When highs become new lows

I love numbers and data. The chart below shows the number of homes on the market in St. Paul. The high for 2017 is just a tad higher than the low was for 2016. This isn’t a picture of a healthy housing market. We are in a strong seller’s market. There isn’t much new construction.

Apartment vacancy rates remain low and rents are high. More housing would alleviate the shortage. Maybe some tiny houses and micro apartments to add to our current mix. I think this would be a great time to get creative and maybe even tweak some building codes and zoning rules.

Looser underwriting standards on condo/townhouse mortgages would also help. There are not enough condos/townhouses where FHA financing is accepted.

graph
graph using data in the northstarMLS

Unless something changes we can expect more of the same in 2018.

Home sales by St. Paul Neighborhood

It is Monday which is the perfect day to look at some home sales numbers for Saint Paul, by neighborhood. The number of homes o the market remains low and the average days on market for October was 23. That means they are selling quickly.

The median home sale price is down from last month and so is the average price. We call that a seasonal variation. Hoem prices generally peak in April or May and reach the low for the year in December of January. If I wanted to buy a home I would be looking right now.

Here are home prices by neighborhood for October 2017. The data was extracted from the NorthstarMLS and includes a high percentage of single family homes including condos and townhouses that were sold last month.

The real estate market has been steady and predictable for the last couple of years and should remain so for the foreseeable future.

average prices by neighborhood
Home sales for October 2017

For more local numbers going back to about 2006 check the Local Market Conditions & home prices category.

Which twin is better?

Yesterday I got a call from someone who wanted to know which city is better to live in St. Paul or Minneapolis? Even though the cities are called twin cities there are some big differences.

St. Paul has more of a small town feel where as Minneapolis feels more like a big city. The good news is that the cities are right next door to each other. It is easy to live in one city and take advantage of all that both cities have to offer.

Housing is a little more expensive in Minneapolis than it is in St. Paul. The minimum wage is higher in Minneapolis than it is in St. Paul. Property taxes are higher in Minneapolis but they include more services like trash removal and alley plowing.

The cities have very different personalities.  I think both are great places to live but the cities are not identical twins.

chart of median home prices
Median Home prices Minneapolis and St. Paul

 

Everything is wonderful

I am going to predict that the total number of home sales in St. Paul will be slightly lower in 2017 than in 2016. Prices have continued to rise and demand is strong, but the number of homes on the market remains low.

There is little new construction and when there is new construction the homes are large and expensive. What we need are more smaller homes but apparently those are hard to build and sell so that the builder can make a profit.

We have seen an increase in new or newly renovated luxury apartment buildings and some lower rent apartment buildings too. Owning a home isn’t the best option for everyone but neither is renting. In the long run home ownership builds wealth.

As for the wonderfulness of the situation, it is wonderful for people who own rental property.

chart
Home sales and prices

September home sales and prices

 

sept home sales - table
September Home Sales and Prices

The local real estate market has been stable and predictable this year. The number of homes on the market remains low and home sales remain strong. They would be much stronger if there were more homes to sell.

Home sales start to taper off in the late summer and early Fall and reach the yearly low in December or January. Home prices are  a little lower in the fall than they are in the spring.

Fewer homes were listed in September than were listed in August which is also typical and predictable.

No surprises in the September home sale data. Homes are selling quickly and sometimes they get multiple offers and sell for more than the asking price. I think that trend will continue through the winter months.

The data used to make the table was extracted from the NorthStarMLS and was imported into MS Excel where it was gently sorted by neighborhood and then subtotaled. The NorthstarMLS is deemed reliable but not guaranteed. The numbers include all single family homes including condos and town houses that were sold within the St. Paul city limits that were sold with the help of a REALTOR®.

For data from previous months going back more than a decade please see Local Market conditions and home prices. If you would like to know what your home might sell for give us a call.