1904 Tower Dr, Pleasant Springs

1904 Tower Dr is a beautiful 10 acre farmette located just outside Stoughton - only about 20 minutes from Madison. It has 7 tillable acres that you can use yourself, or lease out to a local organic farmer.  The property includes a barn, machine shed & workshop/garage - all freshly painted.  The house is 3bed, 1.5 bath, 1371 sq ft.  The family/rec room in the basement could easily be converted to a 4th bedroom.  New roof, newer water heater, remodeled bathrooms.  It is rare to find a 10 acre hobby farm under $300,000 this close to Madison.  And now with the $8,000 and $6,500 home buyer credits available, plus incredibly low interest rates - don't miss your chance! 

Check out more pictures and details of 1904 Tower Dr at www.1904tower.com.

1904 Tower Dr, Pleasant Springs - $289,500.  Contact me if you would like to schedule a showing. 

Seth Peterson
Cooper Spransy Realty
608.320.9612
seth@cooperspransy.com

Madison WI Real Estate News

In Business: Madison magazine has a great section called "The Business Report."  It's a bunch of bullet points with various economical and business notes - mostly locally related.  Here are the best real estate related notes from the November magazine issue:

• The Wisconsin Housing and Economic Development Authority (WHEDA) will soon be able to make mortgage loans again to low and middle income homebuyers, thanks to a US Treasury announcement of a new bond purchase program.  More than a year ago, WHEDA suspended its practice of lending to potential homebuyers when the bond markets froze.
• Nationwide, construction spending increased 0.8% in August, compared to July, though the August figure of $941.9 billion was 11.6% lower than August of 2008.  Single-family home construction rose by 4.5%, but multifamily construction dropped by the same amount.  On the flip side, current estimates show over one million construction workers remain out of work. 
• Apex Enterprises, one of Madison's largest owners and managers of rental properties, is proposing a $30 to $50 million retail and housing development on East Mifflin St in downtown Madison that could affect homes in its path, including one built in 1903 by famed architect Frank Lloyd Wright.  The developer has offered several options for the tract of land, including building around or moving the Wright property, but is facing opposition from neighborhood and historical preservation groups.  Apex is working with local plan-design firm, Iconica, on the proposals, which include a 12-14 story tower with lower-level retail and between 110-120 condominiums that could first be rented as apartments.  Apex already has a $100 million mixed-use and hotel project proposed for the Lake Monona-Monona Terrace area.
• Preliminary site plans for a Target store to fill the gaping hole next to Hilldale Mall (left vacant after plans for a Whole Foods fell through) were to be presented to Madison's Urban Design Commission in late October.  A neighborhood meeting about the proposed store attracted 300 in October.
• Wisconsin foreclosures increased again in September.  With 4,159 properties now in foreclosure, the state had the 19th highest foreclosure rate in the country, with an increase of 4.8% over August, up 169% over last year, according to RealtyTrac Inc.  Nevada leads the list, as it has for almost three years, with one in every 23 homes in foreclosure.  Two-thirds of nationwide foreclosures are occorring in Arizona, California, Florida, Illinois, and Michigan.
  

Madison WI Homes for Sale - Deal of the Week

201 Kearney Way #305, Waunakee - $75,000

&

201 Kearney Way #306, Waunakee - $79,900

These are 2 condos currently for sale in the condo development Creekside of Waunakee.  Both of these are foreclosures and priced below market value.  All of the condos in this development have sold for at least $94,000 (see here).  Most recently, one sold for $100,000 in September (see here).  These specific condos - 201 Kearney Way #305 & #306 - each sold for $109,900 in 2007!  See the details from those sales here. 

In the past 2 years, only 8 condos have been listed under $100,000 in all of Waunakee - all of them in Creekside of Waunakee.  And all of them listed $98,000-$100,000, except for these two recently listed foreclosed condos that are under $80,000.

Click here to see the details of 201 Kearney Way #305 & #306.  Based on the pictures and comments, it doesn't appear that much TLC is needed on either of these condos.

So...it seems that getting a condo at Creekside of Waunakee for under $80,000 is a very good deal! 

Also of note, the condo fee is $194/month, but it includes heat!

