure their success:
1. Is a vacation rental a smart investment for you? Buying a vacation property can certainly be exciting, especially if it’s in a destination where the buyers love to spend time themselves. However, your clients need to be confident that they can cover all the costs involved. In addition to the transaction costs, make sure they understand what it will take to operate the rental. Do your clients plan to manage the property themselves or hire a professional (possibly you)? A vacation rental only generates income when it’s occupied, so your client needs to figure out how many renters they need each month and how much to charge to cover the cost of the property, and then decide whether it’s realistic or not.
Beyond the Mortgage: Explore Ownership Expenses With Investors
2. What are the laws governing short-term rentals in the community? Before you put in that offer on behalf of your investor clients, make sure the community or homeowners association allow short-term rentals. “Many communities prohibit owners from renting out their homes for fewer than 30 days,” Stephens says. Even some cities and states are starting to impose regulations on vacation rentals, he adds. Help your clients investigate short-term rental laws and regulations, including fines and other penalties if the property doesn’t comply. Call the HOA property management company, visit the city hall website, and have conversations with local agents who also handle vacation rentals.
3. Which taxes and fees are you required to collect from guests? “Many real estate investors overlook the fact that lodging or occupancy taxes need to be paid in order to rent the home in compliance with city and state tax agencies,” Stephens says. State and local lodging taxes vary widely, and can change with little notice, Stephens says. Your buyers need a lodging tax compliance tool or software if they’re planning to handle the rental themselves. “The right tool will offer a full range of solutions, including determining the vacation rental taxes and reporting requirements as well as calculating and filing returns on a monthly or quarterly basis,” Stephens says.
Source: Rob Stephens, Avalara MyLodgeTax
Daily Real Estate News | Friday, May 25, 2018
Spike in Rates Dampens Loan Applications
A rise in interest rates last week may have prompted would-be refinancers and home buyers to pause. Mortgage applications—for both refinancings and home purchases—dropped 2.6 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. Mortgage volume is now 10.5 percent lower than a year ago.
The 30-year fixed-rate mortgage rose to its highest level since April 2011 last week—a 4.86 percent average, MBA reports. The higher rates gave homeowners less incentive to refinance. Refinance volume dropped another 4 percent last week and is now at the lowest level since December 2000. Refinance applications are 27 percent lower than a year ago.
That’s caused lenders to put more weight behind their home-purchase business, but the higher rates—mixed with a severe shortage of homes for sale—appear to be limiting the buyer pool there, too. Mortgage applications to purchase a home dropped 2 percent for the week. However, volume is still 3 percent higher than a year ago.
“Purchase applications decreased over the week, while the average loan amount for purchase loans increased to over $320,000 after averaging around $317,000 for the past four weeks—likely a sign that inventory for lower-priced homes remains low and the mix is still skewed toward larger loan balances,” says Joel Kan, an MBA economist.
Source: “Weekly Mortgage Refinances Drop to an 18-Year Low as Rates Jump,” CNBC (May 23, 2018)
Daily Real Estate News | Wednesday, May 23, 2018
Perfect fixer upper near Greenhaven school! Efficient use of space / 3 bedrooms / 1.5 bathrooms / Bonus room in basement / Hardwood floors in all 3 bedrooms / Partial bathroom in basement / Affordably priced! Would make a great rental property. Sold as-is, most items in house are available to buyer. Great opportunity with lots of potential!
This is a truly remarkable home! Beautifully updated and carefully maintained! Includes: 4 bedrooms; 1.5 Bathrooms; very spacious living room, dining room, and kitchen; den/sun room; bonus room and large hallway closet on upper level; poured, dry basement; 2 stall insulated heated/cooled finished garage w/ workshop area; new 1 stall garage with yard and alley access; and a beautiful large empty lot next door! Other features include: new furnace, sidewalks, garage openers and steel roofs on both garages! A very special property!
Did Buyers Just Miss Their Final Chance for Low Rates?
Mortgage rates are edging noticeably higher this week, and would-be home buyers and refinancing homeowners may have missed out on a chance to lock in a lower rate.
Mortgage application volume for refinancings and home purchases dropped 2.7 percent last week on a seasonally adjusted week-to-week basis, the Mortgage Bankers Association reported Wednesday. Mortgage application volume is 4.5 percent lower than the same week a year ago.
Applications for refinancings posted the biggest drop last week. Volume plunged 4 percent to the lowest level since August 2008. Refinancing applications tend to be more rate sensitive than applications for home purchases. Refinancing applications are nearly 17 percent lower than a year ago when interest rates were much lower.
Mortgage applications to buy a home dropped 2 percent last week, but volume remains 4 percent higher than a year ago.
The 30-year fixed-rate mortgage dropped to 4.77 percent last week, the MBA reports. But on Tuesday, interest rates jumped to a seven-year high, following a major sell-off in the bond market, CNBC reports. The average 30-year fixed-rate averaged 4.875 percent for the highest creditworthy borrowers and 5 percent for the average borrower, according to Mortgage News Daily.
More buyers are turning to adjustable-rate mortgages, which offer lower introductory rates for a set period before rising. But ARMs are on the rise too. “Jumbo and 5/1 ARM rates increased, with the 5/1 ARM rate increasing to its highest in our survey at 4.09 percent,” says Joel Kan, an MBA economist.
“Homebuyer demand has remained positive and shaken off the higher rate environment so far this year,” says Sam Khater, Freddie Mac’s chief economist. “However, after years of very low mortgage rates, the symbolic risk of a 5 percent mortgage, on top of higher gas prices, may cause a slowdown in homebuyer demand, particularly in western states and exurbs that are affected more by gas prices than the typical consumer.”
Source: “Weekly Mortgage Applications Fall 2.7% Even Before Rates Spike,” CNBC (May 16, 2018) and “Mortgage Rates Are Surging to the Highest Level in 7 Years,” CNBC (May 15, 2018)
Daily Real Estate News | Wednesday, May 16, 2018
What Makes Homeowners Tackle a Remodel
The chief reasons homeowners undergo a remodel are because they desire better and newer amenities or they feel compelled to repair or replace old components in their home, according to the National Association of Home Builders’ Remodeling Market Index. These two reasons have tended to drive most remodels in recent years, but other reasons are growing in popularity among homeowners.
Remodeling Impact: Which Remodel Projects Offer the Biggest Paybacks
Notably, three reasons to remodel are on the upswing: a “desire and need for more space,” “wanting to avoid moving/buying another home,” and “desire to be able to age in place.”
“An increased desire to avoid moving to another residence could in part be a reason to higher construction costs for new homes and a low inventory of existing homes available on the market,” the NAHB notes on its blog, Eye on Housing, in reporting the survey’s findings. “The uptick in aging in place is not entirely surprising, given the ongoing growth in the nation’s older population.”
The chart below reveals homeowners’ top reasons for remodeling:
Source: “Aging in Place on the Rise as a Reason to Remodel,” National Association of Home Builders’ Eye on Housing blog (May 15, 2018)
Daily Real Estate News | Wednesday, May 16, 2018
Perrella & Associates
1932 E 2nd Ave
Hibbing, MN 55746
Phone: 218-262-5582
Fax: 218-262-5584
