It is the last day of the year and what a year it has been. . . maybe that is enough to say about 2009.

Usually I resist the temptation to make predictions for the new year but this year I feel pretty confident about what next year will bring, at least when it comes to the local real estate market.

2010 is going to be pretty much like 2009 was except by the end of the year the interest rate is going to be higher than it was at the beginning but lI think it will remain fairly low.

The tax credits being offered to home buyers will continue to give our housing market the boost that it needs but as soon as the tax credit expires home sales will drop.

There will be foreclosures this year it is hard to tell how many.  I have read reports that indicate that the foreclosure rate will be as high or higher than it was in 2009.  We are in better shape than we were at this time last year because the inventory of homes on the market is very low, so low that I think home prices will stabilize.  I will predict that home prices will remain fairly stable this year.

The local housing market is part of a much bigger picture. If the unemployment rate continues to go down then home sales will go up. People who don't have jobs can't buy houses and those same people are of course more likely to have trouble making payments if they already own a home.

For some 2010 will be a good year to buy a home. They will be able to take advantage of the tax credit and will be able to find a home for a very reasonable price.  For those who are planning to sell there is and will be less competition on the market.  Like last year the lowest priced homes will sell quickly, while higher priced homes will take months or all year to sell.

If some kind of new legislation is passed or a natural disaster or the stock market tanks again nothing I wrote here will mean anything which is why I usually don't bother with predictions for the new year. There are just too many variables.

Most of the predictions for the new year will be that it will be about what a wonderful year it will be and how everything will turn around. I would like to make a prediction like that myself but based on current information I am not seeing a turn around on the horizon.  That could all change and just like everyone else I hope it does.

The commercial real estate market is really hurting. There are many vacant store fronts all over town. Those represent businesses that are no more.  Car dealerships that no longer exist and small businesses.  Small businesses are vital to our local economy.  If you go out tonight to ring in the new year please consider going to a neighborhood restaurant or bar. We have so many wonderful places to eat and drink right here in St. Paul, Minnesota.

Here are a couple of local New Years Eve events that are family oriented:

• An early evening Sparkle-rama New Year's Eve party at the Minnesota Children's Museum is a celebration for tots in downtown St. Paul from 6.30 – 8 p.m.
• Como Zoo celebrates "Noon" Year's Eve with a countdown to midday.
• The downtown St. Paul ice rink is open until 1:00 AM
• Minnesota Wild will be playing the Los Angeles Kings at the Xcel Energy Center. The game starts at 7 p.m. on December 31.

Have a great night out or in!

The fire hydrants are buried in the snow.  That makes it hard for out local fire fighters to hook up a hose quickly.  They need our help.  Grab your shovel and clear the snow around the fire hydrant on your block.

Christopher Snowbeck wrote an excellent article about the City of St. Paul "Fourth Street Preservation Project" in this Sunday's Pioneer Press. 

The link to the article won't be good for very long.  In a nut shell the City is trying to sell a bunch of homes on the East side that need work. They have put a program in place where qualified buyers can purchase the homes for as little as a dollar and then use rehab funds to fix them up.

I took them to task last summer for advertising "houses for a dollar" when they really only had two listed for a dollar and a buyer would have to qualify for a loan of at least $160,000 to fix them up.  Sadly buyers would have to plow more money into these places than the market value of the homes once they are finished. 

The city had open houses and a lot of people came out to look at these homes.  People like to look at homes, but so far it looks like they only have one purchase agreement that might work out.

I think these houses could probably be sold and rehabbed but there are a couple of problems. One being the kind of repair requirements the city puts on the homes makes them just to expensive to rehab. The category two and three registered vacant homes are held to a much higher standard than homes like the one I live in. If I had to bring my home up to the same standards I doubt if I could afford it.

The city didn't do a very good job marketing the homes either. The hype about "homes for a dollar" attracts a certain type of buyer and in my experience it isn't the type of buyer who can  afford or who even wants to get a home loan for $160,000 to $200,000.  Considering that the median home value in the metro area is now at around 170K that is a lot of money.

The homes were are not listed on the MLS either.  We sell thousands of homes through the MLS each month. The reason are not on our MLS is because the purchase is a bit complicated. It is possible to put information in the MLS through attachments that will cover most any situation.  When it comes to selling real estate trust me the MLS is the place to list it.  Homes listed in the MLS get found by Realtors and by consumers. It is a good system. 

The City of St. Paul recently made some changes to the city web site, which is the only place on the internet where there is information about the program and the houses.   As a result it is impossible to find the fourth street preservation project.  The old links to it no longer work.  I tried searching the web site and I worked on it for about half an hour and I could not find the houses yet I think they are still for sale. I have to say that after the changes to the web site I can't find anything. 

The city has a theory as to why the homes are not selling:

    "Potential buyers have been daunted by the scope of rehab work needed on the houses, said Ellen Biales, aide to City Council President Kathy Lantry. Another concern: Many of the properties lack off-street parking.

