Listing agents are looking good

I remember back when I started in real estate some 20 years ago. How quickly we could sell a house was an important part of marketing. If the last 20 years have taught me anything it is that there are many variables that affect how quickly it takes to sell a house.

There are numerous ways that a homeowner can slow down a sale. Sometimes they need to limit when the house can be seen or maybe they have an unrealistic price or maybe the house smells.

These days houses sell very quickly. In fact, I think our company average is less than a day if we include properties that sold while they were still “coming soon”.

Houses are not considered sold until the sale closes so when I say they sell in a day I mean that is how long it takes for the seller to get offers and accept an offer. The only thing that really slows the process is waiting for the owner to give an answer.

This leads me to question if agents should really be taking all of the credit for selling houses quickly.

The median days on market for May 2021 in Ramsey county was 6 and the average was almost 19 days. Those numbers typically include inspection periods.

Buyer’s agents don’t look as good. It is common these days for buyers to make offers on a few houses before an offer is accepted and sometimes the house gets sold before anyone is allowed to tour it. It doesn’t take long to get frustrated with the whole process and your agent too.

The housing market won’t be this way forever. The agent who sold houses in a few days this year probably needed six months to sell a house in 2009.

Higher prices leave buyers out

Over the years I have joked about not being able to afford to buy my own house.  In Minnesota, the household income needed to qualify for a median-priced new home is $85,700.  The median is around 300K and to be honest, in many communities around the metro area 300K is entry-level.

Back when we bought our house we could not have afforded a 300K house. At the time interest rates were more than triple what they are right now. Prices are starting to cancel out those low rates in affordability calculations.

Here is a look at Ramsey county median home sales prices. Granted 2011 was not a stellar year but median prices peaked just before the crash at around $220K in 2006 the county.  It should be noted that home prices may not have reached their high for the year.

Rasey county home prices
Home prices in Ramsey County

May home sales by neighborhood

table of home sales
May home sales by neighborhood for St. Paul, MN May 2021

There aren’t any surprises in this month’s data. The last time we had as many listings and sales in a single month in St. Paul was last October. The prices are kind of surprising. The averages in some of the affordable neighborhoods have become unaffordable.

Low interest rates are helping to make housing more affordable but we may be reaching the point where the low rates are not enough to make up for the high prices.

In every neighborhood except for downtown sale prices were higher on average than the asking prices. That is an indicator that prices are still climbing.

The current real estate market continues to strongly favor home sellers with no end in sight.  The seller’s market will start to soften when either the demand for housing goes down or the supply goes up or some combination that will result in more housing.

The data used to make the table is from the NorthstarMLS which is deemed reliable but not guaranteed.

For more local numbers please see Local Market conditions & home prices

If you would like to know how much your home will sell for please call or write for your free no-obligation market analysis.

Wanted, Minnesota homes for sale

Infographic of MN housing market
Minnesota housing market

The graphic is a bit misleading with all of those arrows pointing up. I would not describe the current housing market as healthy or good. It isn’t surprising that home sales and new listings are up from a year ago when we were under a  pandemic lock-down. In some parts of Minnesota, there was a 70% increase in home sales. In the seven-county metro area, sales are up 9.4% from April 2020, new listings are up 24% and prices are up 7.4%. Southwest Central MN saw a decline in home sales.

It is surprising though that the number of homes on the market has dropped by 52% since last April leaving us with a one-month supply. In April of 2020, there were 17,634 homes on the market in the state, in April of 2021 there were just 8,519. There were also over 22000 Realtors in Minnesota in April.

It will be interesting to see how the year shakes out. I predict that the number of homes on the market will go up in the second and third quarter as people have more confidence in vaccines and in the economy.

If you have a house you are interested in selling we do have plenty of buyers.

 

Is it a good time to rent?

In real estate, we are fond of saying; “Now is a good time to buy”, but there have been better times to buy like in 2009 for instance.  Even though interest rates are low prices are sky high and rising and there is a scarcity of homes for sale.

A couple of years ago it was actually cheaper to buy than to rent. I have some clients who took advantage of that and are now homeowners.

Right now the vacancy rate in St. Paul for rentals is somewhere between 5.5 and 6%, which is up from less than 3% two years ago. Renting might also be a better option for people who really want to move this year.

As of 2019 about 51% of St. Paulites were renting.

Bleeding heart

 

April 2021 home sales by neighborhood

The local housing market can best be described as fast. As is typical in April the number of new listings went up. April is one of the peak months for home sales. The average number of days on market is slightly less than 26 days. Overall April home, sale prices were higher than the asking prices.

The housing market in St. Paul is a strong seller’s market. Buyers continue to pay top dollar as they attempt to outbid other buyers. Low interest rates are contributing to rising prices.  Downtown St. Paul is the exception and is a buyers market. Home prices in most of the city continue to rise. Home prices often peak in April and May.

april 2021 home sales
April Home Sales in St. Paul

The data used to make the table was exported from the NorthstarMLS which is deemed reliable but not guaranteed. A high percentage of houses sold in St. Paul are listed on the MLS. The numbers include single-family dwellings, condos, and townhouses.