Month: January 2011

Local Home affordability index hits record

Posted on by Teresa Boardman
penny
 

The local Realtor associations came out with their reports for the month.  Home prices are low and so are interest rates which in combination makes buying a home more affordable than it has been in decades.   

“The October 2010 Housing Affordability Index of 220 was the highest level on record—going back at least several decades. This means that the median family income was 220% of the necessary income to qualify for the median-priced home using a 20 percent down payment and 30-year fixed mortgage.”

Most buyers do not make a 20% down payment.  Down payments of 3.5 -5% are more the norm and there is down payment assistance available for some. 

There are many homes on the market priced at less than 100K that are in great shape and move in ready.  

Last year we saw the number of home sales drop in fact they hit an eight year low. There is some optimism that there will be more home sales this year which is good news for sellers.  It hinges on employment.  If the local unemployment rate goes down there will be more home buying activity.

About 40% of the homes on the market are what we call “distressed” they are in some stage of foreclosure or pre-foreclosure. This number is down from the peak of 43% in 2009, according to the Minneapolis Area Association of Realtors.   Many of us believe that locally home prices hit bottom in 2009 but time will tell.  The median home price for the entire metro area for 2010 was 169, 900 which is up 2.3% from 2009.

For local housing market numbers please see “Local Market Conditions & Home Prices”

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We Feel Your Pain

Posted on by Teresa Boardman

 It is Friday and Fridays are for fun.  This week has been about as un- fun as they get but as always we need to put that behind us and move on.

I am just going to post a photo today as a reminder to those on the East Coast that we feel your pain.  It has been a brutal Winter in much of the country and we know that this too shall pass.  

burial schroeder and lucy
Schroeder & Lucy – Downtown St. Paul
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A change of pace

Posted on by Teresa Boardman
 Sate Capitol Building
 

I wanted to make up for yesterdays photos with a different kind of white.  These are the roses that grow in the lovely gardens on the grounds of the Minnesota state capitol building.  

Speaking of gardening now is the time to start planing for a garden.  It is too early to dig but not too early to think about what you might want to plant.  I like to look at seed catalogs.  For new home owners or those who are new to gardening check out the University of Minnesota Extension web site.   

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Photography and Home Sales

Posted on by Teresa Boardman
housepart wm
 

Redfin, a real estate company recently did a scientific study that supports what many Realtors already know and that is the quality of the photographs of homes for sale is important.  The study actually showed that sellers got more money for their homes if they were marketed with professional quality photography.  

The study found that the high quality pictures were taken with DSLR cameras.  

Here is a quote from the study:

 ”Given this obvious upside, it is shocking that only 15.4% of homes in our data set were marketed using professional photography. The majority of listings, 80.9%, were photographed using point-n-shoot photography, and still another 0.7% used just a camera phone. Let’s not mince words: If you are not using professional photography to market your home, you are not really marketing your home.” [Redfin]

I could not have said it better myself. 

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Median or Average?

Posted on by Teresa Boardman
Jumbo Calculator
 

The news media and the government like to use the median home price when reporting on housing prices.  The median home price is the price that is in the middle and shows that half of the people who bought homes paid more for them and half paid less.  So if three homes are sold and one sells for $50,000 and another sells for $60,000 and a third home sells for $200K the median price is $60,000.  The average price using the same numbers is $90,000.

I point this out because most of my buyers and sellers are more concerned with averages and so are appraisers and that is why I use so many averages on this blog instead of computing the median, but I can compute the median. 

Today for all of those out there who like the median I computed the median price for homes sold in St. Paul in 2010 and that number is: $122,000 which is not to be confused with the average price for the year of $148,155.

The average sale price for St. Paul homes for 2009 was $136,000 and the median sale price was $116,875.  It is safe to say that home prices went up in 2010 from what was probably an all time low for the decade but it should be noted that there were  30% fewer home sales in 2010 than there were in 2009.  For a more complete picture of the last two year and the last decade see:  a look back on a decade of home values.            

Which number do you like to use and to know the median or the average, or both?

The numbers used in this post were gathered from the Northstar MLS. The numbers are deemed reliable but not guaranteed and include all single family homes within the city limits of St. Paul, MN which does include townhouses and condos but does not include rental property, although any home included in the numbers could now be a rental property.   

See the Local market conditions and home values category for more numbers. 

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