Rochester MN Real Estate Market Blog

In a week packed with major economic news, the biggest story for mortgage markets was the widening spread between mortgage backed securities and Treasury bonds. Issued by the US government, Treasury bonds are generally considered to be the benchmark for a “safe” security, since the risk of default is extremely low. During the week, the economic news was mixed, and Treasury rates barely changed. Mortgage rates, however, jumped by about half a point. Investors are demanding a higher return from mortgage backed securities, and the result is higher mortgage rates. In another unusual reversal, the mortgage market has been more volatile than the Treasury market, and wide swings in mortgage rates have become a daily occurrence. This past 30 day window could be the most volatile period of daily pricing movements the mortgage markets have ever experienced.

On the economic front, the highly anticipated Employment report failed to meet even Wall Street’s reduced forecast. Against expectations for a gain of 25K new jobs, the economy lost -63K jobs in February, and the figures for January and December were revised lower as well. This marked the largest monthly decline since March 2003. The Unemployment Rate surprisingly fell to 4.8%, but that reflects a large number of people who stopped looking for a job last month, meaning that they officially left the labor pool. Once again, the manufacturing and construction sectors showed the greatest weakness. Until November, the service sector had been steadily producing job gains of 100K or more per month, but even that sector barely produced any new jobs in February.

Big news came out from the Department of Housing and Urban Development (HUD). In accordance with the new legislation passed a couple of weeks ago, HUD released the new loan limits for FHA, Fannie Mae, and Freddie Mac, and they did it a week earlier than expected. The new minimum for FHA is $271,050 nationally and many Metro Markets received increases. In the Midwest, Minneapolis/St.Paul Metro area FHA limit was raised to $365,000 and the Chicago Metro area FHA limit increased to $410,000. The Fannie/Freddie minimum remained unchanged at $417,000 throughout the Midwest.. The formula is based on 125% of each region’s median price within the posted limits. As a practical matter, it will still take some time for Fannie Mae, Freddie Mac, and FHA to prepare their systems and implement the changes.

Effective today the new maximum FHA loan limit for Olmsted county has increased to $271,050.  FHA allows a little more flexibility for borrowers with less then perfect credit or down-payment money that is being gifted to them. This is also  good news for sellers up to this loan limit as the pool of buyers of perspective buyers has opened somewhat.

Chicago, IL - We are happy to announce that Shawn Buryska has successfully completed the course requirements and has earned the designation ABR on March 4th 2008. The Accredited Buyer Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted designation is awarded to real estate practitioners by the Real Estate BUYER’S AGENT Council (REBAC) of the National Association of REALTORS® who meet the specified educational and practical experience criteria.

My theory throughout my career has been if you can freely offer people solid and helpful advice you’ll stand apart from crowd.

When the internet started to be used by the masses, I saw it as the perfect venue to offer buyers and sellers a resource where they could get their various real estate questions answered. I wanted to make sure my website was a comprehensive compilation of information for both buyers and sellers. I’m happy to announce the latest version of ShawnBuryska.com. There’s a new look, but more importantly, there’s even more information for buyers and sellers then ever before! Here’s a quick tour.

Search Area Homes For Sale has an all new interface and a much more powerful database engine allowing home buyers to highly customize, save and view their searches. There’s an all new auto-notification feature of new listings as well, plus the ability to save your favorites and track any status or price changes.

My Listings For Sale has been revised to allow search engines such as Google to more easily pick up those pages, making those listings easier to find and more visible on the web. The buyers have an easier time finding what they are looking for and my sellers have additional exposure on their homes.

Current Interest Rates is a new feature and updated daily with the latest interest rates from Burnet Home Loans.

Real Estate Calculators has been updated so now you can calculate your Olmsted County real estate taxes based on the county’s assessed value. You can also see how much mortgage lenders are willing to lend you based on your income and debt. How fast can you pay your house off by making extra payments? That’s in there as well!

The Buying/Selling a Home sections have been rewritten to better assist and help buyers and sellers understand the process of buying or selling a home.

Real Estate Articles is an archive of my past articles that have been featured in my newsletters and posted nationally on sites such as Realty Times. How did I do in the words for my most recent clients?

See the all new Testimonials section for unedited comments from my buyers and sellers.

For those who are interested in trends and local real estate statistics the Real Estate Statistics section will answer all your questions and more!

 Check out the new site and tell a friend. I hope you will find it informative and helpful.

There are currently 1068 active listings for sale in the Rochester, Minnesota residential real estate with an average list price of $235,391 and an average of 179 days on the market. 

Last week there were 85 new listings with an average asking price of $203,374 and an average of 6 days on the market.  There were 12 listings that came back onto the market last week (February 25 through March 2, 2008); average list price for these properties was $264,175 and average market time was 260 days.  The 36 listings that went under contract (to pending) had an average list price $213,876 and market time of 220 days.  There were 15 expired listings in Rochester and 4 canceled.

Thirty-two properties sold last week with an average list price of $190,536 and 162 days on the market, and an average sold price of $186,666.

