Is this house a good investment?

blue house
small house

Is this house a good investment is a great question and the answer has more to do with the situation of the person buying the house than it does with the house.

First, let’s assume that the real estate buyer is smart and savvy and pays fair market value or less for the property. We don’t know for sure if the value of the home will go up or down. Historically Minnesota real estate has appreciated . . . except for that one time when it dropped like a rock.

Buying real estate is a long-term investment. When compared with renting long-term homeownership builds wealth and renting does not.

However, if a person has a choice between buying a home or using the money to start and build a business the business might be a better investment. Right now the tax breaks for businesses are bigger than tax breaks for homeowners too.

Owning a home for a short period of time can be more expensive than renting. Buying a home might not be a good investment for someone who needs to move often to take advantage of job opportunities.

For my family buying a house has been a great investment but we took a risk. We bought a house in an area that was experiencing some urban decay. Interest rates were sky high and people had trouble selling their homes.

The neighborhood has turned around and I guess we are on the way to gentrification. We bought low and yes it has been a very good investment. It wasn’t easy in the early days.

The question should be: Is this house a good investment for me at this time? Do I want to invest in a house or is there a better use of my hard earned money? Do I want to spend my money on stuff or on experiences or both?

Quiet real estate

Did you know that in Minnesota a person who sells cemetery plots needs a real estate license? I don’t sell cemetery plots and wrote this post 10 years ago. I found it while I was looking for something else.

We have some beautiful old cemeteries here in St. Paul.  I guess I have always had a fascination with them because of they show the history of the city.  Calvery Cemetery, located on Front Street in St. Paul is the oldest of the Catholic cemeteries.  It was dedicated by Bishop Cretin in 1856, the oldest of The Catholic Cemeteries. Buried almost 101,000 persons since 1856, still currently averaging 290 burials per year.  It is filled with beautiful monuments and old Oak trees.  It is huge and very easy to get lost in.
Oakland Cemetary founded in 1853 is a non-denominational cemetery.  It is smaller the Calvary and there are a lot of civil war veterans and politicians buried in it.  The oak trees are amazing, as are the monuments.



Home sales by neighborhood

February was another record-breaking month as we set a new record for the all-time lowest number of homes on the market. Home prices continue to increase as supply decreases. Home sale prices were close to list prices or higher in some neighborhoods.

The data below is from the NorthstarMLS.

St. Paul home sales February 2018

Eventually, there will be more homes on the market but no one knows exactly when that will be. For now, buyers need to watch and wait. There are people who want to sell but they either can not find the right home to buy or are afraid they won’t be able to.

For more local real estate numbers please see:  Local market conditions & home prices. Real estate is local.

What you always wanted to know about Realtors

REALTOR® isn’t a job title. REALTORS® are members of the National Association of Realtors. (NAR). Every year in about the middle of the year NAR releases a membership report. Here are some statistics from the report:

There are 1.22 million members nationwide.

63% of all members are women.

The median age of members is 53 years old.

82% own their primary residence.

Median years of experience for members is 10 years.

4% of members are under 30.

30% of members are over 60.

In 2016, the typical agent had 12 transactions, which is up from 11 transactions in 2015

The median gross income is $42,500

38% of those who have 16 years or more of experience have median gross incomes of $100,000

More than half of the members who have less than two years of experience earn 10K a year.

51% of member agents are affiliated with independent firms.

82% of REALTORS® are very certain they will remain active as a real estate professional for two more years.

Tomorrow I’ll have some numbers for home sales in St. Paul for the month of February.

Getting ready to sell a house?

Here in St. Paul people who want to sell their house will need to get a truth in housing inspection. TISH for short. The program is run by the City of St. Paul. The inspection is pretty basic and no repairs are required with one exception. Homes are required to have one hardwired smoke alarm with battery back-up.

The city has specific requirements as to where and how this smoke alarm/detector is to be mounted. In most cases, an electrician will need to do it and a permit will be required.

The city has a list of qualified inspectors who can perform the inspection and prepare the report.  The inspection will not be free and is required. The city has a list of common deficiencies.  It is a good idea to make repairs before the inspection if possible.

Even though repairs are not required when a buyer sees a report with a lot of items on it that are hazardous or below minimum standards they may not want to make a full priced offer or any offer at all.

The houses in St. Paul are old. Most truth in housing reports have several items on them that are below minimum standards but it is a myth that houses have to be brought up to code or that repairs have to be made.

Building code is local and it changes over time. St. Paul building code was very different in the late 1850’s when my home was built than it is today.

Also see:

How to find Truth in housing reports


feels like March

It is Friday and Fridays are for fun. I’ll admit I didn’t go outside all that much during our long string of brutally cold days. I actually started going outside again on a regular basis.

I have been walking to the store and the bank and to my downtown office. I have walked about 25 miles in the last week.

There are many impressive puddles on the sidewalks and in the streets. Some appear to be knee deep, many are ankle deep and some of them have pictures in them:

Downtown Puddle
West 7th puddle
Dayton Avenue

This is the season for puddle photography just find the puddles with the pictures in them.