I wrote about this a couple of months ago. There are many homes on the market now for less than 100K.
There are houses available for as little as 25K. We have not seen prices that low in a decade or more.
First time home buyers are attracted by the low prices. I am getting so much email these days from first time home buyers that I have not been able to keep up with it and a friend of mine who is also a Realtor is helping me respond to them all.
There are a lot of people who would love to buy a home, or in some cases really need a home. Yesterday I was contacted by a woman who has to move becasue her landlord is in foreclosure. She would love to own a home of her own. She is a hard working single mother with two young children. I know another woman who has a great job and is raising her two nephews alone years after she raised her own children, she would love to have a place with a yard for the boys. She almost has enough money to do it, but not quite.
So on the one hand we have homes at incredibly low prices and on the other we have people who would love to own a home.
Most or maybe all of the extremely low priced homes on the market need a bit of work. The first time home buyer programs and the FHA and VA loan programs will not lend money to buyers who want to purchase these homes. The City of St. Paul will not let people live in these homes until repairs are made. Repairs cost money.
I have this weird idea. What if the banks who own these properties fixed them up and then raised the price enough to cover the cost of the repairs? I know that is a silly idea and banks don’t want to spend the money. I suspect that if they did spend the money we would all come out ahead. Jobs would be created, and local building supply stores would benefit. The entire city would feel the impact as the registered vacant building tags would be removed from the doors. There ate more than 1550 registered vacant building in the city of St. Paul.
This particular home has 4 bedrooms and about 1600 square feet of living space. It has oak wood work and floors and oak built-ins, a nice yard and a two car garage. It needs a new roof, and two of the rooms need extensive repairs to the walls a ceilings.
It has an almost new furnace, the plumbing looks to be in good shape, and the electrical needs to be upgraded. It is listed for $60,000 dollars, less than a third of the average price for a home in St. Paul. If the bank put 40K into it, and sold it for say 120K, it would be quite a bargain for a buyer, it could qualify for FHA financing, the bank would make a small profit off of the repairs, and someone would have a new home to live in.
Thanks for letting me take a short trip into fantasy land. I really enjoyed the adventure.