Rochester Real Estate TODAY David Birka, GRI, ABR, CNS Rochester, MN “Serving Your Best Interest Is My Only Interest!” FHA Lowers Premium The annual insurance premium on FHA loans will drop by a half of a percent point, the FHA announced. The 37 percent cut in the annual premium from 1.35 percent to 0.85 percent of the mortgage amount is the first decline of the annual premium. NAR estimates the move will result 140,000 additional annual home purchases. The decrease follows the release of an actuary report in November. The report showed that the Mutual Mortgage Insurance Fund, MMI, had a positive economic value of $5.93 billion at the end of Fiscal Year 2014. David Birka, GRI, ABR, CNS REALTOR® New Construciton/Residential Coldwell Banker At Your Service Realty 2510 Superior Drive NW Rochester, MN 55901 Toll Free: 800-998-9298 Office: 507-250-1000 Email: [email protected] • EXPERIENCE • SERVICE • RESULTS aT YOUR SERVICE rEALTY, LTD. Population 110,393 Rochester Spring Housing Market Update Local: The Rochester real estate market stabilized in 2014. More than 5,000 homes were sold in 2013; equal to 2014. Inventory levels dropped 11.5% to 4.3 months of supply. The months of inventory has dropped consistently over the last four years, which is a significant correction. Sellers are facing less competition and multiple offer situations are more common. In 2014 the average sale price for a single family homes rose 5 percent over 2013. The momentum trends for strong sales of existing homes and more new construc- tion throughout the region. National: Lawrence Yun, NAR chief economist, says the housing market got off to a somewhat disappointing start. “January housing data can be volatile, but low housing supply and the rise in home price above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows…” Midwest: Existing home sales declined 2.7 percent to an annual level of 1.08 million in January, but are still 0.9 percent above January 2014. The median price in the Midwest was $151,300, up 8.2 percent from a year ago. Rochester Minnesota Winter Market Fourth Quarter 2014 (Single Family) Active Rochester NE Average Market Time NE Closed Rochester NE NE Sale Price to List Price Average Market Time NE 68 Average List $244,791 151 Days for Active Homes 137 Average Sale $242,213 98.95 % 73 Days for Sold Homes Active Rochester NW 142 Average List $194,604 Average Market Time NW 110 Days for Active Homes Closed Rochester NW 348 Average Sale $191,817 NW Sale Price to List Price 98.57 % Average Market Time NW 61 Days for Sold Homes Active Rochester SE Average Market Time SE Closed Rochester SE SE Sale Price to List Price Average Market Time SE 69 Average List $160,739 134 Days for Active Homes 158 Average Sale $155,947 97.02 % 70 Days for Sold Homes Active Rochester SW 96 Average List $339,329 Average Market Time SW 151 Days for Active Homes Closed Rochester SW 154 Average Sale $332,102 SW Sale Price to List Price 97.58 % Average Market Time SW 87 Days for Sold Homes NOTE: Market value is neighborhood specific and must take into consideration several variables, including the unique qualities of the property. Contact Dave for a complete Competitive Market Analysis of your home or investment property. This information is based on data supplied by the SE MN Association of REALTORS, or the Multiple Listing Service, and does not guarantee accuracy. Information does not include listings of brokers who are not Association or MLS members, and unlisted properties. Receive Daily Auto Updates for Your Ho me Search: davidbirka.com Staying Healthy Fitness Help If your fitness routine needs a boost, the app C25K by Zen 2Labs may be just right for you. C25K stands for “Couch to 5K” and offers a gentle way to build up your fitness program and get you moving. The app tracks your progress and encourages just 30 minutes a day, 3 days a week for 9 weeks. It is especially good for inexperienced runners who are just beginning an exercise routine. It starts with a mix of running and walking, allowing users to gradually build up strength and stamina. It works on both Android and iOS platforms. It is a free full feature app, but also offers a pro version if you need even more motivation. Brain Help Want to train your brain? Lumosity may be the perfect app for you. Developed by neuroscientists, Lumosity is already used by over 60 million people around the world. Just as you might head to the gym to exercise your body, Lumosity provides a way for you to exercise your brain. Every day you get three free games or you can subscribe to access more. The games are based on the idea of neuroplasticity, which says that your brain can grow and learn when challenged. Lumosity is available for both the iOS and Android platforms. When to Consider Adult Day Services Adult day services are designed to provide care and companionship for seniors who need some assistance or supervision during the day. These programs allow seniors to continue living in their home comfortably, but given them needed support to do this safely and with continued health and social opportunities. These services are perfect for seniors who need the help of someone other than a family member. Many of these programs offer home visitation services, as well as opportunities to get out for activities. They provide help with meals and exercise programs in the home. In addition, there are opportunities for shopping, enjoying creative therapies such as art, music, and dance, and enjoying games and fun with other seniors. How do you know if adult day services might be beneficial for you or your loved one? This checklist can help you decide: 1. Do health issues cause problems with enjoying home life? 2 2. Do you find yourself forgetting things occasionally? 3. Is your spouse finding it hard to keep up with household duties and attending to your needs? 