The housing market crash of a decade ago seems like a distant memory for many. Home prices hit their lowest in more than a decade in 2011. Those who bought a house that year could make a lot of money selling it this year.
Median home prices in St. Paul have more than doubled since March of 2011 when they were 95,000. Median sale prices are currently $250,000. We were in a strong buyer’s market at that time.
March home sales were fast in St. Paul with an average of 31 days on the market. There were about 50 homes that were on the market as active listings for less than two days. The average sale price was higher than the average listing price and I took a deep dive into the numbers to check and see if the original asking price was higher than the final sales price and discovered that original asking prices were slightly higher than the final sales price.
I looked at these numbers partly because some local agents are changing, the listed price after offers are accepted. The price is being raised when the offer is significantly higher than the asking price.
The shortage of homes for sale continues and with the high demand, prices continue to rise. The median home sale price in St. Paul is around 285K. As buyers compete with each other and bid up the home sale price. It isn’t unusual to see offers the are 15% higher than the original asking price. Some of the houses are appraising for less than what the buyer is offering.
There are various downpayment assistance programs for first-time homebuyers. Most are aimed at specific neighborhoods and that is likely driving up the prices in those neighborhoods. The programs are supposed to help home buyers but they end up helping homeowners by driving the prices up.
The real estate market is fairly stable in downtown St. Paul and there is plenty of inventory. As the pandemic winds down and businesses operations with fewer restrictions I expect to see buyers flocking to downtown to take advantage of a buyers market. Right now almost a third of all of the residential real estate for sale in St. Paul is located in downtown St. Paul.
The data in the table above was extracted from the NorthstarMLS and is deemed reliable but not guaranteed.
The number of Realtors has increased in the last year by 4.8%. Realtor is not an occupation. It denotes people who belong to the National Association of
Realtors and right now there are 1.45 million of us, which is an all-time high. Not all members are real estate salespeople. Some are in real estate-related careers, some are retired, real estate agents.
Considering that about 4.8 million or maybe 5 million houses will be sold in the US this year it seems possible that right now there are more Realtors than there are houses for sale. I can’t find a number for how many real estate licensees there are in the US.
In the local market, I am sure there are more Realtors than there are homes for sale. There are real estate offices that have 100 agents and 20 listings.
Getting a real estate license is fairly easy to do and inexpensive. It takes about six weeks. New agents start out charging the same rates that experienced agents charge.
The failure rate among real estate agents is very high. Everyone knows someone who “tried it out” and then quit. If you plan on working with a real estate agent to sell your home you should be able to negotiate a lower commission. Being a buyer’s agent right now is extra tough because each buyer may need to make an offer on a few houses before one works out.
The current housing market is unique. I feel strongly that we will need to build more housing preferably affordable housing to end what I believe is a housing crisis.
If you were planning on getting a real estate license this year and go into real estate sales expect a lot of competition from experienced and inexperienced agents. Real estate agents are self-employed and without benefits and have bills to pay even when there isn’t any money coming in.
The last few weeks have been crazy. There are not enough houses on the market to keep up with the demand. There is still a pandemic and as a result, we have to make sure to only allow one or two people to tour a house with their agent at a time.
Houses go on the market and are listed as coming soon. That gives us plenty of time to make appointments. By the time the house comes on the market, it may already have an offer or two on it and it may also be booked so that no one else can see it.
There are people who make offers without seeing the property. Some homeowners will not entertain offers from people who have not toured the property.
For the last few years, buyers have been making their offers more attractive to sellers by skipping the inspection contingency. This year they are skipping the in-person tour.
Sellers can only accept one offer. Houses will only appraise for so much and there is a limit to how much cash buyers will pay. The sky isn’t the limit when it comes to how much a given house will sell for.
In fact the more offers there are the more complicated it gets.
Real estate agents will advertise that they got offers on a house in one day and that is sold for X amount over the listing price. This is fairly common and actually has more to do with the current housing market than it has to do with the performance of individual agents.
The shortage of homes for sale is acute. I know a few people who want to move this year but they can not find a house to buy so they stay where they are.
Home prices continue to rise while interest rates remain low and home buyers continue to chase opportunities to buy a house. Buyers who wait for price reductions or open houses will miss out.
I have never seen anything like the current housing market. We really are in uncharted territory.
February was another wild and crazy month for home sales with buyers making offers before some homes were available for tours. All over the metro area, there have been multiple offers on homes for sale and some sellers are getting 10% to 15% over the asking price.
On average homes sold in St. Paul sold for more than the asking price. The neighborhoods with the lowest home prices saw the biggest gains in median prices.
As some St. Paul residents move to the burbs for larger houses with larger yards the houses they are leaving behind are selling quickly. There is no evidence of a mass exodus from the city.
As the pandemic winds down we are likely to see more houses go on the market but I don’t think the supply will come close to keeping up with current demand.
2021 is going to continue to be an amazing year for home sellers. The number of homes for sale continues to hit record lows across the county. Low inventory of homes for sale has been a challenge for the last several years but was made worse by the pandemic.
The laws of supply and demand have been at work keeping housing prices at all-time highs. The neighborhoods with the lowest average prices have seen the most gains in the last two years.
The median sale price in St. Paul is $240,000. 259 home sales closed in February.
The numbers used to make the table were extracted from the NorthstarMLS the data is deemed reliable but not guaranteed and it represents a high percentage of the single family homes sold in St. Paul in February 2021. The data includes townhouses and condos.
Real estate is local, so local that I like to drill down to the nighborhood level.
The best word to describe the January 2021 housing market is “fast”. For the second month in a row, there were more pending sales than new listings. Housing is in demand and it is selling quickly. If only there were more houses available to buy.
The median sale price is up from December. The number of days on the market was up slightly from February but stands at about 37 days. Overall Asking prices and actual sale prices are very close.
Our seller’s market continues except in downtown St. Paul where the market is balanced with a six-month supply of housing. The last time there was a six month supply downtown was in June of 2013. The rest of the city has less than a two month supply.
The numbers used to make the table are from the NorthstarMlS and are deemed reliable but not guaranteed. Most homes sold in St. Paul are listed on the MLS. For more local real estate numbers see: Local Market Conditions