House hunting isn’t what it used to be

I did a little research on how many houses were on the market each may from 2008 to 2018. I got data from the NorthstarMLS which is deemed reliable but not guaranteed.

May houses for sale
houses for sale in May

I could have chosen any month and the chart would have shown the downward trend. I like to think that what goes down must go up. In 2008 home buyers had 4 times as many homes to choose from.

It can be hard for buyers to find a home in the hottest price ranges. There are houses on the market. There are bargains too and they are not foreclosures or low priced houses. The bargains are the overpriced houses that do not sell with multiple offers but are sold to the buyer who is willing to take a chance and offer a fair price.

When do I need to get an appraisal?

I am surprised at how often homeowners ask me if they need to get an appraisal before they put their home on the market. The answer is no. If the buyer borrows money to pay for the home the lender will order an appraisal.

The purpose of the appraisal is to make sure that the amount being borrowed does not exceed the value of the home. The house will be used as collateral.

Houses do not always appraise for the offer amount. Sometimes buyers offer an amount that is significantly over the asking price with a small downpayment. If the house doesn’t appraise for enough the buyers may have to come up with more cash or the sellers will have to reduce the sale price.

As a home seller, I would want to see something in the offer that is for more than the asking price stating that the buyer will buy the home anyway and that the buyer has the cash to make up the difference.

If not it might make more sense to accept a lower offer because it is more likely to work out. In most cases people who have to put their home back on the market because an offer fell through end up getting less for it.

Most of the time I have an idea of what a home will appraise for. That helps with negotiations when there are multiple offers.

The way the appraisal process works is that an appraiser visits the property and looks it over. The price he/she (they are mostly men) comes up with is based on the actual sale price of three similar properties in the immediate area that have sold in the last year.

There are houses that are hard to appraise because it is hard to find comps. Appraisers can compare to properties and make adjustments. It isn’t an exact science.

On average for the Month of May 2018 St. Paul home sellers got more than 100% of the asking price. That does not mean that all homeowners got more than the asking price. If the property is overpriced sellers may get offers for less than the asking price or no offers at all.

The lender will not use a recent appraisal that the owner had done. They will always get a new appraisal and the borrower will have to pay for it. With cash sales, anything goes.

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 

First home with second hand furnishings

It is easier than ever before to furnish a home with second-hand furniture. There is furniture in various thrift shops and second-hand furniture stores around town and there is Facebook marketplace and of course Craig’s list.

Garage sales present some opportunities as well. There are “curb alerts’ in various Facebook groups for people who just want to give stuff away. they leave it on a curb.

There are a couple of pieces of furniture in my own home that I got before there was social media or Craig’s list. I found it by a dumpster and hauled it home.

Household items like dishes, cups, pots and pans and even crystal punch bowls are easy to find at thrift shops like Goodwill or my own favorite St. Vincent de Paul on West 7th.

It takes some patience and sometimes sanders, glue and paint to furnish an entire house with thrift shop finds. it isn’t like going to a furniture store and it all at once or one room at a time. It can take months or years.

Don’t forget the artwork. A home with bare walls doesn’t seem like a home at all.

Knowing what I know now if I were to start all over again with no furniture I would not be in a hurry to fill each room in a house. It is easier to acquire stuff than it is to get rid of it. Hunting for furniture and refinishing or upcycling can be a lot of fun.

Lost objects on West 7th street

 

Fuses or breakers?

The answer is breakers. There are houses in St. Paul that still have old electrical boxes with fuses instead of breakers. Fuses seem to work fine but those boxes are at least 50 years old and some are much older. Having an ancient electrical system means having fewer circuits. Insurance companies do not like fuses and will charge more or they won’t provide insurance at all.

If the power is 100 amp and the fuse box does not have to be relocated prices for upgrading to breakers start at about $1500.00. It can cost twice as much if there is 60 AMP service or if the electrical box needs to be relocated.  It is easy enough to get an estimate from an electrician.

If you are buying a house with fuses plan on upgrading to breakers. Make sure to check the electrical box before making an offer on a house. Sometimes there is more than one box especially if there is central air or an upgraded kitchen.

I strongly encourage sellers to upgrade to breakers before they put the house on the market.

We use our houses much differently today than we did in the 1950’s. We use a lot more electricity. I have seen old fuse boxes with four or five circuits for the whole house. Newer electrical systems will include that many circuits just for the kitchen.

fuses and breakers
Electrical panels