August home prices and sales by neighborhood

August went way too fast, and we are already into the double-digit dates of September. Home sales have started to slow in a kind of September way. Great news for those who want to buy a home this year.

The inventory of homes on the market is slowly creeping up but still very low by historical standards.

table with home prices
August 2018 Home sale numbers – St. Paul, MN

In the green shaded areas in the far right column are to highlight the fact that the average sale price was higher than the average asking price for the neighborhood and for the whole city on average.

We are also starting to see more price reductions. It will be interesting to see if September home sale prices in St. Paul are still higher than the asking prices.

The numbers used to create this report were exported from the NorthStar Mls, which is deemed reliable but not guaranteed.  Once exported the data is imported into MS excel where it is gently sorted but never stirred.

The data includes single family homes, townhouse, and condos, located within the city limits.

For more local real estate numbers please go to Local market conditions & home prices.

Always be wealthy

We can learn from history and we should but usually, we forget what happened in the past and we really don’t learn from it.

We all should have learned from the great recession and the housing market crash that it is best to be wealthy. The wealthy recovered from the recession but the poor did not. Large banks were bailed out but homeowners were not.

I feel fortunate that all we lost was one income and some savings. We still have our home and as soon as the local housing market turned around in 2012 I paid off the mortgage.

The worst year for us financially was 2011 and that was the year home prices and the number of home sales hit bottom.

The rest of my family wasn’t so fortunate. Some lost homes and others graduated from college during the recession and struggled to find work and pay back student loans.

Here is a snapshot of the last decade of the housing market in St. Paul. The only part of the chart that looks “normal” to me are the years 2012 and 2103. Maybe the rest of it is the new normal. I hope not because homes for sale are in short supply and are unaffordable for many.

chart, median prices and homes for sale
St. Paul housing market 2008-2018

There will be a buyers market again. Some predict it will start in 2020. The chart is a great illustration of our current market with supply going down and prices going up.

multiple offers or bidding war?

From Flickr commons WWI

Ah yes, it is fun to play with words. When see, hear or read news reports about the housing market they report that there are “bidding wars”.

Using the word “war” adds an extra element of drama to the situation and probably makes the winner feel extra special.

In real estate offices and when talking with our peers we talk about “multiples” everyone knows what we mean when we say “it sold with multiples”, or “we got multiples”.

No matter what it is called competing with other buyers happens when buying homes in St. Paul. Buyers need to know that they may not get to negotiate. The sellers will accept the best offer so it is important that buyers make their best offer.

Buyers who win and have their offer accepted should say that they won a bidding war. Buyers who loose out should say that they lost out in multiples. 🙂

Sellers who are expecting multiple offers but are not receiving them should revisit the asking price, the decor, the condition or all three.

Downtown real estate is slower

When putting a home on the market it is important to know what to expect. Real estate continues to sell briskly and some properties do get multiple offers the first day they are on the market.

Condos in downtown St. Paul do not sell as quickly as other types of real estate. That just means that sellers need to be prepared to have their unit on the market a little longer.

The “little longer” isn’t long at all. There are currently 48 condos on the market downtown and the median days on market is around 33 days. The units that are priced for over half a million sell at a slower rate and they always have.

Downtown St. Paul condo sales

To arbitrate or not

In Minnesota home buyers and sellers are required to decide if they want to use binding arbitration to settle future disputes over real estate they are buying or selling.  New this year, arbitration will only apply to claims for more than $15,000, smaller claims should go to conciliation court.

This year 20 pages have been added to the Minnesota purchase agreement explaining arbitration. The purchase agreement without the arbitration disclosure is 13 pages long after a page about wire fraud was added on August 1st.

Home buyers and sellers should be prepared to learn all about arbitration. It is a Minnesota thing.

After reading all of the pages of the arbitration disclosure my understanding of it is about the same as it was before I read the 20 pages. There is something about that legal style of writing that makes it hard to follow.

Going forward I think I will give my clients the arbitration disclosure early on in the process because consumers need to understand arbitration and make an informed decision.

It is also important to learn about lead-based paint, we have a pamphlet for that and about radon, we have a disclosure for that.

Arbitration – from the Minnesota arbitration disclosure

Don’t leave town

Home buyers who are serious about buying a home this summer should consider staying home. Homes come on the market on Thursday and collect offers over the weekend.

There is about a 5 or 6 week supply of homes on the market in St. Paul right now. There are about 540 homes on the market in St. Paul right now which is about 100 more than a month ago.

If there were four times as many homes on the market there would still be a shortage of homes for sale.

Homeowners who would like to sell do not need to wait until spring. There is no end in sight for this trend.

supply of homes for sale