1. real estate

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!