June home sales by St. Paul neighborhood

We are halfway through 2018 and so far it has been a great year to sell real estate but not such a great year to buy it. In several St. Paul neighborhoods the average sale price in June was higher than the average list price. That means prices in those neighborhoods are still going up. the overall average and median sale prices were also up from May.

The average days on market was around 20 in June. There are some houses that have been on the market for more than 600 days. I mention that because it is possible to overprice a house in any neighborhood.

There are more homes on the market than there have been for the last several months but we are still seeing a severe shortage of homes for sale.

Saint Paul home prices are at an all-time high. The data used to make the table was exported from the NorthstarMLS which is deemed reliable but not guaranteed. I don’t have an exact number but a high percentage of homes sold in St. Paul are listed on the MLS.

The data includes all single family homes and condos and townhouses within the city limits of St. Paul. Sales price data is for the homes that closed during the month of June.

Real estate is local. For more local numbers see: Local Market Conditions & home prices

The history of an over priced house

Downtown St. Paul, rooftops

As a homeowner myself I totally understand wanting a high asking price when selling a home but as a real estate agent, I can tell you that asking for more can mean getting less. It seems counter-intuitive but it is true.

A house that was listed for $449 but should have been listed for no more than $380 and would have sold for about $370 in less than three months.

The owners wanted $450,000 for it because that is what they wanted. As a result, it took 2.5 years to sell the home for 10K less than it would have sold for it was priced correctly.

They changed agents three times and reduced the price 8 times and ended up getting about $360,000. This example is extreme but is an example of why and how homeowners can end up with more by asking for less.

The houses that get multiple offers are usually priced just right. They sell faster and generally speaking the highest offers come within the first 10 days a home is on the market.

The local real estate market strongly favors sellers which means it is a good time to sell but even in a seller’s market pricing is important. Deciding on a price is more of an art than a science and there are always agents and sellers who will aim too high.

Housing supply absorption rates

Gradually and oh so slowly the number of homes on the market in St. Paul is rising. Here are absorption rates for 4 metro counties. The numbers for Dakota county are almost exactly the same as they are for Anoka County.

absorption rates
absorption rates

Absorption rates show how long it will take for all the homes on the market to be sold if buyers continue to purchase them at the current rate. Also, assuming that the supply of houses on the market remains steady. The overall absorption rate for the 7 county metro area is 1.6 months.

Housing supply is the tightest in Ramsey County and the trend line is flat. We are in a very strong seller’s market. In a balanced market that does not favor buyers or sellers, there is a six month supply of houses on the market.

During the housing market crash ten years ago we saw absorption rates at around ten months. That was a strong buyers market. Some of those buyers are today’s sellers.

What happened to all of those foreclosures?

I get a surprising number of inquiries from people who want to buy bank owned property. During the height of the housing market crash foreclosures were plentiful. They seemed to languish on the market. The people who bought during the crash did get some bargains.

Those days are gone at least for now. The foreclosure rate is still falling and Minnesota has one of the lowest foreclosure rates at .4%.

Foreclosures and pre-foreclosures in the twin cities

Home sales and prices by nieghborhood

Typically home prices peak in April. May average home sale prices for St. Paul, MN are about the same as they were in April. The median sale price is down by $8000.

The number of homes on the market has gone up slightly giving home buyers more choices. We are still seeing multiple offers on homes that just came on the market.

The number of home sales is lower this may than it was last May, and there were fewer sales last May than there were the previous May. That makes sense because there are fewer homes for sale.

sales data
Home sales and prices by St. Paul neighborhood

The data used to make the table was exported from the NorthstarMLS and imported into a spreadsheet where it was gently sorted and never stirred.

More local market conditions and home prices 

Real estate sales are brisk

It was a busy weekend for home sales. Right now there are about 25% more homes on the market than there were last month. In this case, 25% is about 100 homes. The inventory of homes for sale is still very low, like around 450. If there were twice as many homes on the market in St. Paul we would still have a scarcity of homes for sale.

The west 7th neighborhood is particularly hot. I put a house on the market on Thursday afternoon and we had two offers by Saturday afternoon and a third offer came in early Sunday morning.

All offers were for more than the asking price and I am still waiting for the for-sale sign.

Buyers are more likely to have a winning offer if they can put at least 5% down and can pay their own closing costs. My advice is to be pre-approved for a home loan and save up money to pay closing costs and for a down payment.

Home sellers who have three bedrooms, two baths and have a home that is free of clutter and in good repair are the most likely to sell quickly with multiple offers. The home also has to be priced right.

Home buyers are finding the process frustrating. It is becoming common to make offers on a few houses before getting an offer accepted. For what it is worth real estate agents also find this frustrating as we go around town writing offers that get rejected.

As a broker, I am required to keep the offers we make or receive that do not get accepted by the other party. I have to say my dead offer file getting bigger and bigger.

More homes on the market should help and there has been a slow climb in the number of homes for sale.

696 James avenue