So how is the housing market in the Twin Cities? (St. Paul: short sales, foreclosures)

[KristenDuLac]

Hi,

There are some areas that are doing better than others. Overall the market has slowed but single family homes in a good location are still doing well. If you are a buyer, there are some terrific buys out there right now.



Kristen

[K-Luv]

I don't believe all the hoopla regarding the 'housing market' as of the last couple of years, well not in the way that everyone talks about it. Up until the 1990's the median home price was 50% higher then the median income. Now they are like 400% the median income. This is partially due to economics-inflation, the state of the economy, but it is also due to the number of people who bought and sold homes for profit in the 1980's. Real estate was the hot new get rich scheme and many people played it like the stock market.

Now, the Twin Cities has always had a decent housing market, but for the most part that is because of the number of wealthy to upper middle class people that live in the area (which is also why I think that it is wrong to base a cities affordability on the median price of a home).

The Twin Cities are one of the few places in which a person can buy a home and have the income to support the purchase.

[rcsteiner]

Originally Posted by K-Luv

The Twin Cities are one of the few places in which a person can buy a home and have the income to support the purchase.

That's also true of Atlanta (where housing costs are somewhat lower than the Twin Cities, and where various salary surveys show a somewhat higher pay rate than the Twin Cities, at least amoung IT professionals and other similar types of jobs).

[doublesuited77]

from what i have seen, the housing market is moving better than most. Lots of these houses that have been on the market forever are because their owners has unrealistic expectations over the home value.

Across the street from me, a couple bought a house 2 years ago for 515K. They have it on the market now for 599K. It has been on the market for 5 months and this couple complains about a bad housing market. Apparently, they had an offer a few weeks ago for 560K and they didn't even respond to it.

[Jeanie Hoholik]

That's just plain nutty! Their Realtor needs to educate them about today's market. Most Realtors these days are looking at the competition that's currently on the market. In the past, we would look at what was sold in the last 6 months. That's just not feasible, since not many houses have sold and the prices are lowering. If that was my client, I'd de-hire myself.

[dangelofnb]

Okay,
I'll bite on this one. The market is the market. Have you ever seen any market shoot straight to the top right corner of the chart? My goodness, it's really a normal market in recovery of a series of over zelous investors and lenders. Anyone who put pen to paper without any equity in the past few years are upside down on their investment. It's that simple, it's that normal. We just haven't seen this type of market in over 15 years here in MN. Yes some realtor mod cut will come by and suggest it's a great time to buy. Not sure about you, but I would rather buy something when the line is not near the top right corner of the chart. Or maybe wait to see if the bottom of the U gets wider or maybe even drop some more? Needless to say, if you're considering a lateral or step up move and you have equity (conventional), it couldn't be a better time to purchase what 95% of Americas wealth is sitting on and that's REAL ESTATE!!!

[dangelofnb]

Jeanie, you're being too nice in de-hiring yourself. Firing the client feels better to me

[OH2MN]

Originally Posted by doublesuited77

from what i have seen, the housing market is moving better than most. Lots of these houses that have been on the market forever are because their owners has unrealistic expectations over the home value.

Across the street from me, a couple bought a house 2 years ago for 515K. They have it on the market now for 599K. It has been on the market for 5 months and this couple complains about a bad housing market. Apparently, they had an offer a few weeks ago for 560K and they didn't even respond to it.

Thank you for calling out what I've been seeing in my 4 months of observing this market! As far as I can tell from reviewing the data, this market was just on fire from at least 4 years back, up until about 10-12 months ago. Since then it's been moving downward just as smartly as it moved upward in 2003-2006. Only it's moving in the minds of the buyers, but not the sellers, who continue to feel that they are "owed" whatever the market would have brought at its peak. As a result, the market has come to a virtual standstill. Transactions are occuring at 1/10 of the "normal" rate (that might be a bit of an exaggeration -- anyone know the real numbers?). Not because there aren't buyers like myself in the market. But because reality hasn't caught up with the sellers.

I'm living on both sides of this, by the way, with a house in Ohio listed for sale that's not moving. But I've held my house for 7 years, not 2. And I've already written off 50% of the "paper profits" that I made on the house in 2002-2005. By all reports my listing price isn't the problem. Apparently, in the Cinci market people are so nervous that they are not buying AT ALL. The number of "real buyers" is paper thin. The only folks out there in numbers are the speculators, looking to buy distressed properties and flip them within a year at sharp mark-up.

Or maybe I'm just bitter? Anyone want to trade a downtown Minneapolis 3 bedroom condo for my NE Cinci suburban home? Both properties in the $400k - $500k range -- give me a holler!

-Bill W.

[doublesuited77]

Originally Posted by OH2MN

Thank you for calling out what I've been seeing in my 4 months of observing this market! As far as I can tell from reviewing the data, this market was just on fire from at least 4 years back, up until about 10-12 months ago. Since then it's been moving downward just as smartly as it moved upward in 2003-2006. Only it's moving in the minds of the buyers, but not the sellers, who continue to feel that they are "owed" whatever the market would have brought at its peak. As a result, the market has come to a virtual standstill. Transactions are occuring at 1/10 of the "normal" rate (that might be a bit of an exaggeration -- anyone know the real numbers?). Not because there aren't buyers like myself in the market. But because reality hasn't caught up with the sellers.

I'm living on both sides of this, by the way, with a house in Ohio listed for sale that's not moving. But I've held my house for 7 years, not 2. And I've already written off 50% of the "paper profits" that I made on the house in 2002-2005. By all reports my listing price isn't the problem. Apparently, in the Cinci market people are so nervous that they are not buying AT ALL. The number of "real buyers" is paper thin. The only folks out there in numbers are the speculators, looking to buy distressed properties and flip them within a year at sharp mark-up.

Or maybe I'm just bitter? Anyone want to trade a downtown Minneapolis 3 bedroom condo for my NE Cinci suburban home? Both properties in the $400k - $500k range -- give me a holler!

-Bill W.

I think January will be quite telling. Normally a ton of homes come onto the market in Q1 (since lots of people wait until after Xmas to move). If there isn't significantly more inventory on the market in four weeks, then we will know there is a serious issue.

[StPaulEastSider]

The fallout of the Twin Cities Housing Market from state-income and prime mortgages will not be fully apparent until 4th qtr of 2008. That's when the last of the mortgages written under the now-unlawful stated-income mortgages will hit the market.

For example, I know of a house on Maryland Ave in St. Paul. Built circa 2004. Never sold, never lived in. July 2007, the month prior to the Aug 1st cutoff for stated income mortgages, the house sold. The price listed for the sale [on Zillow] is exorbitant, given the market last July. But as far as the neighbor 2 doors down knew, the house never changed hands, and is still not lived in. The original builder told the neighbor in October that the house is now headed for foreclosure. My guess is the original builder had a straw buyer over appraise the property and push through a "sale". The buyer never had any plans to live in the property or even make a single payment on the new mortgage - which is why the house is now headed for foreclosure.

Multiply this scenario hundreds of times... I think the worst is yet to come.

On the other hand, Minnesota passed one of the toughest mortgage lender laws, which went in force on Aug 1 1007. This might slow the flood of fraud in MN and help to protect the market over the long haul.