10 Signs of Hope in this Real Estate Market

1.  HOUSING AFFORDABILITY    It is currently 241 in Minnesota which is 13% higher than last year. Here is what this index means (reprinted from the National Association of Realtors):

To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.

The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly P&I payment cannot exceed 25 percent of a the median family monthly income.

2.  MARKET SHARE  Edina Realty has gained market share in all categories.

3.  APPOINTMENTS TO SALE  People are looking at fewer properties before buying. 19 today which is down from 23 eighteen months ago.

4.  PRICING STABILITY  Pricing stability will hit 75 % of the metro markets by the end of 2011. The Twin Cities is among those that will join the ranks of stability by year end. San Francisco, San Diego and Washington DC have already stabilized.

5.  NEW CONSTRUCTION RATES  is higher in the Twin Cities than in other parts of the country. The majority of permits are for single family residents from one year ago vs. multi family.

6.  FORECLOSURE FILINGS DOWN  Realty Trac shows that filings have decreased 18% compared to the first quarter of 2010.

7.  SHADOW INVENTORY  (Properties that have delinquencies buy not yet in foreclosure) have been on the decline since last August.

8.  NATIONAL ECONOMY IS IMPROVING  GDP is on a slow and steady increase.

9.  TWIN CITIES IS RATED ONE OF THE NATION'S TOP JOB MARKETS  It is ranked fourth behind Washington DC, Boston and Austin (January Forbes) and outperforms the rest of the country.

10. All of the above factors show that there is no better environment in the country than the Twin Cities to take off more quickly as the economy stabilizes.
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