When people find out what I do for a living, they always ask how things are going. I always tell them that it’s great! Real estate will continue to sell; people will continue to relocate, down-size, out-grow their homes and do all of the other things that have always caused people to want to sell a home and move.
As signs emerge that we are on our way out of the economic distress we’ve been in (for real estate, anyway), it’s worth noting what the changes are to this facet of our economy.
Foreclosures in Wisconsin
We will continue to see foreclosures, bank-owned properties or REO properties, and auctions of foreclosed properties – for a couple of more years, unfortunately.
While it’s easier to get a lender or representative to return your call, if there is more than one mortgage on a property, or if there is a mortgage with mortgage insurance, then that means that there is more than one level of approval needed before the new buyer’s offer will be accepted. The primary lien-holder isn’t getting enough money to pay off their debt, let alone what will be available to anybody else in line waiting to be paid.
Buyers are worried they don’t or won’t qualify for financing. While foreclosure properties require a letter of pre-approval, buyers need to be more confident in approaching their banker or mortgage broker for approval.
Reeling from the tightened restrictions of loan approval underwriters and appraisers, there is still some reform coming; this could potentially get worse before it gets better.
Traditional real estate
The “traditional” real estate transaction: a home owner selling their home to a qualified owner-occupant home buyer, is making a come-back!
The importance of the downpayment
Buyers are recognizing the importance of having their own down-payment for a home, rather than relying on a bank to finance it for them. Many banks and loan programs require a minimum of 3-5% down payment. Some loan programs allow a seller to credit the buyer for this at closing. Essentially, the buyer is financing their down payment.
“Second Home” or “Luxury” home sales are on the rise. Buyers in this market generally have cash or a significant down payment, and they are not afraid to make an investment in real estate.
House is Home
More than ever before, there is an emphasis on the importance of home and the security and nurturing feelings that go with it. “Family” is a message, a feeling. “Value” is also at the top of buyer’s lists!
Home prices in Wisconsin
Prices for homes will begin to level out, with some markets experiencing continued depreciation. There are glimmers of hope as we see some markets across the country begin to gently increase in average sale price, or at least stabilize.
Interest rates affect payments
Interest rates are expected to rise but not dramatically from one month to another. And, buyers are recognizing early on that the savings in the price during negotiations with a seller can be eaten up by a higher interest rate over time.
How homes in Southwestern Wisconsin are selling
In the markets that I serve in Southwestern Wisconsin, I have noticed over the past year that if a home is priced well, staged well, and has no remarkable “flaws” – either in design, condition, or location – sales are occurring on average within 60-90 days. And, these homes are STILL selling for approx. 95% of the list price, in most cases.
Thinking of selling? Always interview more than one agent and don’t sign anything until you’ve had time to think about which agent will best represent your property. It’s critical to differentiate between what you WANT for your home, and what you CAN GET in this market.
Thanks for reading the First Weber Wisconsin real estate & Wisconsin living blog about what’s ahead in Wisconsin real estate for 2011.
Photo credit http://www.flickr.com/photos/cottonm/566082136/