Real Estate Snippets

Real Estate Snippets Is Honored

Today's post was supposed to be another one of those statistics things with boring facts and figures about St. Paul until I opened the welcome screen on Typepad (scroll down to the middle of the screen) and found my funny face staring back at me! 

I knew it was coming.  They asked permission.  I thought they randomly chose blogs to feature by pulling the blog names from a hat.  That obviously is not the case this time, because the person who featured Real Estate Snippets actually went into its archives and READ it!  They actually READ it!  The highest praise of all is that they READ it!

I feel like a chicken who's just laid a nest of eggs!

 

I feel like everyone is watching me!

I'm bowled over and humbled and thrilled and doing a jig!  And like always in a REALTOR's® life, it comes on a day when I'm busy as can be!  So for now, here's a high five to share with me! 

Thanks for the honor, Typepad!

 

2007 Ramsey County Real Estate Numbers

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.

The Cycle Is Complete

It's been 14 years since I entered the real estate business.  Fourteen years that have flown by.  My first forays into real estate were through the zero down seminars that most REALTORS® scoff at.  Prices were low when I started the business.  It was a perfect time to be a rehabber.  The journey into rehabbing (buying distressed properties and fixing the homes up for resale at a profit) taught me much.  It was harder than I thought (Of course the TV guys made it sound VERY easy.) and eventually the sales side captured my interest.

Old timers in the business warned me that real estate goes in cycles, usually around 15 years.  Also, they cautioned, real estate is not an island unto itself.  It impacts other aspects of the economy and other aspects of the economy impact it.  Now that 14 years have passed, it seems the wiser and older agents were right.  Prices went up, and prices have come down.

Never did I expect to once again see homes listed for under $50,000 like we had in the mid-1990's.  Recent client searches have been producing some pretty good homes for less than $200,000.  Would it be possible to buy something for under $100,000?  The MLS produced an answer.  Tonight there were 335 homes listed in St. Paul for $100,000 or less.  Of that 335 homes, 61 were $50,000 or less. 

The cheapest St. Paul home was $13,500!  Granted, many of the homes under $50,000 are category 2 vacant buildings which means they need an entire code compliance to bring them back to livable condition.  Thousands of dollars are needed for a code compliance project, so those homes may not be good options for normal real estate shoppers.

Based on my search tonight, it may be that affordability is returning to the St. Paul real estate market.  Below are the number of active St. Paul listings in each price break:

There are lots of housing choices for St. Paul buyers in the lower price ranges.  There are lots of choices for investors who want a rehab project.  If you've been toying with buying a home, now might be the time!

Winter Carnival Parade

Know Thy Market

The real estate community has been in an uproar this week regarding the lawsuit brought against a REALTOR® by a buyer client.  The purchase was made in Carlsbad, California.  The buyers, Marty Ummel and her husband, are charging that the real estate agent did not inform them they were paying too much for their house. 

Making judgments about a case like this based only on what is published in the newspaper can be dangerous, but having read the New York Times rendition of the situation brought several questions to mind.  As a real estate agent in St. Paul, it's important that I show my buyer clients as many homes that meet the buyer's criteria as they want to see.  IF there are other homes in the same development, or the same general neighborhood, that are comparable and priced less, I will suggest we see those St. Paul homes to compare with the buyer's chosen property.  It's just generally good practice to check out the competition, especially if the price is less.  If the buyers don't want to see the competition, it's wise to at least show them the listings before structuring the offer.  In the Ummel case it does not sound like this happened.

The second thought that struck me from the New York Times article is that the buyers had already fired one agent and backed out of two offers.  Those two actions combined would make me question the wisdom of working with these buyers.  Is it possible their expectations were unrealistic?  The possibility exists the agent might have been a bad agent, but backing out of two other offers combined with firing an agent is unusual.  My gut instinct would be to seek more information before representing them.

A third question is why the buyers were working without a buyers' representation contract.  In Minnesota a written contract is required to create the agency relationship with the client.  Without that contract, the agent may have been representing the best interests of the seller.  More information is needed regarding this.

My last impression from this article is that the reporter is trying to make the problem seem a result of the real estate market crashing.  The few facts delineated in the news piece stated that there were other houses on the market at the time the offer was written that were cheaper, not that the house lost value after they closed.  That is an entirely different slant than the implication that REALTORS® should be able to use their crystal ball to predict whether home prices will go up or down.  At no time would I be able to predict what the St. Paul real estate market is going to do next month.  All a real estate agent can do is look at history and speculate based on history.  Speculation is little more than an informed guess!  It just isn't a crystal ball.

Car Shopping

My list of features needed in a car are quite simple.  It had to be front wheel drive (The only rational choice for driving in snow.)  It had to be automatic transmission (Afterall, talking on the cell phone, checking addresses, applying make-up and shifting are too many tasks to juggle at once.).  It had to have four doors for carting around home buyers.  I preferred leather seats (so real estate clients can eat in my car with no concerns about spilling), but that was a want, not a need.  The final criteria was that it could not be blue and even that was negotiable.

What I really wanted was a Mustang (no front wheel drive and it's really just for reminiscing as the Mustang is the car my husband traded to marry me) or an Eclipse (Don't get me started on how pretty they are!). 

What I wanted to pay wouldn't buy a Lincoln.  What I got was an Altima.  Not the Camry I went to buy and not the Accord that I thought I'd end up with.  An Altima?  One sales pitch said Altimas now hold their resale value even better than Camry's.  "Just check the Consumer Reports articles we've got posted on the wall."  Pushy salesman.  I didn't care to read the reports.  I just wanted to get out of his territory. 

