The high price of waiting for perfection

porchI am never going to say that “now” is a good time to buy a home or to sell one. There just isn’t one “now” that is best for everyone. However, over the years I have observed how much it can cost to wait for the perfect time, price and house.

Holding out for that perfect house in the perfect location that is a bargain can mean an extra decade of paying rent, as it rises each year while trying to save for a downpayment and missing out on building equity.

People who bought houses when interest rates were high generally paid less and refinanced later on. There are no guarantees when it comes to buying a house but most people need a place to live and in the long run, people who own real estate are able to build more wealth than those who do not own real estate.

There isn’t ever a perfect time to buy a house or to sell one.

There are seasonal variations in home sales

As we head into Fall we should see fewer houses on the market not that there are all that many on the market now. I mention this because the number of houses sold and the prices does fluctuate by season and we don’t want to confuse seasonal fluxations with those due to a changing economy.

These charts always look like roller coasters and this one shows how many houses are on the market or were on the market at any time during the last five years.  There are peaks and valleys. The local market is past the peak for the year and headed for the valley.

This seasonal fluctuation can mean opportunities for home buyers because they may be competing with fewer home buyers. Sellers can still count on a quick sale and prices are still going up.

Chart - MLS data
Homes for sale by month

There is a 1.3 month supply of housing in St. Paul

During a balanced housing market, there is a six-month supply of housing for sale. During a buyers market, the supply skews to

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a supply that is greater than six months. During the housing crash which was a strong buyers market at times, there was a 10-month supply of housing on the market.

During a strong seller’s market, there is less than a six-month supply. Right now in St. Paul, there is a 1.3-month supply which indicates a strong seller’s market.

Some parts of the country might be experiencing a balanced market or even a seller’s market but that doesn’t impact the strong seller’s market in the Twin Cities.

During sellers, market houses sell quickly, and often they receive multiple offers. Look for prices to continue to rise this year due to the high demand for housing.

Housing supply is a measure of how long it would take to sell all of the houses that are on the market if buyers keep buying at the same rate.

Most of the news about the real estate market comes from the coasts and may not apply to our local market in the Twin Cities.

Marketing 101 – fresh photographs

Sometimes I take pictures of houses and gardens during the summer or fall so that when they go on the market in the winter I have some colorful and enticing

pictures to use for marketing.

Back in the days when it took a few months to sell a house, I would take new pictures of the outside if the seasons changed while the house was on the market. At a glance, the home would look like it just came on the market.

Right now I can easily spot houses that have been on the market for months because of the snow banks in the pictures. They may be great properties but buyers may assume that there is something wrong because the property has been on the market for so long.

Updating exterior pictures is a simple and inexpensive way to update the marketing for a home that has been on the market for a few months. Potential buyers will notice it all over again and who knows they may even make an offer.

 

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Buying “as-is” is sometimes misunderstood

Maybe you are looking to buy a house or you want to sell one. You have heard of buying or selling “as is”. It just means that what you see is what you get and that the seller will not make nay repairs or changes.

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It doesn’t mean that the buyer can not have an inspection. A complete home inspection is necessary and part of the home buying process. In the case of “as-is”, it is even more important.

Buyers have the right to know what they are purchasing as-is. Sellers will not make repairs but if the purchase is inspection contingent the buyer can cancel the purchase.

If buyer inspections are not allowed my advice is to pass on the house because it may need expensive repairs. Government entities and corporations sometimes sell houses and will not turn the utilities on so that the house can be inspected.

Selling “as-is” does not give the owner permission to deliberately hide property defects, nor does it protect them from lawsuits.

Corporations and government entities that sell real property do not always fully understand what “as-is” means and may prohibit inspections or hide material facts.

Several municipalities including St. Paul require truth in housing or tie of sale inspections. Selling as is does not mean that the house is exempt from such inspections.

In a general way, all houses are sold as-is. If the buyer has an inspection and the homeowner makes a repair the house is then sold “as-is”.