The lock in effect

Lock & keys

Those low mortgage rates and the recent mortgage interest rate increases have caused people with low interest rate mortgages to stay put. Who wants to trade in their 2 to 4% rate for 7% or 8%?

Higher interest rates are also making housing more expensive which is contributing to inflation which is why interest rates are being raised.

Rates are likely to go down this year. This is an educated guess but once rates are around 6% people will be more interested in moving again which will increase demand and drive up home prices.

Higher home prices will contribute to measures of inflation which will prompt the Federal Reserve to increase interest rates.

Renting Vs. Buying in 2024

apartment buildings
Exchange street condos and apartments

When my husband and I bought our first home the cost of renting was about the same as the cost of buying. When we bought a house we go an additional bathroom and a little more space so I suppose buying a house was the more cost effective option.

Right now home prices are high and so are interest rates and at the same time rents are coming down slightly. If you like to pay interest on a mortgage and pay top dollar for a house now is the perfect time to buy. If you are looking for a more flexible affordable option renting might be the way to go.

When interest rates go down there is going to be a home buying frenzy which will drive home prices up further.

Homeownership is a wonderful thing but the timing is important too. Houses generally appreciate in value but not always and they lack liquidity.

Realtor Marketing can be misleading

Marketing apples

Everything I have written about the apples shown above is true. They really are fat free and gluten free and they have no preservatives . . so buy my apples today!

I often see real estate agents market their services in a similar manner. They may offer a “Free market analysis” or “CMA”, yet that is a service agents rarely charge for.

When houses are selling quickly some agents will use the fact that they sold a house quickly in their marketing.

Advertising that we get more for your home is a no brainer. How much is more? How can it be proven?

Some real estate companies advertise that they will sell your house “as is”. Any real estate company can sell your house “as is”. Fixing up a home before putting it on the market isn’t a requirement.

A do it your self for sale by owner company may advertise that you can use them instead of a Realtor but the companies are owned and operated by Realtors. They operate under a business model where the home owner does most of the work.

Do you need to have open houses to sell your house? No. Many homes are sold without ever being held open. The purpose of an open house is for the real estate agent to prospect.

There is an ancient legend about a “going rate” for commission. That rate is higher than what we typically charge. There is no going rate. Have you ever seen a Realtor price list published on a web site? Of course you haven’t commissions are negotiable.

Buyer’s agents services used to be free until someone figured out that home sellers are paying buyer’s agent commissions and the money is either coming out of their bottom line or out of the price of the house.

Mortgages can’t be used to finance Realtor commissions. However, when Realtors are paid from the proceeds of a home sale and the buyer is financing the purchase, the buyer’s agent commissions are being paid with a mortgage indirectly. It’s kind of like legal money laundering.

. . oh and while I am at it watch out for that huge fee that some real estate companies include in their charges. The fee is supposed to be negotiable but from what I have seen the agent has to pay it if they can’t get the buyer of seller to pay it.

Yes, you can buy apples that do not have any high fructose corn syrup in them. . . but hurry while supplies last!

Will housing prices go down?

There are only two things that could happen that will bring housing prices down:

Lower demand

Higher supply

Tax credits or rebates will not bring housing prices down and neither will lower Realtor commissions. Housing prices keep rising because the demand is high and the supply is low.

We are seeing some relief in multifamily housing due to all the recent new construction of apartment buildings. The supply is higher which means rents are not going up as much.

During the great recession and the housing market crash builders stopped building new houses.  The population continued to grow and that drove up demand. There is a lot more new construction now than there was a few years ago. In general there isn’t enough of that middle and lower income housing.

Housing costs contribute to inflation. When inflation rises the federal reserve raises rates which in turn causes mortgage interest rates to rise which makes housing more expensive and that rising cost contributes to inflation. It is a cycle that we don’t seem to be able to get out of.

There is a lot of finger pointing but so far that hasn’t made housing more affordable. The laws of supply and demand can not be ignored.

Housing prices generally do not go down but if they stopped going up that would help the economy and home buyers too.

Today is Super Tuesday

Today is the day to vote in the presidential primary. What is a primary? A primary is when we vote for presidential candidates. We vote Republican or Democrat, and the candidate with the most votes from his or her party will be the parties nominee.  If you don’t know where to vote, follow this link.  If you are not registered to vote you can register at the polls as always. Here is what you need to register at the polls. 

Early voting has been going on for weeks and online registration is always open. If you moved, even if it was from across the hall in the same building you will need to update your registration.

If you register now you will be ready for the November 5, 2024 national election. You can even take advantage of early voting which starts September 20, 2024. You will also be registered for the primary election on August 13, 2024. Early and absentee voting starts on June 28th.

If you are registered you do not need to show an I.D. at the polls. The election judges can and will verify that you are who you say you are.

If you are one of those people who are kind of above it all and don’t like any of the candidates vote anyway. The way things are lining up it is possible that there won’t be an election for president in 2028, your vote in 2024 matters.

I voted sticker
I voted sticker


Property Tax Refunds in Minnesota

Some folks are eligible for a property tax refund and they don’t know it. The system is a bit confusing because property taxes are paid to the county but the refund comes from the State of Minnesota. There are income limits on eligibility.

The deadline for filing for a refund for property owners and renters is August 15th and if you miss the deadline your refund will vanish on August 16th of the following year. Thats right. If you snooze you lose. I wonder how many people who qualify for a property tax refund miss out?

Renters will need a CRP –  Certificate of Rent Paid.

There is also a special refund of up to $1000 for qualified homeowners who received tax increases of 12% or more in 2023 and 2024.

Instructions and forms and even free filing can be found on the Minnesota Department of Revenue website.

These refunds can be significant. Property taxes are based on the value of the property but the refund is based on income.  It is possible to get a refund for more than half of the taxes paid. Yes, this is true, the lower the income and the higher the property taxes the larger the rebate.

I wish I could say that Form M1PR, “Homestead Credit Refund (for Homeowners) and Renter’s Property Tax Refund” is easy to fill out. It is two pages long and has 39 lines and it requires adding the numbers from certain lines and subtracting others. There is a 32-page document with instructions. , and instructions on how to get help with filing your M1PR.