It is still just a dream

Today is Martin Luther King Jr. Day 2019.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident, that all men are created equal.”

– Martin Luther King, Jr 1963

Minnesota and the Twin Cities are home to some of the worst racial disparities in the country. In metrics across the board—household income, unemployment rates, poverty rates, and educational attainment—the wealth gap between white people and people of color is significantly larger in Minnesota than it is most everywhere else. There is also a large gap in homeownership between people who are white and people of color. Homeowners have a significantly higher net worth than renters have which is one of the reasons for the large wealth gap.

There are numerous events today around the Twin Cities today in honor of King. Please consult Google for locations and times.

 

Dr. Martin Luther King Speaking at the University of Minnesota
Dr. Martin Luther King Speaking at the University of Minnesota –

Photograph from the Minnesota Historical Society collection

Getting ready for the 2019 home buying season

Windowbox
Spring

The shortage of homes for sale continues. Home buyers need to get ready to compete with other buyers as homes in many price ranges and neighborhoods will get multiple offers.

Serious buyers will need to put their best foot forward and make their first offer their best offer in a multiple offer situation because they may not get the chance to negotiate. Home buyers who are not pre-approved for a home loan can not buy a home unless they can pay cash. Get pre-approved before you go shopping.

Often home buyers imagine scenarios where they offer X amount and sellers counter at X amount and they end up getting the house for the amount they had in mind. It is best to go into negotiations with an open mind and realize that in the current seller’s market homeowners are calling the shots.

The best offer isn’t always the offer of the most money. Financing is important too. Buyers who are putting more than 5% down may have an advantage. Cash buyers may have an even bigger advantage. More cash in the mix means that there is a greater chance that the loan will close.

Closing dates matter. homebuyers who are inflexible will have less negotiating power. The best strategy is to ask your agent to find out what the sellers have in mind for a closing date. Sellers who need to move into a home that they have an offer on may have to pass on an offer that is 110% of the asking price with a closing in 90 days or maybe the offer is perfect for them.

Flexibility on possession date and time can be important. I have seen situations where sellers need to move out of one home and into another on the same day that they are closing on both the sale of their home and the purchase of another. Not an ideal situation but it happens. Buyers who can allow the seller a little more time to move out can have an advantage in a multiple offer situation that doesn’t cost them a dime.

The amount of the offer is important. I have never seen a lowball offer win in a multiple offer situation. If the home just came on the market today the seller may not be ready to consider a less than full price offer.

When the perfect home comes on the market it may be sold by the weekend, be ready to make an offer now.  Have a pre-approval letter ready. See the home as soon as you can and make an offer or let your agent know you want to make an offer as soon as possible. Sometimes sellers will wait a few hours or even a day for an offer even though they have others if they know the offer is coming and the reason for the delay.

Assuming that the sellers have a lot of money that they can contribute to closing costs is a mistake. Sellers who owe a lot of money on a home may not have the resources to pay the buyers closing costs. An offer that does not require a seller contribution may be more attractive to a seller even though it is for less money.

Last year some buyers were skipping the home inspection to make their offer more competitive. I never recommend such a strategy.

Work with an agent who is prepared and who can quickly write an offer and one with a lot of experience in multiple offer situations.

Make a great offer

2018 seems so long ago now

It is Friday and Fridays are for fun. I was thinking about 2018 and what I think was the biggest story of the year in St. Paul. It all seems so long ago but it was just last June when St. Paul made the national and international news, because a raccoon climbed a 25 story office building downtown. #MPRraccoon  It took the critter hours and hours. The tired rodent took a nap on the roof of the building before being captured and removed.

If there is a life lesson it is about how hard the little raccoon worked to climb the building and how all of that work was wasted when she was captured and brought back down to the ground by a man. Apparently she just wanted some pigeon eggs for breakfast and she knew where she could find some.

The news media did an excellent job of covering the event but I thought I would use my crazy photojournalistic skills to fill in some of what the media did not cover. After all, it is Friday. (Scroll over the photos or click on them to see captions)

 

Remember when new construction was a thing?

If you go way back to the time before the housing market crash, like before 2007 you could find new construction homes for sale. I know I sold a few back in the day.

There are currently 33 new construction type properties for sale in Ramsey County and 5 in St. Paul. Average new construction prices are in the $400K range with 2500 square feet of finished living space.

Builders say they can’t make a profit on small affordable houses.  No, it isn’t your imagination. Housing is getting more and more expensive and there are more people living on the streets and in tent camps too.

The average rent in St. Paul is close to $1200 a month. Rents are lower outside of the city and in the nearby suburbs.

Wages have not kept up with housing costs.

Back porch and side entrance

Minimalists have more space

I see the inside of 300 or more homes a year. Many if not most homes do not have enough storage space. It seems like homes with more storage space have more stuff in them that is being stored.

Sometimes when people put their homes on the market they can make it feel a little more spacious by removing items and putting them in a rented storage unit. Sometimes they end up keeping the storage unit after they move and end up filling up all of the storage space in their new home.

Most of us are storing stuff that we will be moved more often than it is used. There are advantages in having less stuff. Having less makes moving easier and it can mean a smaller house.

Having a smaller house can mean lower monthly expenses and more money for travel or whatever else a person might want to spend money on. It has been my observation that people who have less stuff have more space.

Before starting the home buying process it might be a good idea to make some decisions about how much stuff you want to have and where it might fit in a home.

1 out of every 10 Americans rent offsite storage—the fastest growing segment of the commercial real estate industry over the past four decades. (New York Times Magazine).

The average American woman owns 30 outfits—one for every day of the month. In 1930, that figure was nine (Forbes).

 

storage lockers
self-storage

If you are looking for a small house we have them in St. Paul and I would be happy to help you find one.

ask about snakes before you buy

I have lived in the West 7th neighborhood for most of my life. The block we live on is on the river bluff and the limestone is just beneath the soil. Garter snakes love it because the soil is warmer. It isn’t at all unusual to see a few garter snakes sunning themselves on the basement window sills.

Occasionally a snake gets in the house. They can’t climb but they can fall in. They are not poisonous, they don’t have teeth and they usually slither away when someone comes near. They ear frogs, small mammals, earthworms and insects.

Fear of snakes is common and people who are afraid of snakes are afraid of garter snakes too and some people have ophiophobia, which is an irrational fear of snakes. I can’t recommend the part of the West 7th neighborhood that is along the river bluff to people who suffer from ophiophobia.

There have been people who bought houses in the neighborhood but could not live in them. In one case the buyer bought the home during the winter and didn’t see a snake until several months later.

It is a good idea to make a note on the seller’s disclosure about the garter snakes and encourage prospective buyers to read up on local garter snakes before making a commitment. The snakes can be found anywhere in Minnesota and throughout St. Paul.