By David Garves, Associate Broker
Most of my blog here and at MapleGroveRealEstateInfo.com is simply a vehicle to share local data and statistics to current and future home owners as well as owners considering the sale of their property in Maple Grove. It's purely numbers and light analysis of what those numbers are telling us about the market place of Maple Grove Real Estate. Occasionally though, and often near the beginning of Football season, and during March Madness I get the bug to prognosticate the market and offer some predictions. I'm tempted to use the data as an indicator of what the future holds for the market. Below are 4 predictions of what the very near future has in store for the Maple Grove Real Estate market.
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Foreclosures & Bank Owned Properties (REO) - When home owners fail to make payments on their home, the mortgage lender typically forecloses on the property through "sheriff sale" in the state of Minnesota. Following a sheriff sale, the home owner has up to 6 months to redeem the property, or pay what's past due to keep the property. If this isn't done (and in most cases it's not) the owner looses that property to the mortgage company who then places it up for sale as a bank owned home. Sheriff sales then, are a great indicator of what's coming to market for bank owned properties in the next 6 months. With Sheriff sales dropping 30% year over year since 2011, the amount of distressed priced properties coming onto the market in Maple Grove have dropped and should continue to their decreasing numbers. While January 2013 numbers indicate an increase in the next 30 days of bank owned property onto the market, the following months should only provide a few homes. The drop in Bank Owned property together with the rise in traditional listings is a good indication that the strengthening of the market could easily continue into 2014.
PREDICTION - A Temporary bump up in REO listings in late summer followed by LESS Bank Owned properties coming to the market following the short term bump!
Find out what's happening in Maple Grovefor free with the latest updates from Patch.
< SEE CHART: MG SHERIFF SALE >
FINANCING TYPES IN MAPLE GROVE - While FHA still creates a little easier option for home buyers, the increased mortgage insurance on FHA loans has seemed to motivate buyers into using more conventional financing in Maple Grove. The increased use of conventional financing may also be the result of more "move up" buyers who finally have some equity in the sale of their home to purchase the new home. Whichever reason, the use of conventional financing shows both strength from the buyers coming into Maple Grove as well as strength of quality in the homes being sold. New rules coming out in 2014 thanks to our friends at "Dodd-Frank" will most likely influence the market, but have little effect on the financing in Maple Grove.
PREDICTION: - MORE buyers using conventional financing, and fewers buyers needing FHA financing will help home seller flexibility!
< SEE CHART: MG LOAN TYPES >
NEW CONSTRUCTION - Although most of Maple Grove new development has moved west, there's lots to look at in the old gravel mines along Weaver Lake Road (85th) to the East also. Despite plenty of development however, the new construction listings have dropped in Maple Grove consecutively over the last two years as developer move cautiously and slowly, having learned their lessons back in 2005/2006. Prices of closed homes have continued to increase with the rest of the market, with average price per finished sq. foot about 30% higher than previously owned homes. With that type of premium, it's no surprise that New Development communities continue to try and grow into Maple Grove.
PREDICTION - MORE New Construction as developers move slowly to create new communities in Maple Grove.
< SEE CHART: MG NEW CONSTRUCTION >
MISSED OPPORTUNITY. An entire generation of home buyers have seen little more than decreasing rates from 7% all the way down to 4% or better, while also experiencing less expensive home prices year over year for the last 7 years. Radio adds sighting "lowest rates ever", and news report of falling home prices had become common since 2006, however for the first time, many home buyers have noticed a change. The Summer of 2013 brought both higher prices and also higher interest rates forcing some buyers to re-evaluate what they can afford. Something home buyers haven't felt for nearly a decade is the idea of missing out on a market place they had been approved to purchase in only to find out that after waiting, they no longer can qualify for those homes. Buyers who have waited to see what happens in the market have been rewarded for a number of years, but the strengthening of the market could cause problems for a growing number of buyers losing out on an opportunity to buy into their desired market.
PREDICTION - MORE buyers than we've seen in years will be priced out of their market due to rising rates or increased home prices, while they "wait to see what's happening in the market".
< SEE CHART: MG PRICE - INT RATE >
As school supplies fly off the shelves at Target and Walmart, Hunters begin getting their deer stands out, and State Fair goers try everything from olives, to chocolate covered bacon to deep fried candy bars on a stick one prediction is clear - Summer is coming to an end and with it "buying season" will soon follow. It's been a strong year for the Maple Grove Real Estate market with lots of data coming up to predict if Spring 2014 will be as busy and as strong as 2013. With market data like we've seen though, it looks like there's more positive information ahead.
David J. Garves
www.maplegroverealestateinfo.com
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