I’m surprised to hear that a member of the public knows what title insurance IS, so imagine my reaction when I heard someone “got in a fight about title insurance.” A friend is on the Board of Directors of her condominium association and apparently got in quite the dustup with others on the board over whether or not they needed to buy title insurance on parking spaces the association was buying downtown Minneapolis. Luckily, she was in the majority and the association purchased policies for all of the spaces, but some common perceptions and misperceptions about title insurance came up in the “argument.” Dissenting board members argued the following things:
- Title insurance is expensive.
Well, it does cost money – but the price is nothing compared to the expense of defending yourself against a lawsuit, mechanic’s lien or another hostile claim to the ownership of and equity in your property.
- We’re buying five parking spaces, but we only need title insurance on one.
Wrong! These parking spaces are newly-constructed and the chance of mechanic’s liens popping up is higher than on a piece of property that has been built for many years. Also, every owner of each piece of property generally gets named in the types of suits that these new spaces are vulnerable to. If something went wrong, the only space protected would be the one with a policy.
- Title companies only insure things when there is no risk.
Wrong again. I could tell you so many stories….
There’s a reason lenders require title insurance policies – they need to make sure their interests are protected. Home buyers should do the same. Title insurance protects you against things you never imagined would come up. The lady that went to the mat to convince her condo board to buy title insurance was pushing to spend some of the association’s money – but the amount they paid is well worth what they’ll save if there’s a problem. Got questions? The GCS Title team and I are here – call anytime! ~Charlie
Home prices are up again according to the latest figures from CoreLogic. In June, U.S. home prices saw a 5.7% year-over-year increase. Anyone looking for a home in the Twin Cities Metro – whether it’s a first home, a move up or a down-size – has probably experienced the fast pace of the market due in part to low housing inventory. Some of that could be attributed to supply and demand, but CoreLogic’s Chief Economist Frank Nothaft says, “Mortgage rates dipped in June to their lowest level in more than three years, supporting home purchases. Local markets with strong economic growth have generally had stronger home-price growth.”
We did a blog recently explaining how home appreciation outpaced a leading investment index in 2015, and this year looks equally strong. If you have questions about whether or not real estate is a sound investment, now is a great time to talk to a real estate professional about the home you have – or the one you want. A conversation with a loan officer is also a great idea – CoreLogic’s chief economist mentioned interest rates and you should find out what they mean to you. At GCS Title, our team helps home buyers and sellers get to the “closing finish line” – but, we’re here for you at other times as well. What does the housing market news mean to you? We can help you get the answers you need – let’s talk! ~Charlie
Every day, the GCS Title team and I talk with real estate and mortgage professionals. A hot topic lately is “low inventory” in some areas and price ranges. It’s an issue at the national level too according to Zillow – their Chief Economist Dr. Svenja Gudell says, ” There still aren’t enough homes on the market to keep up with the high demand from every type of home buyer. In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer’s selling season’s borders will most likely be blurred again as many buyers are left without homes and will need to keep searching.” With this in mind, it’s a great idea for current homeowners to find out what their properties are worth. CoreLogic reported that home prices grew 6.7% year-over-year nationwide, so you could have more equity than you think.
Homeowners: Have you checked in with a Realtor lately? You may have options you didn’t know you had. We can connect you with great real estate pros who can give you current, accurate information for your home and neighborhood. Get a status report…you may get some big ideas!
Home prices are up again, though not as much as previous months. It’s funny…the real estate and lending industry trades announce things like the 5% year-over-year home appreciation gain noted in the April S&P/Case-Shiller U.S. National Home Price Index cautiously because the April gain was less than the one in March. Here’s where you need to grab the grain of salt: The gain was 5.1% in March – so the “drop” was a whopping .1%. Here’s what the Managing Director and Chairman of the Index Committee at the S&P Dow Jones Indices had to say: “… the greatest threat to U.S. housing may come from across the Atlantic and from the domestic political scene.” While the Brexit vote and the crazy presidential race we’re watching are important, they don’t change the fact that we all need a place to live and the biggest expense most people have each month goes to housing. SO, as industry experts and TV pundits wring their hands in print, on air and online, talk to local industry experts about what’s going on in your neighborhood, city and personal housing scenario. Ask questions…find out how you’re doing personally and if there are any adjustments that you should or could make to protect yourself or advance your goals. Checking in with experienced real estate and mortgage professionals should be part of a regular routine. The news can be really scary, but your local experts are here to interpret markets and events and can give you great advice and peace of mind.
Pretty much everybody wants a pat on the back, but absolutely everybody likes money in their pocket. New home price information doesn’t exactly put money in your pocket – more like in your portfolio. CoreLogic says home prices went up 2.1% between February and March and they’re up 6.7% year over year between March 2015 and 2016. Here’s what CoreLogic’s chief economist Frank Nothaft said:
“Housing helped keep U.S. economic growth afloat in the first quarter of 2016 as residential investment recorded its strongest gain since the end of 2012. Low interest rates and increased home building suggest that housing will continue to be a growth driver.”