FYI: If you want to search all the current Madison WI Homes for sale, visit my website at www.SethPetersonHomes.com

Sherman Village Market Statistics

Sherman Village is a nice neighborhood in a great location on Madison's north side.  It is located a few blocks north of Warner Park, where you can see the Madison Mallards baseball team, Rhythm & Booms, and other activities&events each summer.  It's also far enough away from Sherman Ave & Northport Dr, so there is not a high amount of traffic.  There is easy access to downtown, just head south on Sherman Ave about 10 minutes or so to get to E. Johnson and the downtown area.  Or for a quieter setting, head northwest 5-10 minutes to Governor Nelson State Park on Lake Mendota. 

Sherman Village connects to Northland Manor and Wheeler Heights, and they are all essentially the same neighborhood.  Most of the homes are small ranches built in the 60's.  It is a great neighborhood for first-time home buyers and young families.  There is even an elementary school (Gompers), middle school (Black Hawk), and 3 parks (Sherman Village, Northland Manor & Wheeler Heights) located right in the neighborhood. 

Here is a market update for the Sherman Village area (Sherman Village, Northland Manor & Wheeler Heights neighborhoods):

These are market statistics from the MLS for January-October each of the past 5 years.  As you can see, and as expected, the average sale price has seen a decline this year.  Dane County as a whole has seen a 9% decline in average sale price over the same time period (see Dane County Market Statistics).  So Sherman Village area's decline of 5.5% is actually better than the Dane County average.  The recession is obviously one reason for the decline.  Also, the fact that there was 89% appreciation in home values from 2000-2006 is cause for decline in values the past couple of years. (see Home Value Depreciation was Inevitable).  Another factor, which is connected to the recent recession we have seen, is the large number of foreclosures.  For example, there are 12 active listings in the Sherman Village area, and 2 of these listings have accepted offers - both are foreclosures with an average list price of $142,400.  One of these is 4414 Maryland Dr, which needs A LOT of work, and will probably be worth around $200,000 when fixed up.

Here is a link to the 10 current houses for sale in the Sherman Village area: View Properties.

Madison WI Homes for Sale - Deal of the Week

1416 Prairie Rd, Madison - $80,000

1416 Prairie Rd is located on the west side of Madison.  Perhaps not the most desirable area of Madison, but certainly not the worst area.  This 1/2 duplex is a foreclosure and currently listed at $80,000.  It has a newer roof & siding on the exterior.  The interior has all new carpeting, paint, cabinets & fixtures!  Washer and dryer are included.  There are cathedral ceilings in the living room.  The basement walks out to the backyard.  Total of 1313 finished sq ft (888 above grade, and 425 in the exposed basement).  The 2009 assessment is $136,300.  You can have this property for less than $80,000.  See the MLS data sheet here: 1416 Prairie Rd details

 

If you would like to search all Madison WI Homes for sale, then visit my website - www.SethPetersonHomes.com.  Thanks!

Real Estate Newsletter - November '09

Dane County Market Update

Dane County Real Estate Market Stats for January-October the past 5 years:

The number of houses on the market is much lower than a year ago, but the actual number of homes sold is almost identical.  Also the average days on market for a home in 2009 is almost identical to last year.  The drastic change from 2008 to 2009 is the average sale price.  As mentioned in my last blog post, it is possible that this is not 100% depreciation.  It is important to note that there are probably fewer high-priced buyers on the market, and more than average first-time home buyers (due to the $8,000 credit) compared to previous years. 

Home Sales Increase in Third Quarter

The third quarter of 2009 saw the first increase in Wisconsin home sales since the recession began in the 4th quarter of 2007.  Compared to the 3rd quarter of 2008, existing homes sales increased 5.8%.  This surge in sales is largely credited to low mortgage rates and the $8,000 first-time home buyer tax credit.

Wisconsin's home sales increase compared favorably to the country as a whole, which saw a 5.9% increase.  The Midwest region was at 5.2% increase.

Although sales increased, the median home price in Wisconsin fell 6.3% in the 3rd quarter of 2009 compared to same period of 2008.  The national reduction in median price was at 11.2%, so Wisconsin managed much better than the national average.  It is likely that a part of the reason for this decrease was a depreciation in house values, but another reason may be the abundance of lower priced homes being sold due to the first-time home buyer credit.  With this in mind, Flor stated "Wisconsin home prices are not nearly as volatile as we have seen in other parts of the country and so purchasing a home in Wisconsin remains a very stable way to build household wealth."

