St. Paul Real Estate

Home Sale Prices By St. Paul Neighborhood

 
The data used to make this table was complied from the data in the RMLS (regional multiple listing service), it is considered reliable but not guaranteed. The numbers are for all residential real estate in the MLS during the month of April 2009.

For the third month in a row the average sales prices have gone up, and for the third month in a row the number of pending sales as gone up. Some of these variations are seasonal. Traditionally there are more home sales in the spring and prices are slightly higher, yet last year we did not see any kind of a spring increase leading me to believe that the market is stabilizing a bit this year.   For the first month since August 2008, the number of homes on the market has gone up. I know the national and local media have been reporting huge inventories of unsold homes on the market but the truth is that here in St. Paul the inventory of homes for sale is a little more of half of what it was last August.

A close look at the numbers indicated that there are fewer foreclosures.  At one point 40% of the homes on the market were in some stage of foreclosure. When I went to look for the numbers this month I came up with a small number of foreclosures. I don't believe the data because about 35 to 40% of the homes I showed last month were in some stage of foreclosure leading me to conclude that local agents are not always putting the information in our MLS by selecting the foreclosure or short sale Yes/No option. 

Foreclosure data has been hard to track because up until recently the only way we could tell if a home was in foreclosure was by carefully reading agent remarks and searching for phrases like "corporate owned". The system was changed so that there are now fields in the database for foreclosure of short sale but like I said I question that they are being used consistently.It is time consuming to go through all the comments and check but I may do that soon so I can get a better handle on the foreclosure situation. The MLS has the most data, and the most accurate data in it for getting local numbers.

There are bargains out there and the interest rates are oh so low.  For some this will be a good time to buy, for others it will not be.  It is still a little rough out there for sellers.  They are selling more quickly but sellers are often disappointed in the dollar amounts they are offered. The buyers who are buying are bargain hunting.

Click the link to see numbers like these from prior months.

Getting cold feet?

I hope my graphic isn't too graphic.  Buying a home is a huge decision. I am finding that buyers start the process, look at some homes and maybe even write an offer.  Then they get cold feet.  Some back out before the contract to purchase the home is fully executed. I am seeing this type of behavior more often than ever before and so are my peers around the country. I have had the experience with three sets of buyers this year. I wrote an offer for each and in each case they decided not to buy this year. 

It is better to back out before the contract becomes legally binding but it would be better not to make an offer at all until you are sure that home ownership it the right decision.

Most buyers get a little nervous after making an offer, that is something that seems to go along with any huge purchase. You wonder if you did the right thing, or if you offered too much and maybe even have some concerns about the home of the long term commitment involved when you think about a thirty year mortgage. 

The process should start with deciding how much you feel comfortable paying each month for housing. The next step should be meeting with a lender.  The lender will tell you how much money you can borrow.  That information alone is not enough.  Ask how much you need for a down payment and ask how much closing costs will be.  Closing costs include a mortgage origination fee, a state mortgage tax, several other fees and what we call prepaids, or money that is escrowed for property taxes and insurance . . . and there is more. For more Minnesota home buyers the minimum down payment will be 3% of the loan amount and the closing costs will be around 3% of the loan amount. The lender should provide a good faith estimate. Ask for one! It shows the true cost of borrowing the money.

After all that is done and you understand it all and are comfortable with it you can go house hunting. For some the type of house that they want to live in and what they can afford just don't match up. it is possible that after looking at some houses you may decide that you don't want to buy one. It is better to decide not to buy before making an offer.

Sellers need to understand that buyers are nervous these days and they are looking for bargains if your home doesn't look like a bargain chances are you won't be getting any offers. When an offer does come in it may bot be what you were hoping for but it may be the last offer for a long time. Take that into consideration as you negotiate. Have your agent to a market analysis to prove that your home really is worth what you are asking for it.

Absorption Rates

Wow! Break out the cotton swabs! 

Absorption rates are a  calculation of how long it will take for all the homes on the market to be sold, or absorbed, at the current rate of sales.

I do love numbers, and these are in months, the data used came from the RMLS, (MLS) and is deemed reliable but not guaranteed.  It doesn't come with a warranty either.   This covers what is referred to as the 7 county metro area not to be confused with the 13 county metro are which covers the same area, plus six more counties.  

