Competition can help sell a home

For a couple of months, one of my listings was the only unit on the market in the building. My client was concerned when a lower priced unit came on the market. The lower priced unit brought lots of traffic to the building and as a result my clients condo sold about a week later.

If a home that is similar to yours comes on the market it can help attract more buyers to your home. If it is priced lower it may sell quickly and buyers will look at your home as an alternative. If the similar or close by home is priced higher than yours it may attract buyers who will consider your home a lower priced alternative.

In most cases nearby homes for sale will attract more buyers to the area. Consider car dealerships and how they are often located next to other car dealerships.

Occasionally condo buyers will express concern if they think there are too many units in one building that are on the market. There is rarely a reason for concern. In most larger condo buildings, with a dozen or more units  there are always units for sale.

As the market heats up . .

As the real estate market heats up I can not help but remember the foreclosures. The foreclosure peak and tsunami passed some time ago but the great recession has left vacant lots and condemned houses all over the city.  The hardest hit neighborhoods were the neighborhoods with the lowest home values.

The number of registered vacant buildings in St. Paul has gone way down and is now a 3 digit number: 738., at one point there were more than 2000.  Most of the buildings on the list are residential. I noticed that the city raised the registration fee. As fewer buildings are registered there is less revenue for the city but more shoveled sidewalks for the rest of us in the winter.

 

Home sales and prices by neighborhood

St. Paul home sales march 2017

The march home sales numbers have some ups and downs. Average and median home sale prices are up. The number of new listings is up from last month but lower than last year by more than 10%. Pending home sales were up from February and up slightly from March 2016.

I have highlight the neighborhoods in yellow where sellers on average are getting more than the asking price. When the inventory of homes is as low as it is now and the demand is high there are multiple offers and prices are bid up by buyers. I dislike the drama of the phrase “bidding war”, but that is how the media describes the situation.

As I wrote last week not all houses are getting offers the first day on the market. The average days on market is still over 50 and the median is over 25. Some of the houses selling the first day on the market are being “pre-sold” during a separate listing period before the listing period. These coming soon listings help real estate agents capture more buyer and seller leads.

The data used to create the chart was gently extracted from the NorthstarMLS and then sorted but never shaken or stirred. The data is deemed reliable but not guaranteed. There are few guarantees in life.

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

When will the housing market fully recover?

St. Paul Median home sale prices

In some neighborhoods the housing market has bounced back to where it was before the housing market crash and the great recession. In other neighborhoods houses are still worth less than they were worth more than a decade ago.

Will there ever be a full recovery? It is hard to say. The neighborhoods that have not fully recovered still have vacant houses and condemned houses. In most cases it is hard to rehab them and make any kind of a profit once they are sold.

Mortgage ready Millennials

Future home buyers

The youngest in the millennial generation will turn 20 thus year and I doubt that many are ready to buy a home. I have had several clients in the last few years who are in their thirties. High student loan debt continues to be an issue because there are limits to how much debt a borrower can have and still get a home loan.

In the long run people who are able to buy their own home are able to accumulate more wealth than those who rent. The first step in getting ready for homeownership is to pay down debt. The second step it to save a little money for a downpayment. There are numerous downpayment assistance programs for credit worthy home buyers.

I like to send people who want to buy a home but who are not quite ready because of student debt or a low credit score to The Minnesota Homeownership Center. The Homeownership center is a non-profit and free.

The Twin Cities

Median home prices in St. Paul and Minneapolis

The Twin cities of Saint Paul and Minneapolis are not identical twins. The cities are more like very close fraternal twins. There are differences between the two cities. Property taxes are higher in Minneapolis but those taxes include more services. You would have to live in Saint Paul for a time to really appreciate what a quirky little town it is.

Home prices are on average higher in Minneapolis than they are in St. Paul. Home prices are going up slightly faster in Saint Paul than they are in Minneapolis. There are other differences between the two cities.

Minneapolis has a woman for a mayor and she isn’t the first. Saint Paul has had 53 male mayors in a row. Minneapolis police chief is also a woman, Chief Janeé Harteau, who was just named on Fortune’s list of top 50 world leader. Harteau is number 22 on the list.

I guess I would call Saint Paul parochial, but I also call it home.