Interestingly, Americans live in much larger homes than most people in other countries throughout the world. The U.S. Census reported in 2006 that the average single family home completed had 2,469 square feet which was 769 feet more than in 1976.

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What do they want? What do they need? Will it fit? Do they already have one? These are the common thoughts running through our minds when trying to find the perfect gift. 

The gift of really listening with no interrupting, no daydreaming and no planning your response is exactly what people want when they have something important to say.

The gift of affection with appropriate hugs, kisses and pats on the back can demonstrate your love for family and friends better than words.

The gift of laughter by sharing cartoons and funny stories will say “I love to laugh with you.”

The gift of a simple written note shows sincerity and real heartfelt sentiment that may be remembered for a lifetime and could even change a life.

The gift of a sincere compliment supports a person’s need to be accepted and appreciated. “You look great in that color”, “That was outstanding” or “I really enjoyed that” can make someone’s day.

The gift of random kindness or good deeds like holding a door or allowing someone to move ahead of you in a checkout lane shows respect for others.

Your smile, however, may be your most rewarding gift. Invariably, the person receiving the smile will in turn, smile back. The gift you gave will now be given back to you. It will be the right size and you can always use one more.

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This time of year we REALTORS hear, “We want to wait till Spring to put our home one the market.”  Or, “We want to take our home off the market during the holidays.”   The thinking is that if you wait until Spring, the flowers are blooming, the grass is greener, and demand for houses increases.  While this may have been somewhat true in the past, this year may not be the year to use that strategy.  Pricing is determined by supply and demand, and there will be more buyers out there looking for homes in the spring.  However, the largest concern of sellers should be the number of foreclosures that will be entering the market in the upcoming months.  According to the chief executive officer at Realty Trac, which keeps a keen eye on the number of foreclosures and the data, “While foreclosure activity in the third quarter continues to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp up.”  Because of some of the paper work challenges–remember the ‘robo signing”–this slowed the paper work down.  Now, those foreclosures are in the pipeline, and the spigot is about to be opened.

The ‘distressed sales” competing listings for the sellers who want to wait until Spring will bring down the average sale prices.  In the Twin City areas, the housing inventory is at a low not seen since 2006 and the median sale price is $149,250.  That is a drop of 10% from last year at this time and a 37% decline from the 2006 market.  One of the other factors is that only 3 0f 4 sales actually close.  This is due to contingencies such as inspections,  third party approvals, and low appraisals entering into the equation.  There is still 44% of the market that is made up of short sales and foreclosures, but some of this is probably due to the lack of traditional sellers active in the market.

While sellers could certainly wait until Spring, there are many indicators that the inventory will also rise.  Why not take advantage of the opportunity to secure a buyer while there is less competition?  Just a thought.

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Nationally, home prices are about the same today as they were in 2003 during the first quarter.  At that time, interest rates were about 5.8%  and today, the interest rates are about 4%.  That means the buyers can get a good ‘value’ on a home today–not just on the price, but the cost as well!  The picture below shows just how much can be ‘saved’ on a monthly basis.  If you add this up over a year, it is more than $2500!  Extend that out over the life of the loan, and it is a great deal of money.  Now, this is based on the national averages….

Now, let’s take it to the local level.  The most recent S & P Case Schiller price index for the Minneapolis area is closer to January of 2001 when interest rates were 7%! 

So that means in the Minneapolis area housing market you would save $469.72 each month, $5636.64 per year and $169,098.48 over the life of a 30 year mortgage.  You buy the home for the same PRICE, but the COST of the home is over $160,000 less!

This may be one of the best times–ever–to buy a home.  If you would like more information on why now may be a great time to buy a home, just give me a call.

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Rarely, does one size fit everyone and the same goes for advice. The following suggestion is not right for everyone. However, for people with job security and who don’t own a home; for people with good credit and enough savings for a down payment, there may never be a better time to buy a home.

Homes have had a significant price correction but in many markets, they have started to rise again. The lower prices combined with historically low interest rates make this an opportune time to buy a home if you can afford it.

One of the reasons homes are an attractive investment is the fact that you can use a small down payment and finance the balance for 30 years. The principle, called leverage, allows you to earn a return on the value of the home rather than the actual cash investment. Small appreciation can create a large rate of return on the initial investment of the down payment and closing costs.

The following example is a projection at the end of five years for a $175,000 home with 3% closing costs and a 5% interest rate for a 30 year term. The rate you see in each column is an annual rate of return based on the equity of the home at the end of the five year period due to both appreciation and amortization of the loan.

The nature of positive leverage will cause the returns to be higher with a smaller down payment. As you see in the table, the return is higher on the 3.5% down payment than with the 10% or 20% down payment.

If you’re curious to see if this advice might fit your situation, you really need to sit down with a knowledgeable real estate professional who can help you assess your position. It’s worth the time because there may never be a better opportunity than now.

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