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Is right now a good time to buy in the east of Twin Cities metro area?

This will be our first house.  Does the market look like it's going to get better any time soon for buyers?  
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October 12 2013 - Oakdale
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Answers (10)

Prices have gone up dramatically over the past year and a half and cyclically, now is a great time to invest. Of course there are no guarantees in real estate but the way I look at it, buying is a forced savings plan. In 15-30 years if you are still renting, you will have nothing to show for it. On the flip side, if you buy and pay off your mortgage, you will be house payment free for the rest of your life (potentially) and have 100% equity in your home. Thinking about it in this regard, any time is a good time to buy. If you are thinking of selling in a year or two, buying may not be worth it, unless you buy right.
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October 26 2013

As many of my colleagues stated below, the market trend looks like it is continuing upward. that's for both mortgage rates and home prices.  I blogged on this topic in July encouraging renters to consider buying before they got priced out of the market.  Here's what I posted about renting versus buying in the East Metro... 

If you are currently renting an apartment or townhome, have you considered becoming a homeowner? You may be quite surprised at what you might be able to buy. Low mortgage interest rates have made home ownership much more affordable for many. In most cases, you'll likely be able to buy a townhome of the same size or bigger than your rental, for the same monthly payment or less than you are paying in rent. Consider these two examples of rent in the east metro:

2BR/1BA, 900-1100 sq. ft. ~$1000
3BR/2BA, 1400-1600 sq. ft. ~$1500

Renters in such situations can indeed afford to buy a home (principal & interest, mortgage insurance, association fees, real estate taxes and property insurance included) on the same budget. Consider these total monthly payments to own a townhome in comparison:

2BR/1BA 1000-1200 sq. ft. $850-$1000
3BR/2BA 1400-1700 sq ft $1000-1200

Buying does require a down payment. Buyers with a reasonable credit history (credit score of 650+), should be able to find loans for as little as 3.5% down, or $3500-$5000 in these examples. In some cases, that down payment can be recouped in one year based on the savings of the lower monthly payment as a homeowner. Furthermore, you'll be building equity in your home and be able to take advantage of some substantial tax breaks available to homeowners.

As you can see, home ownership makes good financial sense for those in a position to take advantage of reasonable home mortgage interest rates. If you are a renter who is interested in becoming a home owner, let me help!

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October 23 2013
I think the market will continue to get worse for renting.  We have an inventory shortage of both homes for sale and for rent in the Twin Cities.and With the recent reports of our metro area growing quickly, it being a great place for young professionals to live, our local economy doing very well and unemployment one of the lowest in the nation, the issue will continue to grow.  New construction starts are very low as well, so owning a home based on these factors is a sooner the better scenario.
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October 16 2013
The prices are going up, inventory slim, interest is going up.  The market is no guarantee.

The only guarantee you have is rent money is always gone and never recoverable--a guaranteed loss.

If you are a buyer and have financing in place buy because interest rates are already up from last summer and now you are losing money because you waited for lower prices which didn't come, and now you'll pay higher interest as well. 

If you snooze you lose and it's time to get out of bed.
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October 14 2013
I have to agree with most of the comments below me. Oakdale is a similar market to Maplewood and they both have skyrocketed this year in home values. They are in-line with the overall market expectations of another double-digit year for home price gains. It is too early to tell just yet, but I would not be surprised to see something around 13% for the Twin Cities. Oakdale would fall in line with that number since it is such a big 1st time buyer market, and the inventory has just been terrible under 200k the past couple months. 

In fact, even the greater East St. Paul area has picked up tremendously this year. I work the whole East and NE side, so I have seen this first-hand with my own clients. Many buyers that are getting priced out of Oakdale are turning to these neighborhoods in order to buy a home right now. 

So does the market look like it will get better for buyers? Not in the next 12 months as far as I am concerned. Interest rates are expected to go over 5%, and yet home prices are still expected to increase. Talk about a double whammy for buyers. 

My advice is choose to buy ASAP, or plan on renting for long term until the market swings back to buyers and your projected price point. 

If you have any other questions feel free to contact me!

~Chris
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October 14 2013
Interest rates are still at historic lows. The forecast is that they'll be above 5% in 2014. 

As for prices....they going to continue to trend up unless some kind of major calamity happens again. 
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October 14 2013
It is a great time for first time buyers.  We have several DPA (down payment assistance) programs (you must qualify) for first time buyers to make purchasing a lot more affordable.  Mortgage interest rates are sill at historic lows.  Most projections show home prices and interest rates both trending up for 2014.

Your question is the market going to get better for first time buyers.  We are there now.  Moving forward it looks like the same home will cost more next Spring.
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October 13 2013
use the rule of 15.  If you are renting.  take the annual rent and multiply by 15.  If that number is less than the house is to buy...then it it less expensive to rent.  If the annual rent times 15 is more than the house value...then it is better to buy. 
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October 13 2013
Nobody has the crystal ball to tell you for sure. However the market has been trending upward the last couple years.
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October 13 2013
I think its a great time to buy a house, interest rates are still relatively low and the inventory is coming up just enough to give you a little more selection. Buying your first home is very exciting! If you would like me to send you some market stats and trends for the east side let me know.
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October 13 2013
 
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