Ultimately the car salesman made the difference (We went to the first salesman that listened to what our criteria was.).  The headroom decided it all.  The price was important but in the final decision the car was one year older, the same price, but a little smoother ride and I didn't clunk my head when I got in and out.

Just like my St. Paul real estate buyers, now that I've made the choice, I'll probably do the research to justify why I bought this car instead of another in the same price range.  That way I can look like my decision was intelligent rather than emotional.

Define Professional

There are all kinds of things that make me "go hmmmmm".  Another funny one happened this last week. 

A member of a private list serve of real estate agents (thousands of members) used the term "fuggly and unprofessional" to describe another member's website.  I was familiar with the website in question.  It has lots of good information a consumer might want to know when relocating to that agent's community.  The website owner is a seasoned and professional agent who's a little quirky like me.   

Because I knew the website in question, I wondered what "fuggly" meant.  It was a term new to me.  Google, the great researcher, helped me find the definition:  "f***ing ugly"!

Now I don't know about other people, but using the term fuggly to describe another's website because one thinks it is unprofessional, isn't exactly a professional description!  It's one more example of the pot calling the kettle black!

Ethnocentricity

Ethnocentricity is a big word.   According to Dictionary.com there are two definitions for ethonocentricity:

1.  the belief in the inherent superiority of one's own ethnic group or culture.

2.  a tendency to view alien groups or cultures from the perspective of one's own.

The first definition does not apply to me in this post (and hopefully in no other posts!), but the second is the definition my Canadian friends used with disdain when describing people from "the States" and their view of the world.  I had to admit my guilt in viewing the rest of the world from the perspective of my own culture.  It was pretty hard not to when I was so comfortable in flyover land just minding my own business and not needing to solve the world's problems.  I never thought about our interdependence in my younger days.  It existed, yes, but learning all about finance and the world and interdependence and . . .  Well, it was too easy to cop-out with laziness.

With ethnocentricity as the focus of my thought processes, it became a surprise that the U.S. subprime mortgage fiasco has impacted much more than just the St. Paul real estate market or the Midwest's real estate market or even the entire U.S. real estate market (I'm really painting with broad brush strokes, now!).  Since stocks and the market are a foreign language to me, realizing that the annual meeting of the World Economic Forum in Davos, Switzerland, January 23-27, will be in the least bit interested in the U.S. subprime mortgage fallout raised my brows.  Someone else is suffering because of our "stupidity" (You can insert any number of other adjectives that fit.)? 

Reading "Global Risks 2008: A Global Risk Network Report" revealed that not only did the subprime mortgage crash impact the U.S. but the world economy as well.  "In early 2007 many expected that any systemic crisis would be the consequence of an unwinding of global economic imbalances – notably the US current account deficit. The actual trigger for the current systemic crisis was the collapse of a critical segment of the US mortgage business – the subprime mortgage market." (page 8 in the Global Risks report).  If the entire report is of interest you can read it at the link above.

The bottom line of the report is what I've become more and more aware of in recent years.  It's a principle I wish I had learned in high school economics.  We are all globally interrelated.  When the pebble drops in the pond, there are many waves that radiate from it.  In like manner, what happens throughout the world impacts others throughout our globe financially, politically, and socially.  We no longer are a world separated by much space.  The globe is getting smaller and smaller because of our interdependence.

St. Paul Winter Carnival 2008

It's time for the Vulcans to get rid of King Borealis so spring can return to St. Paul.  "Say, what," you ask.  If you're not from St. Paul, it's hard to understand why a bunch of usually quite normal people begin acting quite goofy and off their rockers around the end of January.  They start going out in the cold, and today that's a brave endeavor with below zero temperatures. 

The first foray into the cold comes about when the St. Paul Pioneer Press publishes the first clue for their great medallion hunt.  Medallion hunters are fanatics.  The clues are published just after midnight and many are already camped in parks around Ramsey County waiting for a phone call from co-conspirators who read the clue to their cold comrades.  Many, in this day of wireless internet phones, don't even need a co-conspirator's help.  They just check their phones from the park.  Let the digging begin.  Shovels and lights in hand, the medallion hunters burrow about St. Paul night and day looking for the elusive medallion.  Early this morning when the temperature was in double digits below zero the first clue was published.  You can find it here.

The 2008 snow sculpture contest almost didn't happen for lack of funding to make the snow blocks.  The Vulcans, however, solved the problem with lots of volunteer labor and the grand idea to move the snow sculptures to the State Fairgrounds where snow is already piled.  The snow sculptures will be there next weekend.

There will be a golf tournament on the ice of White Bear Lake, ice sculptures in Rice Park, Chinese New Year performances, a hot dish contest (ya, you betcha!), parades, coronation, many opportunities in the Landmark Centre, the US Figure Skating Championship at the Xcel Center and so much more.  The schedule can be found at the official Winter Carnival website.   Check it early so you don't miss anything!

Great Rivers Parkasaurus

St. Paul has been experiencing below zero temperatures this week and even though we're a hardy bunch up here in the cold Northland, we still dream of lazy summer days when it gets cold like this. 

Great Rivers Parkasaurus is the perfect reminder of our long awaited summer days.  We love the water of our great Mississippi and St. Paul's beautiful walkways and parks that allow us to enjoy the great river.  Here, on the sides of this great dinosaur created by Josh Porter from Avalon Studios for the St. Paul Riverfront Corporation are some seasonal depictions of our beloved river.  Remember to click on the picture to enlarge it.