12 years of home values in St. Paul

There are still home owners who paid more for there homes than they can sell them for. The good news is after a decade or so of making house payments in most cases these home owners do not still owe more money on their home than they can get for it. It is hard for these home owners to accept the fact that their house has not appreciated in value.

The good new is values are close to what they were during the peak and have been going up since 2012.

average home prices

The date used to make the chart is from the NorthstarMLS which is deemed reliable but not guaranteed.

 

 

 

Hey buddy will you sell your house?

months housing supply
Absorption rate

I used to publish housing absorption rates often. Way back in 08 and 09 during the great recession there was a 7 to 12 month supply of houses on the market.  Right now there is about a 2.4 month supply in the 7 county metro area and about a 2.1 month supply in Ramsey county.

No news here but there is the possibility that the 1.7 month supply we hit last December was the new low and from here we just go up. For those who have no idea what I am talking about supply has to do with how long it would take to sell every house on the market if no new listings were added and buyers continued to buy homes at the current rate. The number is also referred to as an absorption rate.

When there is less than a 6 month supply of homes for sale we call it a sellers market.

Here are some absorption rates from late 2010 when we were is a strong buyers market:

Anoka County 8.7  Months
Carver County 7.9 Months
Dakota County 8.1 Months
Hennepin County 9.1 Months
Ramsey County 8.5 Months
Scott County 10 Months
Washington County 9.5 Months

If you are interested in selling a house give me a call.

Home sales and prices by neighborhood

it is Monday which is a great day for data and for numbers. The table below is for the Month of July 2017 and includes all home sales as recorded in the Northstar MLS in the city of St. Paul. The data is deemed reliable but is not guaranteed and includes most home sales.

Home sale prices likely peaked for the year last month at an average of $261K and a median sales price of $219,950. The number of homes on the market remains low but has risen to November 2016 levels. We would need about twice as many homes on the market to have a balanced market. We are currently in a strong sellers market.

Prices usually peak in April or May. The July sales numbers represent home sales that closed in July. Buyers likely made the offers in May and June. There are several neighborhoods where the sales price is higher than the asking price. For the third month in a row the average sales price in St. Paul was higher than the average list price. Look for that to change in the late summer, early fall.

chart with sale prices
Home sales and prices St. Paul, MN

For more local real estate numbers please see local market conditions and home prices.

The hottest St. Paul Neighborhoods

Homes are selling pretty quickly all over the metro area but some St. Paul neighborhoods are hotter than others. In these hot spots homes sell very quickly, there is less than a two month supply of homes on the market and on average sellers are getting more than 99% of their final asking price.

The chart below shows months of inventory, as compared with the city as a whole as is one of the measures I used to determine where the hot spots are in St. Paul. I also looked at average days on market and at list price Vs. sales price. Here are the top 3:

  1. Hamline Midway
  2. Como
  3. West 7th

If you are selling a home outside of St. Paul or in one of out many lovely neighborhoods your home will likely sell quickly if it is correctly priced but you may not get multiple offers the first day or week your home is on the market. These are the highest demand neighborhoods right now.

Come back tomorrow for the monthly home sales numbers for the month of July.

graph showing absorption rates
St. Paul’s hot neighborhoods in the summer of 2017

Also see “Seller expectations sky rocket

Hot neighborhoods in 2016

Eventually you will have to pay it back

 

Lenders and banks recommend home equity loans and refinancing early and often. These are the same institutions that got bailed out while millions lost their homes.

Using home equity as a source of cash isn’t a bad thing. Especially when the money is used for a new roof or for that boiler you have always wanted. The interest rates are usually more favorable than they are on other types of loans and for some there is a mortgage interest tax deduction.

There are also numerous advantages in not borrowing money that should also be explored before withdrawing money from the bank of home equity. For example a home can be sold and there can be money from the proceeds to use to buy another home.

It is also possible to own a home free and clear and enjoy a mortgage free retirement on that fixed income.

You would be amazed at how liberating it is to have no mortgage, car payments, student loan debt or credit card debt to pay down each month. Yet at the same time knowing that if you need money you can borrow against your home.

Maybe I just have the post housing crash jitters. . . but please borrow responsibly. It doesn’t seem like the banks suffered because they lent money to people who could not pay it back but many former home owners did and still are.

Price reductions are common

Out of curiosity I did a little research on price reductions and found that 62% of all homes sold in St. Paul in 2017 had a price reduction before they sold. On average they sold 27 days after the price reduction. 

Sellers are on average getting their asking price or more but when I look at original asking price Vs. final asking price the spread is a bit bigger.

Knowing when to reduce the price can be tough for home owners. If the home is getting a lot of showings but no offers price adjustment may be needed.  Starting to0 high is common as many believe that it gives them more room to negotiate or that they will end up with more money for the home.

Homes that sold without needs price reductions were on the market for an average of 22 cumulative days whereas homes that had price reductions were on the market for 117 cumulative days.