A Street Level View

TsmallstandifHere is the deal, the news media has been reporting on the housing market a lot lately.  I hear it on TV. and I read about it in the paper. 
Half of what I read and hear is just some reporters looking for something that sounds like a good story.  There is some truth in some of it too.  They, the news media don’t actually work in real estate, they work in news rooms. 

They don’t have any listings and when they talk to buyers or sellers or even to Realtors® they already know what the story is going to be.  They look for people that they can use as examples to kind of back them up on it.  Some days they get a crazy idea and have to spend  hours searching for someone who will corroborate their story or add to it.

I would like to take this opportunity to pass on some observations about the real estate market here in St. Paul.  These observations are my own and are from some of my peers who work as Realtors®, lenders or in Real estate offices.

Activity has picked up in the last month.  It always does in January.  What I mean by activity is that more buyers are looking and sellers are listing.  None of us have noticed an up tick in sales, but activity is a good sign.

We are surprised in the last few weeks to see some investors getting back into the game.  They see that there are some bargains out there and are looking to fix up some properties.  A couple of weeks does not make a trend but we are watching and waiting. 

first time home buyers are looking at the low priced foreclosures.  In most cases they can’t buy these homes because the homes need to many repairs and they can not be financed through first time home buyer programs, or in most cases FHA loans.  Even if financing were available most of the young first time home buyers do not have the resources needed to make necessary repairs.

The condo market, especially in downtown St. Paul remains slow.  The number of units on the market has gone down but the absorption rates are at about 27 months.  Six months ago they were at 24 months.   It has been in the news every where, new construction is way down, which makes sense because some of what we already have is being sold at auction.  Builders may have trouble paying their bills if they can’t sell off some of their inventory.

Financing in general has tightened up a bit. It does take longer to get the financing in place.  Foreclosures are up and St. Paul now has 1591 registered vacant buildings, many of these are foreclosures.  The banks are not doing a very good job selling the properties.  I have qualified buyers who made a full price offer on one.  They have financing in place and are ready to go but as always the bank is sitting on it because banks can’t sell real estate.

Home values have gone up in some parts of St. Paul and have gone down in others.  I will have home values and sales by neighborhoods for January up in about ten days.

There is talk of a bottom.  We will know when we hit bottom a few months after it happens.  There are predictions out there that I do not believe.  Some are saying we have already hit bottom, I am not sure if  I believe that either.  Some say the bottom is a year or two out.  I don’t believe that either, I think the truth lies some where in between the optimistic Realtor®  associations and the negative media.

Like I said in my post yesterday it is a good time to buy or sell for some.  For those who do not have equity in their homes it is not a good time to sell.  For those who do not have the resources it is not a good time to buy.  For those who have equity and would like to purchase another home, now may be the best time.  While they will get less for their home, they will save money on the purchase too.  Will the prices go lower still?  Maybe but if they do then the home seller will get even less for their home and pay even less for a new one. 

There are 75% fewer lenders in Minnesota than there were a year ago. I am unable to get any numbers on how many Realtors® have left the industry.  There is always a lot of churning so the number is a moving target.

** photo taken by Kristal Kraft, who was either very brave or far away**

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11 Replies to “A Street Level View”

  1. Thanks for sharing a photo of yourself. Who took it? Knowing how little you like to be photographed, I suspect the photographer was very brave, or far away.

  2. I couldn’t agree with you more. For the investor and the person with equity go for it there is not a better time to buy. For those who can afford it indulge this is a great market now.

    So nice to hear the sky is not falling in your area either!

  3. Very far away. Far enough to know you couldn’t throw your empty digital at me. Far enough away to use a 85 mm lens. 🙂
    I’m one smart cookie, I play it safe.

  4. Teresa Boardman says:

    Blue Ridge – you don’t know that. There could be an even better time to buy, and a worse time too.

    KK – I know where you live.

  5. KK, I think you can take her!!!

    T, Do you know for a fact that builders couldn’t pay their bills? Just sayin’

  6. Teresa Boardman says:

    Bob – yes it is a fact that some are struggling financially. They also own land that they can not develop for quite some time. Owning real estate is expensive.

    No KK can not take me. 🙂 neither can you.

  7. For what it’s worth, the market is similar in Red Wing. There has been an increase in website activity and in showings.
    We list some foreclsoures and they have been selling.
    Our reps at the banks have mentioned that one person, at the bank, can be in charge of as many as 300 assets(“asset”is bankspeak for house).

  8. In Kansas City I’ve seen web activity double in January over December and I’d estimate that showing inquires are up much more than that.

  9. Marvin Strong says:

    Things here in the Brainerd area have quickened a bit for having 40 below windchills. Great insight on the market activity.

  10. T, if you change your city of St. Paul to Phoenix, I’m not sure there’s anything I would disagree with.

  11. This is a great idea and will help both the Realtors and buyers Real Estate System. Nothing worse than a buyer at the closing table feeling buyer’s remorse.

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