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Low rates offset rising prices
04/28/2017

Low rates offset rising prices

Monthly payments remain affordable for many

Low mortgage rates offset rising housing prices.

Making the leap from renter to homeowner in the Milwaukee metro area continues to look like a smart financial move in many cases, judging from the latest North Shore Bank/GMAR Home Payment Report.

While a red-hot market is pushing prices higher, the report shows the median monthly payment for a mid-priced home in most communities is still less than $1,500. In fact, in 12 of the 32 communities covered by the report – including Greenfield, Hartford, and West Bend, to name just three – buyers who have closed on homes since January 1 are making monthly “all-in” payments of less than $1,000 on mid-priced homes.

Real estate professionals say that although home prices have climbed back to pre-crash levels, monthly payments on same-priced homes are much lower than their high point in 2006 thanks to interest rates still hovering around 4% vs. 7% back then.

Because of strong buyer interest and continuing low inventory, it remains a seller’s market. In fact, desirable homes increasingly are drawing offers before a listing is even made public. That’s one reason serious buyers need to enlist a real estate professional, says North Shore Bank’s Stephanie Glowinski-Moeller, a mortgage loan originator.

As an example of the feeding frenzy that can surround well priced listings, she told the story of returning to her Waukesha home from work one recent evening to see unfamiliar cars lining her block. “I thought maybe someone was having a party,” she said.

“Then I realized people were sitting in their cars, waiting to be among the first to see a home that was just about to hit the market. Turns out the listing Realtor® had spread the word to other agents before the listing went live and some had buyers lined up to look the minute the house began showing.”

She credited the listing agent with savvy marketing, including posting a “Coming Soon” sign in the home’s front yard before it was ready for listing.

The agent -- Julia Kellogg, a sales executive with the Jay Schmidt Group of Keller Williams Realty – said her team puts almost all MLS listings into “delayed” status, which gives other agents a heads-up that the property will be on the market in the near future. “It gives us up to 14 days to market the property to other agents while the home is being prepared to show as well as possible,” she said.
  
Glowinski-Moeller noted that another home on her block had a “For Sale by Owner” sign out front. While a do-it-yourself sale may be tempting in a seller’s market, “I don’t think it will go nearly as fast” as the Keller Williams listing, she said. “Some sellers think they know it all. But really, they need a Realtor® to get the maximum price with the minimum hassle.”

Sarah Patzer, a broker associate with the Whitefish Bay office of Realty Executives Integrity, says listings are on the rise. “Sellers are starting to realize now that we’re well into the spring market that now is the time, based on supply and demand being in their favor,” she said.

When homes are attracting multiple offers at or above the asking price, other factors can be tie-breakers. “Speed to close” is an increasingly common example. “People are bumping others out of offers because they can move up closing dates,” noted Glowinski-Moeller, adding that North Shore is now offering a 30-day closing guarantee.

Asked if she might add to the home sales on her block, she laughed. “I have no time to put my house on the market,” she said. “I’m too busy making mortgage loans.”

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