18-29 year olds living with mom and dad

It feels like Deja Vue. During the great recession and young people continued to live with their parents because they had student debt and jobs were scarce.

According to PEW research, 52% of young adults (18-29) live with their parents. That is more than half and the largest number since the great depression.

The pandemic is credited with a migration back to mom and dad.

“in July, 52% of young adults resided with one or both of their parents, up from 47% in February”

Yet there is no shortage of homebuyers. Homes on the market in the metro area continue to sell quickly and often with multiple offers.

Maple leaf
Maple leaf

Buy low sell high

Right now is a spectacularly bad time for most people to buy residential real estate.  Home prices are at historic highs as home buyers outbid each other until they reach new heights. There is a raging pandemic and an economic recession.

I say “most” people because there are exceptions. There are always people who have to move and sometimes it does cost more to rent.

Too many people are making decisions based on the pandemic. They are assuming they will have jobs and that they can work from home long term. Most jobs and conditions of employment are not long term but mortgages are for 10 to 30 years.

There has been a shortage of homes for sale for the last several years and the pandemic has made it worse.  The demand is high and the supply is low and prices are often too high.

It truly is a fantastic time to sell a house. I am not sure there has ever been a better time to sell a house.  Houses sell quickly and they sell for top dollar.

Homeowners can take advantage of a once in a lifetime event and make a nice profit even if they have only owned the home for a few years.

It is also a great time to own real estate, especially real estate without a mortgage. It might be a good time to refinance depending upon your current interest rate and how much you owe.

A better time to buy might be mid-2021 or maybe early 2022. By 2026 the housing shortage may ease up a bit as the oldest baby boomers turn 80.

If you are planning on buying or selling real estate I am here to help. I’ll be here in 2026 too.

Making the offer before seeing the house

There is a high demand for homes for sale. With the “COVID-19” rules we generally will not allow overlapping showings on homes that are for sale. That means that every available time slot to tour a home has been taken.

In other words, if you are buying a house you may need to compete with many other home buyers just for the opportunity to see the house in person.

As a result, buyers have been making offers on houses based on the photographs. They usually make the offer inspection contingent and tour the home during the inspection period.

If you just noticed that the house went on the market so did several other buyers. If the house looks like it is a perfect fit it is also a perfect fit for many other potential buyers which is why you will need to act quickly.

The current seller’s market is challenging for buyers. The very best advice I can give is that if you have to buy a house now plan on making offers on a few or several houses as they come on the market. Be persistent and plan on making offers until one works out.

If there are multiple offers you will need to go over the asking price. If you have some cash offers with larger down payments like 20% or more are more attractive to sellers. Being flexible on closing dates and on other terms also helps.

Buying a house in December or January may be easier than buying one now. When the pandemic is finally over we will probably see more homeowners who want to sell.

Also, see Getting ready for the 2019 home buying season (this applies to the 2020 home buying season and the 2021 home buying season)

The next home buyers market will probably happen sometime after 2025.

Working with a buyers agent 

All about agency. Working with a buyer’s agent who is not the listing agent for the house that is for sale is one smart way to successfully purchase a home.

There are some bargains on the market

coins
Money

There really aren’t many actual “bargains” in the local housing market but there are some opportunities. There are 111 houses on the market in St. Paul in all price ranges that have been on the market for 60 days or more.

Prices start at less than $90,000.

There are 1311 houses on the market in the five-county metro area that have been on the market for 60 days or more.

Houses that have been on the market and that have not had a recent price reduction can sometimes be purchased for less than the asking price. They are also less likely to get multiple offers.

Homes that are priced right sell quickly with multiple offers for more than the asking price. Homes that are priced too high stay on the market and sellers are offered less than the asking price.

After a house has been on the market for a while sellers are more likely to accept a fair offer.

Happy First day of September

This September the only thing that looks normal are home sales if we compare them with the last five years. I ran some searches for home sales in Ramsey, Anoka, and Washington county. I’ll call it the “tri-county” area, with a mix of suburban and urban areas. When I look at the counties individually I saw the same trends.

We have seasonal peaks and valleys in home sales and home prices too.

If I look at months of inventory in my tri-county area and in January of 2015 we had a balanced real estate market with a six month supply of houses. By balanced I mean that it wasn’t a buyers market or a seller’s market. We have has a seller’s market every month since. Currently, there is a two month supply of homes for sale. In St. Paul there is a 1.8 month supply.

 

chart of home sales and prices
Home sales and prices

I’ll have August home sale numbers for St. Paul up on Monday.

Could this house be a killer?

A couple I knew both died of cancer.   One was 58 years old when he died of mesothelioma and the other was 73 when she died of ovarian cancer.

There’s no known safe level of asbestos exposure, and medical research indicates these fibers can cause severe lung diseases and cancer in 10 to 30 years after the initial asbestos exposure.

They lived in an old house that was renovated in the late 1970s.

The Minnesota department of health website is my go-to place for explaining asbestous to my clients.

People think of old pipes and boiler systems that are covered with asbestos insulation and do not consider the many other places it can be found.

Here are some of the places asbestos can be found in a house:

Adhesives

Appliance components

Ceiling products

  • Ceiling texture (Popcorn texture)
  • Ceiling tiles
  • Ceiling tile mastic

Cement-asbestos board (Transite) products

  • Chimney flue lining
  • Ducts
  • Pipes
  • Shingles
  • Siding
  • Wall panels

Electrical products

  • Cloth wire insulation
  • Electrical panels

Flooring Products

  • Asphalt floor tiles
  • Floor tile mastic
  • Vinyl floor tiles
  • Vinyl sheet flooring (linoleum)

Heating and Cooling System products

  • Boiler insulation
  • Ductwork insulation
  • Furnace insulation
  • Gaskets
  • Heat shields (paper and corrugated cardboard)
  • Pipe insulation
  • Tank insulation

Paints and coatings

Plaster

Roofing Products

  • Base flashing
  • Felt
  • Shingles
  • Tar or “Black Jack”

Table pads

Vermiculite

  • Attic and wall insulation
  • Fireplace decoration
  • Gardening products

Vinyl wall coverings

Wall applications

  • Caulking and putties
  • Spackling compounds

Wallboard or sheetrock

Wallboard joint compound

Window glazing

There isn’t any way of knowing if the house killed the couple and the new owners won’t know anything about previous owners who both died of cancer.
Don’t let this scare you away from old houses. We probably won’t know for a few decades which products that are being used in new construction are hazardous.