In the fall of 2005 when the St. Paul real estate market skidded to a halt, real estate agents cautiously asked one another, "How are your listings going? Are you getting any showings? How about your open houses?" The questions were carefully asked because we didn't want to show our hand. We didn't want to admit to another agent that suddenly we were not getting any showings on our listings. No one was coming to open houses. It was like the real estate market rolled up the sidewalks and locked the doors of business. The market was dead and each of us first thought we were the only ones to have our listings lose traffic.
The previous five years real estate agents in St. Paul had been working furiously to keep up with the fast pace of the market. We barely had time to catch our breath and catch a few winks at night. If we had buyer clients, we had to present an average of four offers before getting one accepted. That meant four times the work for the same commission. It was a frightful experience. Always in the back of our minds was the thought, "When is it going to end? It can't keep up at this pace forever. When will we reach the ceiling?"
The published statistics for the fall of 2005 in St. Paul showed healthy numbers. The problem was the numbers were lagging behind our experience of the real estate market. It didn't take long for agents to commiserate openly together. There was no interest in the houses that were for sale. Buyers had disappeared and we were all taken by surprise. We had hit the ceiling and hit it hard. Because it was the fall, we kept telling ourselves it would heat up in the spring again. But that did not happen. The numbers for 2006 reflected the experience of the St. Paul agents. The real estate market was stonewalling us!
The hard work of convincing sellers they must lower their prices and upgrade their homes in order to sell began. Sellers were stuck in the market statistics of the previous year. Real estate agents had few statistics to reflect what was really happening because the stats lagged behind our experience. We researched by hand to show increases in market time and decreases in prices. One of my listings showed homes dropping prices in $20,000 increments weekly with discounts approaching 25% of the list price! This was another difficult time for sellers and agents alike. Buyers didn't notice because they were all holed up in their homes worrying about where their next mortgage payments were coming from!
So, what does this mean for today? Well, let me tell you what St. Paul agents are now whispering to each other. Over coffee, in the coat closet, at the water cooler, the question now is, "Are you getting a little more traffic this year? How are your listings going? Are you getting showings?" We're asking one another these questions now because it was so quiet the previous two years, that we can't believe we survived to tell about it. Is it possible that we're busy again? Not busy the like feeding frenzy years, but more normal busy? Can it be true that buyers are buying again? Is it possible that we are going to survive? While we're holding our breath and waiting for those statistics to show whether our experience is indicative of the market, a press release is posted by the St. Paul Area Association of REALTORS® with this statement:
Pending sales, a leading indicator of future closed home sales, moved strongly forward from January to February increasing 20.49 percent for the month. There were 3,087 pending sales reported in February compared to 2,562 in January. That is the third highest percentage increase of pending sales from January to February in the past eight years. That rate was exceeded in 04 (21.02 percent) and 05 (33.9 percent).
The entire press release is quite hopeful and seems to reflect what St. Paul real estate agents have been whispering by the water cooler. We're all waiting with bated breath hoping that "normal" is more than a cycle on the washing machine.