Here 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**