Anoka County 5.2 Months
Carver County 6.4 Months
Dakota County  5.4 Months
Hennepin County 4.6 Months
Ramsey County  4.7  Months
Scott County  5.0  Months
Washington County 6.4 Months

I usually use paper towels to absorb the excess, last month I used toilet paper. There is not nearly as much inventory to absorb as there used to be.  Last month I predicted that I would be able to use q-tips this month. I think the cotton swabs are over kill and if this keeps up I am not sure what to use for next month. Maybe the paper towels they use in public restrooms?  A year or so ago I used a picture of a wet/dry vac in my post, things have changed since then.

An absorption rate of six months means that the market is balanced and does not favor buyers or sellers. Under six months is a sellers market and over six months is a buyers market.  We have been in a buyers market for a couple of years.  The market looks balanced but I am not sure how balanced it is. The lowest priced homes are selling at a much faster pace than the average priced home.  Part of the reason home buying activity has picked up is because it is spring.  The buyers come out when it gets warm.

This year buyers have a tax incentive and the interest rates are oh so low, so instead of just coming out of hibernation like they did last spring they are actually buying.  I predict that the absorption rates will go up in a month or two but it doesn't look like I will need the wet dry vac.  We may reach the disposable diaper stage again in a few months. Watch for the next wave of foreclosures. We should keep the shop vac handy just in case.

Bargain hunters need to understand that they are not alone. In the past few weeks I have had a couple of buyers drag their feet and let someone else scoop up the barigain. yes we are seeing multiple offers but I am only seeing them on the lowest priced properties.

For sellers I am going to suggest that this might be the window of opportunity you have been waiting for. That doesn't mean that you have more equity. Home prices have gone down.  Pretend it is 2002, your home may be worth what it was worth then.

Home Sales and Prices by St. Paul Neighborhood

At least the numbers I promised last week.  They do tell a story and they tell some lies too.  The story they tell is that the lowest priced homes, mostly foreclosures continue to sell at a brisk pace.  The lies have to do with the average actual sales prices.  The prices are right but they can be misleading considering that 60% of the homes on the market are foreclosures and the banks continue with the clearance sale.  It is difficult to find a home that is in good shape for last months average sale price of $114,193, especially with a garage and at least 1400 square feet of finished living space.. . appliances and roofs are also nice to have.

The neighborhoods with the greatest number of foreclosures also saw the greatest number of sales and the fewest number of new listings.  It is a spring market and traditional the number of sales and the number of listings go up this time of year.  What is interesting to me is that there are 50% fewer homes on the market today than there were last August. 

The inventory is dropping each month and for the first time in a very long time the number of homes that were put on the market and the number that received offers is pretty close to the same.  In 2007 we saw increases in the number of homes on the market each month and a decrease in the number of buyers until the perfect housing crash was created.  We seem to be slowly working our way out of it, just in time for the next wave of foreclosures. The average sale price for St. Paul is up slightly from last month. I have not seen any increase in the average price when I have looked at these numbers for a couple of years.

The foreclosures are being absorbed but the rest of the housing on the market is not selling so quickly.  Currently there are 1754 homes on the market in St. Paul, MN with an average list price of $205,731.

In addition to the foreclosures I am seeing some bargains in new construction.  Several of the local townhouse and condo projects have just a few new units left to sell and have reduced the prices significantly. This might be a good time to buy a new condo or townhouse, for those who are in a position to buy and can live with the idea that they may not appreciate in value for a few years.  

The data used to make the chart is gathered from the MLS.  The data in the MLS is deemed reliable but not guaranteed. This data is for March of 2009 for single family homes which includes condos, in the city of St. Paul, MN.  Homes that are pending have had offers made on them, and those offers have been accepted by the seller but the sale and has not yet closed.  The number of pending sales is used as a measure of the over all health of the housing market.

Click here for numbers from previous months.

The red line on the chart above shows the number of homes that were listed for sale through the Regional Multiple Listing Service (MLS) each week since the beginning of the year.  The blue line shows how many homes had offers made on them that were excepted by the sellers during the same week. Some of the homes have closed and some have not. Pending sales and listings are a metric used to measure the health of the real estate market.  Real estate is local and these numbers are for St. Paul Minnesota. If you own real estate in St. Paul, or if you plan to buy this data is more useful than national numbers or numbers.

