April 2019 Real Estate Market Update for Central MN
Hey listen, there’s so much negativity right now and publicity out in the national media about the housing market crashing and forecasts saying it’s look close to what happened back in 2008. But that’s not the whole story.
Hi, Paula Quinn with RE/MAX Central.
We’re seeing headlines like cash out mortgage refi’s are back will homes become ATM’s again? Well, it’s true. We do have a significant amount of refi’s. But the amount of money being taken out is significantly lower than it was back in 2006, which was the highest since 2000. The amount of money being taken out now is one sixth of the amount that was being taken out back in 2006. The headlines are not giving us the whole picture.
What Americans are doing today, is they are taking out money to do things like fund their children’s education, or pay down those credit cards that are 18 percent interest versus a four percent mortgage. However, in 2006, money was being taken out for things in liabilities like cars and boats and other luxury items.
Another ad titled “Consumer Debt Hits 4 Trillion” yet it doesn’t show is how much debt each family has in comparison to how much they are actually making. Yes, 4 trillion is at all-time high but how much debt a typical family has is only 4.24 percent of their income. That’s at a 40 year low. It’s lower today than it was in 1980. And probably even longer than that because the numbers weren’t even recorded until 1980. So if you look at the overall picture, we are in the best position we have been in over 40 years as compared to our disposable household income and debt.
We’re finally, actually, coming into a more normal market. This is what we want. If you look over the last 10 months, what we are seeing is actually a slow down or decrease in appreciation, not a crash. We are finally just coming into a more traditional appreciation market.
In fact, in central Minnesota our biggest issues are low inventory. In comparison, we actually have over 25 percent less active listings than we had at the same time in March two years ago. So even though mortgage rates are at an all-time low there are just simply less options for buyers to choose from. Which again, isn’t a bad thing for sellers.
So, be careful what you hear on the news. They aren’t telling you all of the facts. And if you actually like the real skinny about what’s happening in the local or the national real estate market give me a call.
Paula Quinn, RE/MAX Central
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