St. Paul Real Estate

Absorption Rates for the Twin Cities Seven County Metro

I have not written an absorption rate post since last October, they have not been very interesting and have not changed much. They have gone up a little which makes sense, October was a good month and January is always a bit slow.

Absorption rates are a  calculation of how long it will take for all the homes on the market to be sold, or absorbed, at the current rate of sales. I do love numbers, and these are in months, the data used came from the RMLS, (MLS) and is deemed reliable but not guaranteed.  Sadly there are no guarantees in life.

These are for the seven county metro area, which is like the 13 county metro area except smaller.

Anoka County 5.8 Months
Carver County 9.7 Months
Dakota County  6.6 Months
Hennepin County 6.4 Months
Ramsey County  5.8 Months
Scott County  6.7  Months
Washington County 7.0 Months

Actually Owning a Home

When we talk about home ownership we usually mean giving a bank a mortgage. We borrow money, our home becomes a lien and if we don't pay they take it away.  We don't have any equity in the home until it is worth more than what we owe on it.

This is just an opinion but I don't like 30 year mortgages.  Twenty year 20 year mortgages make more sense, and shorter term is even better.  They are less expensive and it doesn't take as long to accumulate some equity and over the life of the loan more money is put toward principal and less is paid in interest.  The idea here is that more money is being put toward actually owning the home.

Most people don't think in terms of  paying off a home mortgage but it can be done. Using a $100,000 home mortgage as an example, take a look at a 30 year loan Vs. a 20 year loan:

$100,000 Home Loan

Payment $536 on a 30 year fixed at 5% = $193,256

With first payment the borrower is mostly paying interest and after 120 payments,  the borrower is still paying more interest each month than principal.   This is just an example.  The actual payment would probably include 1/12 of the annual home owners insurance and 1/12 of the property taxes. After it is all paid off the borrower will have paid $193,256

Payment $659.96 on a 20 year fixed at 5% = $158,390

  In this example it is a 20 year loan at the same interest rate with the same amount borrowed.  Yes the payments are higher, but  there is a savings of $34,896 and after the very first payment the borrow has twice as much equity as he would have with the 30 year loan.

I know that people don't think this way when they buy a house and if they did I suspect that the thirty year mortgage would not be as popular as it is. The payments are lower with the thirty year and for most that means they can afford a more expensive house. A more expensive house is wonderful but owning one free and clear has some advantages too.

From another Time

By Jack Boardman

 In the fifties I was different from all the kids in the neighborhood. Not THAT kind of different—let me explain. For one thing we were protestant; something of an anomaly in that Roman Catholic neighborhood; and something my friends just learning their catechism would frequently remind me was my ticket to hell—something yet to be determined I should add at this point.

The thing that really set me apart from my friends was that both my parents worked outside the home. There were a few other protestant kids on the block; but there were no other kids whose parents both worked.

My mother had a career before my birth and when I reached the age of three, she decided she had enough of me—and returned to work. In latter years she told me that when that happened I punished her by not speaking to her for a week. Some would not view that as punishment..but I digress.

There were few, if any, daycare facilities at that time. In fact, I'm not all that certain daycare had been invented yet. So what my parents did was to encourage one or another of the upstairs tenants of our tri-plex to watch me in exchange for a whopping fifteen dollars a month off the sixty-dollar rent. Problem solved.

Sometimes my friends would try to sympathize with me over the fact that my mother HAD to work. Fortunately in retrospect, I never thought to mention that Mom and Dad drove a Buick instead of the Chevy or Plymouth their dads drove. Besides our Buick was purchased used.

My parents were ahead of their time in other ways. My dad did all the kitchen jobs; cooking, dishes and clean-up post meals, washing and waxing the floor, and hunting for our food in the forest. The forest of shelves a Klein's Supermarket. It wasn't all that unusual to see Dad behind the Hoover whistling as he extended his reach beyond the kitchen and into the living room. Mom washed clothes on Saturday, ironed after work on Monday (she even ironed my hankies), and bits of cleaning the rest of the week.

I guess I'm fortunate to have grown up with parents whose marriage was a true partnership with each an equal partner. 

Morning Rush

Morning rush hour at the Sixth Street transit station in St. Paul, Minnesota. 

 

 

Fridays are for Fun

St. Paul Home Sales and Prices by Neighborhood

Why do I do this every month?  Glad you asked, I do it because real estate is local, very local.  It is nice to know if home prices are going up or down on average nation-wide but for most home owners the value of their own home is more important to them.  There are numbers for the entire metro area but that usually includes at least 13 counties and sometimes parts of Wisconsin.

The numbers used to make this chart were taken from the Northstar MLS. The information is deemed reliable but not guaranteed, and includes all homes and town houses listed on the MLS with in the St. Paul city limits.

This is typical for January, the number of listings is a bit higher than it was last month and the overall inventory is higher which in this case is a good thing.  Last month it was so low it was getting hard to find the right home for my buyers. The prices went down a little from December which has become the new normal, they will tick up in February.   The interest rates remain at historic lows creating the perfect storm for those who are trying to buy or sell before the tax credits run out.

For more local numbers check out my Local Market Conditions & home prices category.

Snow Maze

by G. Sax (@gsax)

Punxsutawney whatever. Bring on the extra weeks of winter. How else am I going to build a snow maze for my dogs to play in?

The snow maze brings day after day of fun for them and gobs of humor for me. I'm the rare bird that doesn't mind shoveling because I think it's pretty good outdoor exercise at a time when I'm not outdoors as much as I'd like to be. I don't like gyms, see, so I prefer to find everyday (and free) ways to try to stay in shape.

I'm kind of thrilled with winter at this age and time.

I still know my way around the entire skyway system in downtown like I did when I was a kid so downtown activities are no bother. But now I know the good nearby parking spaces, too.

I still know where to get a good plate of fries or bowl of chili, but now I know the warmth of a good mocha or Irish coffee.

I still appreciate the closeness of everything as I did before I knew how to drive, but now I have an enclosed garage to replace long waits for parent pick-ups.

Instead of guessing at bus times, I can check my mobile phone for all schedules. And I can afford a cab if need be.

The only crappy thing about winter in Saint Paul is working in Edina.

Start those shovels!

It is going to snow for a few days . . or so they say, even though it is ground hogs day no matter what the outcome we can plan on a few more snow storms over the next ten weeks or so.

The city of St. Paul does have an ordinance that requires property owners to remove the snow from the public side walk within 24 hours of a snow fall of an inch or more. That rule even applies to vacant properties even those that are bank owned, and it is enforced but someone has to complain.  The city now has "door hangers" to put on your neighbors doors as a reminder to shovel but they don't work so well for the vacant properties. 

There is an on-line complaint form that is pretty easy to use.  You can find it on the City of St. Paul web site. Please use it.  Trust me when I say the bank isn't going to cut you any slack if you can't make a mortgage payment and we don't need to cut them any slack when it comes to the way they maintain all those homes they own.

Oh and happy ground hogs day.