4. If your children are assisting you, do they have full-time jobs that keep them from visiting as often as they’d like? 5. Do you find it difficult to prepare nutritious meals every day? 6. Would you like to have a partner to help you keep up with a fitness program in your home? 7. Are you lacking in opportunities for socializing because of limited mobility? 8. Do you have a caregiver that would appreciate the opportunity for time alone and needed rest? If you think that an adult day services program would be right for you, contact your local senior center for resources. These services are often offered by nursing facilities, churches, hospitals, or community centers. Some services are offered at adult day services centers and others offer in-home services. You can find a program that is just right for your specific needs. Destination Medical Center The Destination Medical Center initiative represents the largest economic development opportunity in Minnesota. Significant economic benefits for the State and local Jurisdictions will create job growth and new business opportunities. A summary of the primary benefits of the project are outlined below. • Position Minnesota as a Global Health Care Center (20 Years) • DMC, combined with projected Mayo Clinic growth, will generate significant economic and fiscal impacts. • 25,000 – 30,000 new jobs in Minnesota from direct growth of Mayo Clinic and DMC • 10,000 – 15,000 new jobs from indirect and induced impacts of visitation and spending • 1,800 – 2,200 jobs from construction on average annually • The State of Minnesota is expected to collect an estimated $2.5 - $3.0 billion in additional tax revenues over a 20-year period. • The City of Rochester is estimated to collect approximately $195 - $205 million in additional tax revenues over a 20-year period. • Olmsted County is estimated to collect approximately $145 - $155 million in additional tax revenues over a 20-year period. • Other jurisdictions (e.g. school district, etc.) are estimated to collect approximately $80 - $90 million in additional tax revenues over a 20-year period. There is also a commercialization element to DMC – the creation of new business/ jobs developed through close collaborations. Rochester, and Minnesota as a whole, is currently losing almost all of the start-up biotech companies created here to other states. A component of DMC includes a strategy to promote Rochester and the State of Minnesota as a desirable location for start-up businesses, keeping them, and the jobs they bring, here. Rochester Builders Report a Strong 2014 Rochester home builders had their best year in 2014 since the real estate downturn. “Things are continuing to improve.” Said John Eischen, executive director of Rochester Area Builders, Inc. Rochester Ranked No. 2 by Livability Rochester was ranked No. 2 on Livability’s second-annual ranking of the best small-to-mid-sized cities in the United States. The growth was fueled by increasing consumer confidence and local job growth. Home building permits were up 13 percent in 2014 over 2013. More than 2,000 cities were ranked. “We worked with globally-known partners to analyze the best public and private data sources,” Livability says. “We were advised by the leading thinkers, writers and doers in the place-making space.” “Today Rochester attracts many young residents who quickly fall in love with the city’s creative vibe.” This marks the fourth year in a row that local home building numbers have climbed. In 2011, Rochester bottomed out with only 191 permits compared to 389 in 2014. Local builders like Leyendecker Homes, Bigelow Homes and Maplewood Homes think people are feeling more secure as they hear about Mayo Clinic’s plans and Destination Medical Center, DMC. Livability also mentions the Destination Medical Center initiative, which could lead to 40,000 new jobs and as many as 100,000 new residents. Foreclosure Update A CoreLogic analysis shows 41,000 foreclosures were completed in November 2014, a 9.6 percent year -over-year decline of 46,000 in November 2013. Before the real estate decline, between 2000 and 2006 foreclosures averaged 21,000 per month. Quick Tips: Money Tip Many people receive a financial windfall during their lifetime from an inheritance, home sale, or insurance payment. It can be confusing to know how to best manage this money. Consider placing the money in a simple savings account and then contacting a financial advisor. This prevents you from making any immediate investing mistakes. Try to pay off high-interest loans first and then invest the rest in an emergency fund and your retirement accounts. Owning a home is still a core value Despite the ups and downs of the housing market, homeowners and non-owners alike consider owning a home essential to the American Dream. That’s the key finding of a recent survey of people that was conducted on behalf of the National Association of Home Builders (NAHB). “The survey results show that Americans see beyond the immediate housing market to the enduring value of homeownership,” says NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “An overwhelming 75 percent of the people who were polled said that owning a home is worth the risk of the fluctuations in the market, and 95 percent of the homeowners said they are happy with their decision to own a home,” Nielsen says. Among the other survey results: • Homeownership and a retirement savings program are considered by voters to be their best investments. • 80 percent of homeowners would advise a close friend or family member just starting out to buy a home. • Saving for a downpayment and closing costs is the biggest barrier to homeownership. • Americans believe that owning their own home is as important as being successful at their job or being able to pay for a family member’s education. Teaching your dog new tricks There are many