"People want garages," said Pemberton-Hoiby." [From the Pioneer Press Article]

My response to that is that I have sold houses that need a lot of work and that lack off street parking and so have my peers.  We do it every day. Last summer I sold one that was a $47K foreclosure and it needed work, is on the East side and doesn't have off street parking.  A young woman purchased it.  She lives there now and is very happy with her purchase.

As a Realtor I can tell you that about 80% of those who are looking for a home or for a Realtor start their search on the internet.  As a Realtor I spend most of the day on the internet. That is where I get information about homes for sale. There is no information about the Fourth Street project.  

Some people and organizations can sell homes without using a Realtor, but I don't think the City of St. Paul can.  I would advise them to restructure this program so that it makes sense and to let one of us market it so that people know about it and the homes. I am sure that if someone from the city were to call Patrick Ruble at the St. Paul Area Association of Realtors we could come up with a plan to make the Fourth Street Preservation Project Work. Our board is very involved in the community and we actually care about St. Paul and her derelict houses.We don't charge anything for a consultation, and this time of year most of us have a little extra time for volunteer work.

The final walk through as we call then is your last chance to see the home you bought before it closes.

After a buyers offer on a home is accepted by the sellers a month or so will pass before there is a closing and the property changes hands. During the time the buyer doesn't have possession of the property and does not get to see the inside.

A lot can happen in a month or two. It is a good idea for buyers to go on a final walk through of the home with their agent the day before the closing or even the day of the closing to do one final check to make sure everything is as it should be.

The walk through protects buyers they get to look at what they are going to buy before they pay for it. It also protect the sellers.

A few years ago I went on a final walk through with some buyers and we found that the kitchen sink had been removed.  This is very unusual and the sellers put in a new sink before the closing. It wasn't their intent to leave the buyers sink-less . . but it could happen.

Buyers should ask for a final walk through before the closing.

I have written about the wonderful signage around our fair city before. Maybe I notice them more than most people because I take so many photos around town.  They are everywhere and are like the dog ordinance sign I wrote about last July they can be confusing. Most of the signage around town has something to do with parking or to be accurate not parking.  When they first started using the signs like the one above I thought they meant that I could not park in the spot without a handicap permit.  Who designs these things?

If you live here you know that mother nature has been heaping abuse upon us for days now in the form of snow, rain,  and cold.  Not to mention wind and snow.  I already said snow but can say it twice because it is snowing right now.

I have friends who live in warmer climates and this time of year they are all letting me know that while I am bundled up in my winter cloths they are out running around in T-Shirts.  Jay Thompson of Phoenix AZ, has suggested that I relocate.   He is a real estate broker, and that could be part of the reason he recommends relocating.  I have to say though if I did relocate Jay's brokerage would be my first choice of a place to hang my hat and retire my red mittens.   

I would love to visit Jay in his natural habitat instead of seeing him shivering in California or New York.  

The people I know who live in Arizona are quick to let me know that they live in paradise. 

    "@TBoard merry xmas from Sun City AZ, cold 55 deg. And sunny, stay warm and have a happy time."

(Via Twitter from Jim Little in Arizona)

I poked around the Infoplease.com web site to get some more information about Arizona.  All I really know about the state is that parts of it are warm all the time, and a woman that I went to college with lives in Sedona and from the photos I have seen it is very beautiful there and it is on my list of "must see" places. 

According to the Infoplease.com web site, on a rating for overall livability Minnesota ranks number 3 and Arizona number 32.  The Median income in Arizona is below the national median, but the cost of living is lower there than it is here.  Our utility costs are higher, we even pay more for water.   The overall crime rate in Arizona is higher than than the overall crime rate in Minnesota and the foreclosure rate in Arizona is also higher, but it is much too high in both states. I question if it feels any different there than it does here to lose a home.

What I really found surprising is a list of the smartest states.  Minnesota ranks number 13 of the smartest states and  Arizona ranks dead last at 50.  That doesn't seem right. After all they are smart enough to live some place warm and we are not.   Vermont got the number one spot, and I understand that it gets cold there too.  

Minnesota is also ranked as number one for the healthiest state in 2008 and in 2009.  I guess the cold winters don't actually kill us, maybe they make us stronger.  If I were to arm wrestle Jay Thompson in the winter in Minnesota I am thinking I might win. He is bigger than I am but he would expend all of his energy and strength shivering. 

I have never been to Arizona and it seems like a beautiful place, I would love to go there for a visit.  The best time to go would be February when we have our annual cold snap. 

Climate is important but for most of us it isn't the only consideration when choosing a place to live.  Sometimes we live where we do because of our families or because of job opportunities, or to educate our children and for a host of other reasons. If I were to choose a place to live based on the climate and no other factor I would live some place that is milder than Minnesota or Arizona.  Parts of California, and Florida and Texas have mild climates all year and to me that kind of a climate is the most desirable.   

The photo in this post was taken by David Smith of Tucson Arizona. I did embellish it a bit, by adding some snow and a few other tweaks and I hope he doesn't mind.. . oh and keep taking those photos, they keep me warm all winter.