John Flor, Charman of the Board of the Wisconsin Realtors Association, sees a bright future for the economy as we head into 2010: "The extension and expansion of the federal tax credit is not only good news for home buyers and sellers, but also for the economy as a whole. Families buy a wide range of goods and services after they purchase a home, which helps the entire local economy, and sales of starter homes create opportunities for sellers to trade-up to a new or more expensive home."  

See the article from WRA here

New Home Buyer Tax Credit

It's official!  Obama signed an Unemployment Insurance bill today, which included provisions to extend the first-time home buyer credit of $8,000 and create a new home buyer credit of $6,500 for repeat buyers.

This will almost certainly give a boost to the real estate market, as now many current homeowners have incentive to move to a new home.  Many homeowners have been hesitant to move, because they aren't comfortable with selling in this market which has depreciated the past couple of years.  But the incentive of a free $6,500 should change some minds.  Especially considering the house they will be buying should also have a depreciated price, and interest rates are near all-time lows.

Here are the basics of the New Home Buyer Tax Credit:

• First-time buyer is defined as someone who has not owned a home for the past 3 years. 
• First-time buyers receive $8,000 tax credit.  
• To qualify for the $6,500 tax credit, you must have owned a primary residence for at least 5 of the previous 8 years.
• You do not qualify if your income is $125,000 or more ($225,000 for married couple)
• You must have an accepted offer by April 30, 2010, and closing must be no later than June 30th, 2010.
  
• Both of these tax credits are such that you actually get cash from the government (unless you owe money after doing your tax returns, in which case you would owe less money thanks to the $8,000 or $6,5000 credit)

Go to Home Buyer Tax Credit Info to see an easy to understand chart, FAQ, and other information about the new homebuyer tax credit.

Mortgage Backed Securities Explained

Here is a simple explanation of Mortgage Backed Securities, so you can understand the concept. Mortgage Backed Securities can certainly vary from and be more complex than this...

1) Someone buys a house, and to obtain the money to purchase the house, they get a mortgage loan from a bank.  So over the next 30 or so years, they will owe the bank the total loan amount (principle) PLUS interest payments. 

2) This bank gives out a lot of mortgage loans to different people.  Let's say 1,000 mortgage loans.

3) The bank then sells these 1,000 loans to an Investment Bank.  So now all the interest and principle payments will go to the Investment Bank. 

4) The Investment Bank creates a separate company, specifically a corporation.  They transfer the 1000 loans to this new corporation.  So now all the interest and principle payments will go to this new corporation.

5) The Investment Bank issues shares of ownership in the corporation (which are called securities…i.e. stocks).  These securities are then sold in the free market. 

6) Each owner of one of these securities will get a part of the cash flow from the loan payments that are now being paid to this corporation.

7) These securities are called Mortgage Backed Securities.  They are securities which are backed by mortgage payments.  Hence the wikipedia definition: "A mortgage-backed security (MBS) is an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans, most commonly on residential property."

The SEC's explanation of Mortgage Backed Securities

Good Sign for Extended/New Tax Credit

The current homebuyer tax credit is $8,000 for first-time home buyers who close by November 30th, 2009.  Last week the Senate agreed to extend this $8,000 tax credit for first-time homebuyers PLUS offer a $6,500 tax credit to repeat buyers who have owned their current home for at least five years.  The proposed bill states that the homebuyer must have an accepted offer by April 30th, and closing by June 30th. 

The first-time homebuyer tax credit was a huge success in 2008, with 350,000 first-time buyers nationally saying they would not have otherwise purchased a home this year (according to National Association of Realtors).  But the total volume of house & condo sales in Dane County was still lower for the first 3 quarters of 2009 (4,229), compared to 2008 (4,461) - and both years are significantly lower from 2007 (5,650). 

I think the $6,500 tax credit to repeat buyers will do more to stimulate the real estate market.  House values have depreciated, and many homeowners have not been able to purchase a new home because they aren't comfortable selling in this market.  The $6,500 tax credit will move many of these people to sell and purchase a new home.  With these repeat buyers AND first-time homebuyers standing to receive a "free" tax credit from the government, there is a great chance for a significant increase in house & condo sales. 

The proposed bill is awaiting approval from the House of Representatives.