theories about dog training, but most experts agree that dogs respond best to reward-based training. New research shows that dogs can learn to “please their owners.” When starting to train your dog, think of it as increasing attachment between you and your pet. tach more to their playmate. This type of interaction leads to a sense of “working together,” which in turn can help your dog become more confident and obedient. Playing this type of game is also a good opportunity to teach your dog that at the end of the game, he or she should drop the rope at your command. If your dog knows that you will continue the game if he obeys, then you’ve rewarded the good behavior with an activity that your dog wishes to continue. You see this type of attachment when your dog is very happy to see you after a long day away. This same emotion can be used to help your dog learn good behavior. One way researchers have seen that dogs can increase this attachment is by simply letting them win when they play games with their owners. In the study, dogs played tug-of-war with a person, over and over. When the dogs were allowed to win the game, they were more interested in playing with that particular person. And best of all, the dogs who were allowed to win did not exhibit any unwelcome dominant behavior—they simply learned to at- break. You know your dog best, so if you engage in this type of play and you notice that your dog becomes fearful or overexcited, it might be best to take a Occasionally, a dog will not enjoy these types of games, so pay attention to any negative behavior it might cause. But if you can set some firm rules for play and your dog enjoys the attention, it can lead to better behavior and a happier relationship. 3 Rochester Real Estate TODAY David Birka, GRI, ABR, CNS New Construction/Residential Coldwell Banker At Your Service Realty 2510 Superior Drive NW Rochester, MN 55901 800-998-9298 507-250-1000 [email protected] www.davidbirka.com #1 Independently Owned Coldwell Banker Company in Minnesota! Understanding Closing Costs Buying a home is a process. There is the searching, the paperwork, and the negotiations. While the down payment is the primary cost most pay attention to when buying a home, there are other pesky fees to consider, namely, closing costs. You may have heard the term thrown about in conversation, but what exactly are closing costs? Closing costs are lender and third-party fees paid at the closing of a real estate transaction. They range from 2 percent to 5 percent of the purchase price. For example, when buying a $150,000 home, you can expect to pay between $3,000 and $7,500 in closing costs. Educating yourself about what closing costs you can expect to pay is the best way to avoid a headache at the end of the transaction. Closing costs fall into two main categories: recurring (or prepaid) and nonrecurring. Recurring costs are ongoing expenses that you will pay as a homeowner, with a portion due upon closing the transaction; nonrecurring are one-time fees associated with borrowing money and services required to purchase the home. The information below is meant to serve as an explanation of the standard items provided on your HUD-1 Settlement Statement. Recurring closing costs: These items are prepaid expenses due at closing and deposited into your escrow account. Think of it as a forced savings account for your upcoming home expenses. The specific costs can include everything from your fire insurance premiums to homeowner’s association dues, but these are the most commons ones. •Property taxes: The seller is responsible for the taxes on the home until the day of purchase, then the buyer assumes the tax liability from the date of purchase to the next billing cycle. The sum varies, but according to Good Mortgage, the average amount of property taxes deposited into your escrow account can be anywhere from one to eight months’ worth. •Homeowners insurance: Typically, the total annual premium is due at closing. Additionally, another two to three months of payments are deposited in your escrow account with the lender. •Prepaid loan interest: A prorated amount due at closing that includes your loan interest until your first payment the following month. Nonrecurring closing costs: Lender fees can vary from lender to lender. These fees are sometimes negotiable — especially when they can be attributed to high administrative costs. •Discount points: Paid upfront to lower your interest rate. •Origination fee: Charged by the lender to process your loan. •Document prep fee: The cost of preparing your loan file for processing. return service requested •Appraisal fee: Paid to have a professional estimate the market value of the home. •Survey fee: Charged for verifying a home’s property lines. •Underwriting fee: Covers the cost of evaluating and verifying your loan application. •Credit report fee: The cost of pulling your credit scores. •Wire transfer fee: The cost to wire funds from the lender to escrow to purchase the home. In addition to lender fees, a number of costs associated with your closing will need to be paid to your escrow closing agent or attorney. •Courier fee: Covers the delivery of paperwork. •Title insurance: This policy is a MUST. It protects you in case the seller doesn’t have full rights and warranties to the title of the property; the amount depends on the purchase price of the home. •Recording fees: Government fees assessed for recording the new land records. •Notary fee: The cost to notarize the Deed of Trust. •Escrow fee/Settlement fee: Paid for the services of the escrow agent. Use this information to help you have informed conversations with your real estate agent and mortgage broker. These professionals are your advocates and will be more than happy to help guide you through the process!
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