Prior to 2006, real estate agents were like spinning tops in the real estate market. The first 5.5 years of this century showed records in real estate sales until the sales abruptly halted in the fall of 2006. January and February, 2006, had median price increases of around 10%. Those two months are historically slow in St. Paul real estate so an increase of 10% in median price was a significant jump. Four months in the beginning of 2006 had strong increases in median price which counterbalanced the sudden end of the St. Paul real estate boom. The 2006 year end median price still showed an increase of 1.64% despite the end of escalating prices.
The Ramsey County figures published by the Regional Multiple Listing Service in January showed a decrease in the 2007 annual median price by 3.93% (almost 4%) as compared to the 2006 year end figures. For Ramsey County, a drop that large in median price is significant. The consumers felt it. The overall number of closed sales in Ramsey County dropped by 17.39% and the dollar volume of closed sales also dropped by 18.38%. Unlike 2006 where the dollar volume of closed sales still increased, the 2007 decrease in dollar volume of sales reflected the actions taken by sellers to sell their homes. Sellers who had to sell last year, slashed their home prices in a rational effort to attract buyers.
Whereas the median price decrease seems gloomy, it really isn't as terrible as it could be. Many areas throughout the nation experienced double digit decreases in median price. Because our economy is relatively stable in the St. Paul area, we took a smaller hit than other parts of the nation. Sellers who bemoan the "loss" on their sale are experiencing an equally good, or better, savings on their next purchase. The market definitely is not what it was in the first 5 years of this century, but we really are doing okay.
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