To real estate and mortgage professionals, these numbers are encouraging for the market and business. Consumers may take them either way…renters in particular may get nervous and think homeownership is out of their reach before they’ve taken even the most preliminary steps to pursue it. Let’s work together to get the word out that while “timing is everything,” it’s also very individualized. Getting help and guidance from professional Realtors and loan officers will help determine the right time to buy a home and getting into one will help people start building equity. Their pocketbooks will appreciate it. Let’s help them get started! ~ Charlie
I guess you could say MN is physically in the middle of the country, but you might find it surprising to find that it’s in the same position with regard to median rents. Check this out: Nationally, the average rent for a one-bedroom apartment is $1140 and $1300 for a two-bedroom. We’re keeping right up here in Minnesota – the average price for a one-bedroom in the metro area is $1036 and $1438 for a two-bedroom. Year over year, rents are up 2.8% nationwide as of April. Isaac Newton’s famous quote “What goes up must come down” never seems to apply to things that require money coming from your pocket, so it’s doubtful rents will be headed in the opposite direction.
Price, market, interest rate fluctuations and compliance issues make it really hard to publish comparisons between monthly rent and payments on a home. But that shouldn’t stop those of us in the industry from having comparisons on hand between rent and mortgage payments that can be rattled off in conversation with our leads, prospects, strangers and anyone else we come in contact with. The fact that a home can be purchased for the same amount or less than rent often sparks “water cooler conversations” and a lot of questions that we and our Realtor and loan officer partners are happy to answer. Let’s get the buzz going!
On the House
Charlie Lawson – GCS Title
Recent figures from the government might be a bummer for home builders, but they’re keeping a stiff upper lip. There are so many numbers about what’s going on month-over-month and year-over-year, but there’s a couple of quotes from big brains in the industry that I think explain the fact that builder confidence hasn’t wavered much even though reports indicate their progress has hiccupped a little:
“We still expect strong housing demand and low inventory in the market for previously owned homes to lift single-family housing starts, later in the year.” – Genworth Mortgage Insurance Chief Economist Tian Liu
We mentioned tight inventory in some market areas and price ranges in last week’s blog, so Mr. Liu’s assessment seems right on and a good reason for home buyers to check out new construction. The next quote also touches on something we mentioned in last week’s blog – the fact that rates dropped to a three-year low:
“Solid job creation and low mortgage interest rates will sustain continued gains in the single-family housing market in the months ahead.” – National Association of Home Builders Chief Economist Robert Dietz
Whether you’re looking for a brand new home – or just a home that’s brand new to you – the same things are important: Planning and professional help. Anyone thinking of buying a home needs to get a personal consultation regardless of what your timeframe is. Competition for existing homes can be tough, so pre-approval for a mortgage and great representation will help you make the most of what’s available. We work with many experienced professionals and would be glad to refer you to someone who can help. We also have many builder partners, so let us know if we can help! ~Charlie
On the House
Charlie Lawson – GCS Title
Different aspects of the housing market are going in different directions. But the latest “ups and downs” are pretty favorable. RE/Max is out with its latest National Housing Report and it shows we’ve got a healthy market that’s really picking up:
- The U.S. housing market has gone 50 months without a drop in the median sales price
- Home sales jumped 33.4% from February to March – that’s also a 3.6% year-over-year increase
- Forty-four of the 53 metro areas included in the report experienced home price increases
More homes have sold, prices are holding steady and rising in most areas; we’re also finding that the time it takes a home to sell is decreasing:
- March marked the 36th consecutive month where time on market was fewer than 80 days
- The average days on market in March was 71 – down four days from February and seven days year-over-year
As we’re seeing a jump in market activity, we’re simultaneously seeing a crash in mortgage interest rates. We’ve got the lowest interest rates since May 2013 according to the Primary Mortgage Market Survey from guarantor Freddie Mac. This “crash” is a good thing for a lot of people! Lower rates will make it possible for more people to qualify for mortgages and can stimulate buying activity, allowing more homeowners to be able to move up, downsize or move on. One thing to be concerned about is low housing inventory in some housing areas and price ranges; however, your professional real estate and lending professionals can help you be prepared to compete for the home of your dreams in a fast-paced marketplace. Getting pre-approved for a mortgage (and talking to a lender even if you’re not quite ready to buy) and discussing your goals and preferences with a Realtor will help you navigate the market conditions and take advantage of interest rates that won’t last forever. ~Charlie
We’re in the last month of first quarter 2016 already, we’re anxiously awaiting the change of season, the Home & Garden Show is underway and everybody’s talking about the “Spring Housing Market.” – And if they’re not talking about it, those of us in the business should be! We are heading into the busiest (and most fun) time of year and before we know it, Realtors, Loan Officers and consumers will be trying to take care of business and take advantage of our amazing Minnesota summers. We’ve got time to get ready for the spring market and make sure we get the most out of it before it goes by too fast – like the warm, green months always do. What needs to be done now? For consumers, whether or not they own homes, the first two steps are easy:
1. Talk to a professional real estate agent. For January, CoreLogic reports that home values rose 1.3% from December to January and they’re up 6.9% year-over-year in January. Homeowners may decide it’s time to make a move of some sort they didn’t realize was possible and renters need to explore the markets where they’d eventually like to buy.
2. Talk to an experienced Loan Officer. Financing is often a process that takes planning and time – especially for first-time buyers. Homeowners should also get a mortgage review to check equity postion and make sure they have the best loan in the current conditions.
For industry professionals, let’s work together to reach the people who can truly benefit from home value and seasonal market acceleration. My team and I can connect you with partners in your area, those who have similar goals and specialties and help coordinate co-branded outreach to help as many people as we can. I always want to know how GCS is doing from the closing side, but I also want to know how you’re doing and to work together to create business. Spring is around the corner. Let’s heat up our efforts before everything thaws out!