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.
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.
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®.
Even in this market some homes do not sell right away. There is really only one reason why a home doesn’t sell. It is because the home is over priced but there is a little more to it than that.
Some homes are priced right but photographed and marketed so poorly that they get over looked by interested buyers. Other homes might sell for close to the asking price if the owners would make a few repairs.
In general homes have a value and should be priced accordingly. Sometimes home owners choose a price based on how much money they want for their home. As a home owner myself I can relate. It would be nice to get half a million for my home but I know it is worth half that much but only if it is fixed up real nice.
Homes that are dated inside tend to sell for less than the homes that have updated kitchens and baths. Sometimes major updates are not needed. Fresh paint, new hardware and some new light fixtures are enough. What is old and tired can be made to look new and fresh again, or maybe neutral enough to be attractive to a home buyer.
In most cases the real estate agent listing the home isn’t the main reason a home hasn’t sold. The homes that are the easiest to sell are the homes that have owners who take an active interest in the home sale process. When the home owner refuses to fix a leaky pipe or won’t tidy up before a showing the house is harder to sell.
The local real estate market still favors sellers. All homes are salable. If you would like to know why your home didn’t sell when it was on the market ask or agent or give me a call.
The chart below was made using date from the RMLS, which is deemed reliable but not guaranteed. The chart shows the number of single family homes, including townhouses and condo’s put on the market each week (red) and the number of homes that received offers the same week.( blue)
According to the Minnesota Association of Realtors there are slightly more than 10 homes on the market for every buyer.
It got worse as the recession progressed. Today we have far fewer homes on the market. There isn’t anyway to compute how many buyers there are for each home but if I were to take a guess I would say five or six. In Saint Paul there is about a two month supply of homes on the market.
Back in 2007 seven no one knew that home prices would hit bottom in 2009 and then again in 2011 as they did that little bounce in response to tax incentives for home buyers.
Homes sold quickly (30 days on average) in St. Paul this past August and the median sale price was slightly higher than the median list price which may mean home prices are still rising. The inventory of homes on the market is slightly higher than last month but we would still need twice as many homes on the market to be close to an average inventory of homes for sale.
Average and median home sale prices were higher in August than in July. Interest rates remain low.
The numbers used to create the table were extracted from the Northstar MLS, and imported into MS Excel where is it gently sorted and subtotaled. The data is deemed reliable but not guaranteed. There are few guaranties in life.