The biggest economic news of the week was expected to come from Fed Chief Bernanke, but a surprise announcement from OFHEO had the greatest impact on mortgage markets. Wednesday, OFHEO, the government regulator of Fannie Mae and Freddie Mac, announced that it will remove the limits placed on the portfolio sizes of the two companies as of March 1. This will enable the two companies to make or guarantee more loans. The limits had been instituted to constrain the growth of the companies while they fixed accounting errors. To make significantly more loans, the companies will have to raise additional capital, which will take some time. The regulators also announced that they are considering a reduction in the capital requirements the firms must hold for each loan, and this would accelerate the ramp up in loan volume. This measure follows the recent temporary increase in the conforming loan limits for Fannie and Freddie. The potential for Fannie and Freddie to increase their activity drove down mortgage rates. After rising Monday and Tuesday, the OFHEO news turned mortgage rates around on Wednesday. They continued to decline for the remainder of the week, finishing moderately lower than the prior week. Also on Wednesday, Fed Chief Bernanke presented his semi-annual testimony before Congress. Overall, there were few surprises. Bernanke painted a grimmer picture of the risks to the economy than he had in the past. While he acknowledged that higher inflation is a threat, he expressed greater concern about slower economic growth. He sees housing market activity stabilizing later this year, while adding that home prices may continue to decline into next year. Bernanke also suggested that FHA modernization and Freddie Mac and Fannie Mae regulatory changes are “crucial” going forward. Based on Bernanke’s remarks, the market has now built in a .50 basis point reduction by the Fed in the March Meeting also adding to the improvement in rates this week.In the housing sector, the news was mixed. January Existing Home Sales fell by less than expected, but inventories of unsold homes rose by more than forecasted. Median existing home prices fell by 5% from one year ago. Meanwhile, January New Home Sales fell to a 13-year low. The Mortgage Bankers Association (MBA) activity index, which is released every Wednesday, showed a decline in the level of refinancing activity due to the rise in mortgage rates. Mortgage rates have declined since the data was collected, however, meaning that increases may be more likely next week. Article Courtesy of Burnet Home Loans

Commentary: Producer prices jumped a surprisingly sharp 1.0% in January – more than doubling the consensus forecast for a gain of 0.4%. The twelve-month growth in aggregate producer prices now stands at a 26-year high. Core producer prices, (a statistical value that strips out the more volatile food and energy components) climbed 0.4%, marking its sharpest one-month gain since last February. The resurgent inflation story contained in this morning’s producer price index combined with last week’s more important consumer price index is leading some investors to pare back their future short-term rate-cut expectations from the Fed. Others believe the Fed will remain aggressive with their short-term rate cutting strategy — continuing to focus on the downside risk to economic growth with the expectation that slower growth will naturally control price pressures. Fed Chairman Bernanke testifies to Congress tomorrow and Thursday on the state of the economy. Investors of every stripe will be listening intently for any signal on how much lower policymakers intend to cut short-term interest rates and what impact additional cuts in the benchmark fed fund rate is expected to have on inflation. I suspect Mr. Bernanke’s recent assessment that “overall inflationary expectations remain contained” will be sharply questioned by members of both Congressional committees. If investors get any sense that the Fed Chairman is shifting his view of the current inflation threat to something more ominous — his sudden shift in position will almost surely wreak havoc on the mortgage market – pushing rates yet higher and slamming prices. Prices have are currently at their best levels of the day as the markets sift through the data from this morning. MBS market is currently down -1/32nds while the Dow is up about 150 points.

NRT Letter ROCHESTER, Minn. (Feb. 25, 2008) —Shawn Buryska, a REALTOR® with Coldwell Banker Burnet’s Rochester office, recently received a national award at the Coldwell Banker International Business Conference in Orlando, Fla. He was ranked number four for Selling Units out of a total of 59,000 Realtors across the country. “We’re proud that every year, Shawn Buryska continues to win major national awards,” said Tim Huglen, branch vice president of Coldwell Banker Burnet’s Rochester office. “This most recent award is a testament to the great service he provides to his customers and to his extensive knowledge of the local housing market.” Coldwell Banker Burnet, a leading residential real estate brokerage headquartered in Edina, Minn., serves Minnesota and western Wisconsin. The company, which was founded in 1973, operates 28 offices and has more than 2,600 sales associates throughout the market. For more information, please visit Coldwell Banker Burnet’s Web site at www.CBBurnet.com or call 952-820-HOME (4663). Coldwell Banker Burnet is part of NRT LLC, the nation’s largest residential real estate brokerage company. NRT, a subsidiary of Realogy, operates Realogy’s company-owned real estate brokerage offices.

Coming Thursday February 21 will be a brand new, more comprehensive MLS search interface for all your property searches *. The new system will allow you to search for your perfect property with much more detail then the current search interface offers. You will also be able to save your searches and you will be able to view much more information than you currently are able to. You can select and save your favorites and the system will track and notify you of any new listing matches and status changes or price adjustments.

When the new system goes live you may be able to use your current password as your user ID. Your password with stay the same as your ID. Once you sign in you will need to rebuild your saved search and your favorites list. If this doesn’t work you may need to re-enroll and re-build your searches and favorites list.

If you have favorites selected in the current system make a note of those to carry over to the new system.
Let me know if you have any questions or if I can help you in any other way. I can be reached by email or at 507-252-6745.

* Data is provided from the Southeast Minnesota Association of REALTORS Multiple Listing Servcie (MLS)