The chart looks better each month. In 2007 the two lines were going in opposite directions and the inventory of homes on the market grew, while at the same time the number of home sales fell.  By mid 2008 the inventory of homes on the market started to go down, but buyer activity remained flat. 

On this chart the trend lines are going in the same direction. Listings are up and so is buying activity, partly because it is spring but the trend line for buying is going up a bit sharper than the listing trend line.  The inventory is being absorbed. More than 50% of the sales have been foreclosures and average prices are down. I will show those numbers on Thursday.

A combination of low prices, the $8000 dollars tax incentive and very low interest rates has gotten some of the buyers off the fence. The banks are still difficult to work with.  They have lowered prices but they also SCREAM AT US IN THE AGENT REMARKS  on the MLS in all capital letters advising us that our clients will  have to pay to have the home "de- winterized", and some are charging buyers a fee for submitting an offer. I don't think the banks are charging the fee I suspect it is the agents.  They are also requiring buyers to be responsible for repairs mandated by the city.  Banks can't sell real estate but at this point 60% of the homes on the market are in some stage of foreclosure, and they are indeed selling.

The banks lower the prices and sit on offers until they get one they like.  My advice to anyone buying a bank owned home is to have patience. There are some great buys out there as long as the buyer is willing to put up with a bunch of bureaucratic bull shit B.S.  I can't think of any other situation where a person would be spending ten's of thousands of dollars and be treated like like . . . never mind.

Have prices hit bottom?  Hard to say. The numbers are a bit distorted at this point because even though activity has picked up in all price ranges the lowest priced properties that usually need repairs are the homes that are selling the fastest.

See more local numbers

How does the foreclosure next door affect the value of your home?

In the last couple of months home owners have been asking what kind of an effect the foreclosures are having on their property values.

Most property values have gone down from last year.  Homes owned by banks have lost the most value. It is kind of like buying a brand new watch. I know not many people wear watches but I do.  If I bought my watch in the morning and paid,  $200 dollars for it at a jewelry store but wanted to sell it in the afternoon on Craig's list or on ebay, it would be very hard to get $200 dollars for it. I might be able to get $125, even if I never opened the box.

The shoppers on both sites don't want to pay full retail and are looking for a bargain. I could take it back to the store and get my money back and the retailer could sell it again for $200.

It is the same with homes.  As soon as they become a foreclosure they are worth less money.  No one will pay market value for them . . they just won't. I have seen it happen over and over again. The bank owned homes sell for less than homes sold by the traditional seller. Buyers won't buy them until the prices hit bottom.

All homes are affected by the foreclosure market.  In some cases there are homes in new developments that are almost identical but one home is a foreclosure and the other is not. If the bank lowers the price for a quick sale it will have an impact.  The traditional owner will have a harder time selling.  The bank has to lower the price because buyers won't pay as much for a foreclosure.

When people look for homes they go shopping and comparing prices is part of that process. They will notice the low priced foreclosures and it seems to make them unwilling to pay top dollar for any home. Today's buyers are bargain hunters.

When a Realtor or an appraiser looks at the market value of a home we look for three comparable homes that are nearby and have sold in the last year.  We generally don't use any homes that were bank owned as comparable homes because that will not give us an accurate market value. Homes that are not bank owned sell for more.  

If the home next door is a foreclosure, and it sells for almost nothing that doesn't mean that the value of your home dropped like a rock.

In the neighborhoods that have been hardest hit by the foreclosures the prices seem to have hit bottom and average sale prices are now higher than average list prices. 

Vacant homes do have an impact on the value of the homes nearby. While buyers are interested in purchasing bank owned homes they don't seem to interested in having one next door.

Absorption Rates

Absorption rates are a  calculation of how long it will take for all the homes on the market to be sold, or absorbed,  at the current rate of sales. .

The data used came from the RMLS, (MLS) and is deemed reliable but not guaranteed.  It doesn't come with a warranty either.   This covers what is referred to as the 7 county metro area not to be confused with the 13 county metro are which covers the same area, plus six more counties.  

I usually use paper towels to absorb the excess, last month I used Kleenex, next month this month I think toilet paper will do the job.  There is not nearly as much inventory to absorb as there used to be, if this keeps up maybe next month q-tips or cotton balls will do the job. A year or so ago I used a picture of a wet/dry vac in my post, things have changed since then.

Anoka County -  7  Months

Carver County -  11  Months

Dakota  County  -7  Months

Hennepin  County  - 7  Months

Ramsey County - 6 Months

Scott County - 8  Months

Washington - 9  Months

Those homes on the market are being absorbed more quickly every month. The national news media likes to say that there are a lot of homes on the market. Maybe but there are almost half as many in the metro area as there were a year ago.  Buyers are absorbing the homes at a faster rate and there are fewer homes on the market.   Will someone please let the media that the number of homes on the market had declined?  There is about a three month lag in reporting real estate trends.Home sales are up from a year ago and in February half of all local home sales were lender mediated which means they were shot sales of foreclosures. 

To see absorption rates and housing numbers from prior months see the Local Market Conditions & home prices  category

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Home Sales and Prices by St. Paul Neighborhood

The clearance sale I keep writing about continues.  The neighborhoods with the most foreclosures have the lowest average sale prices for February.  About 60% of all homes on the market in St. Paul are in some stage of foreclosure.  The inventory, or number of homes on the market continues to go down. Only 205 home sales actually closed last month, and they were on the market for an average 0f 150 days. The homes that are currently on the market have been on the market for an average of 190 days. Buyer often comment on how long a home has been on the market and need to know that average market times have gotten longer.

The data used to make the chart is gathered from the MLS.  The data in the MLS is deemed reliable but not guaranteed. This data is for November 2008 for single family homes which includes condos, in the city of St. Paul, MN.  Homes that are pending have had offers made on them, and those offers have been accepted by the seller but the sale and has not yet closed. 

The last two homes I wrote offers on for buyers had multiple offers.  We are finding a shortage of homes in some price ranges which is causing them to get multiple offers.  In both cases the sellers got slightly less than their asking price but the homes sold very quickly.  More than twice as many homes were listed last month than were sold.

St. Paul Housing Market Numbers

The red line shows how many homes were put on the market in St. Paul, MN each week since the begining of the year.  The blue line shows how many homes received offers on them that were accepted by the seller.  Some of these have already closed, and others are pending, which means the seller has accepted the offer and they are scheudled to close.

I use these charts to show the relationship between how many homes are put on the market and how many are getting offers.  In 2007 the two lines went in opposite directions, more and more homes were put on the market but fewer, and fewer got offers each month.  Our local inventory of homes on the market just kept climbing.  This chart shows that the lines are both going in the same direction, but there is still more listing activity than there is buying activity.  The inventory of homes on the market is much lower than it has been at any time in the last two years. There are currently 1760 homes on the market in St. Paul Last year at this time there were than twice as many homes on the market.

It is still very much a buyers market but the selection of homes to buy has been shrinking each month. Some buyers are having trouble finding that perfect home.

Absorption rates are a  calculation of how long it will take for all the homes on the market to be sold, or absorbed,  at the current rate of sales. .

the data used came from the RMLS, (MLS) and is deemed reliable but not guaranteed.  It doesn't come with a warranty either.   This covers what is referred to as the 7 county metro area not to be confused with the 13 county metro are which covers the same area, plus six more counties.  

I usually use paper towels to absorb the excess but I think Kleenex will work. There is not nearly as much inventory to absorb as there used to be, if this keeps up maybe next month q-tips or cotton balls will do the job. A year or so ago I used a picture of a wet/dry vac in my post, things have changed since then.

Anoka County -  8.5  Months 

Carver County -  13  Months 

Dakota  County  - 8  Months 

Hennepin  County  - 7  Months 

Ramsey County - 7 Months

Scott County - 8.5  Months 

Washington - 10.5  Months

It is still a buyers market, but at the same time the number of homes on the market continues to go down. Absorption rates are lower than they were last year, and last month but consistent with October, November and December absorption rates.  In general the real estate market continues to contract from the price and activity peak which occurred sometime in 2005. There are fewer homes on the market which is a good thing because not as many people are buying homes.  For some it isn't such a good thing because they are having trouble finding the right home to buy.

Buyers continue to be cautious and the local lenders I have talked to indicate that mortgage applications were up a couple of months ago but they have been down again for the last few weeks. The last few weeks have been very busy for me. I have been out showing houses to buyers every day for the past nine days. A couple of them have made offers.

I think we have had enough numbers this week, I'll publish some again next month including the average prices and number of sales by St. Paul neighborhood.