Market Conditions in 55105>Question Details

Firsttimerstp, Home Buyer in 55104

so I know none of us are fortune tellers, but what kind of appreciation should I expect on a home I'm buying this month?

Asked by Firsttimerstp, 55104 Thu Apr 1, 2010

I'm buying a condo in Saint Paul, MN and I'm just curious about what trends experienced people would expect over the next 5-10ish years in terms of appreciation in home value. I'm in Saint Paul, but I'd be interested to hear what people from anywhere would expect!

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15
Since you bought in 2010 I would imagine you are doing great!! What neighborhood did you end up buying in?

Best wishes!!
0 votes Thank Flag Link Thu Dec 5, 2013
To put a number on your gain in property value over the next few years would be very difficult. Instead what you should feel either good or bad about is what you paid for your property per square foot based on comparables. Are you at the upper or lower end ? I would not feel confident in saying any number for a gain in the next several years.
0 votes Thank Flag Link Sat Nov 9, 2013
4 to 5 percent next year.
0 votes Thank Flag Link Sun Oct 27, 2013
I think condos will continue to do well here in St. Paul, especially if they have a garage. Like everywhere else, we have an aging population looking to downsize and to not have to deal with exterior upkeep. You Are buying in a desirable area. Just make sure your HOA stays on top of things, doesn't defer maintenance and has reasonable reserves.
0 votes Thank Flag Link Thu May 16, 2013
I wouldn't expect anything. The economy will either recover, hold steady, relapse, or go through wide swings.

The future is uncertain, and it doesn't much matter what we think or feel about it.

In this market, I'm a buyer. America may have hit the end of the road, but, maybe not. I'm betting on maybe not.
0 votes Thank Flag Link Sat Apr 3, 2010
Congratulations on the purchase of your condo. That crystal ball would be great right about now. The web reference listed below is a link to market statistics for the St Paul neighborhoods. Some of the areas, Frogtown, Phalen, East Side, that saw very high price declines since 2007 are begining to see some upward movement that many of us hope is a sign of stabilization; however, without the crystal ball it is uncertain. In light of the fact that you are purchasing a condo, you will also want to pay attention to how the HOA is doing and ensure that they are planning for future capital expenditures. The viablity of the HOA can have significant affect on your property value. Good luck and enjoy your new home.
0 votes Thank Flag Link Sat Apr 3, 2010
I expect house prices to fall until 2013. Prices could see some appreciation in 2014.

The key will be 2 things.
1 unemployment and economic recovery. If you see improvement there house prices might appreciate.
2 money supply. Far to much has been printed recently. If things go wrong (and it could) hyper inflation could occur. That could lead to 20+% interest rates. I am not sure of that would increase house prices to make up for the loss of money-value or if it would drive them further down as borrowing money gets to expensive. If incomes do not rise I expect house prices to really fall hard. If incomes rise as fast anything could happen.
0 votes Thank Flag Link Fri Apr 2, 2010
Hi, Dan!
Our economy her in MN is a little different. Our unemployment numbers have always been almost 2 points lower than the national. While your prognostications may be correct on a national level, that's not what we're seeing here in the Twin Cities. Thanks!
Flag Sun Nov 10, 2013
Forget prices going up. They should be dropping more instead.

http://www.housingpredictor.com/minnesota.html
The upward mobility of move-up home buyers is likely to aid Minneapolis in its recovery from the housing downturn, and St. Paul should follow suit. There's nothing tricky about the recovery in the Twin Cities other than a second wave of foreclosures expected that will send home values on a bumpy ride for a while.

When the winter snows thaw in the Twin Cities home buyers looking for bargain rate deals will be out in abundance riding with real estate agents to find their new homes and other deals. Minneapolis and St. Paul are forecast to see average housing values deflate just 3.2% in 2010, hardly a move that should keep anyone from buying a home.
0 votes Thank Flag Link Fri Apr 2, 2010
Agree with Rachel's perspective as well - when you pay rent, remember that you are paying someone's mortgage, so better your own. Stay realistic, work with great resources, and get a move on so you can get some of the free money from Uncle Sam or I guess its, Uncle Obama.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Apr 2, 2010
While I would have to agree that buying a home is always a good investment, a little perspective is also a good thing.

Consider that if you don't own your home, then you are paying someone else's mortgage and creating wealth for them. Sometimes renting is an appropriate use of your money, but if you intend to stay in the area for an extended period buying will make sense in the long run.
Web Reference: http://www.RachelLuckow.com
0 votes Thank Flag Link Fri Apr 2, 2010
Don't expect to much appreciation for a while. I would think small, and hope it's better. Look for 1%-3%. The more important thing is to buy it for a good price now.
0 votes Thank Flag Link Fri Apr 2, 2010
My suggestion is to buy your home with the expectation of no appreciation - it likely will appreciate by a small margin over that time, but you should buy with NO expectation of one. Buy it because it makes sense and enjoy living there - that way regardless of the outcome, when the time comes to sell you will, as my father used to say, "owe it nothing".


Good luck,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Apr 2, 2010
Hi, Firsttimerstp,
Yes, you are wise to acknowledge that none of us has a crystal ball. Sales are pretty flat over all right now and are expected to be for a while now. So, my guess is that you won't see any visible appreciation until at least 2012 or 2013. I believe one person's answer here says you might experience 4-5% in the first years might be a bit ambitious. I would say your value might be flat for the first couple of years and then begin to climb commensurate with normal appreciation (hopefully), which would be 3-5% per year.

But, I want to qualify all of this by saying that if anyone had asked us 5 years ago if we'd see unprecedented amounts of foreclosure and a reversal in prices to values from the 1990s (1970s in some ares) and that it would last THIS long, we would all have said, "Well, historically, that's never happened before, so it can't happen." ..........just saying
0 votes Thank Flag Link Fri Apr 2, 2010
It depends a lot on where the property is, geographically. Some areas will appreciate a lot more than others. That largely has to do with the broader economic picture and employment trends in the area. For instance, areas like Detroit are probably going to lag behind areas like Northern Virginia.

It also, obviously, has a lot to do with overall national/international economic trends. If we have soaring interest rates--resulting in mortgage rates of 14%-16% (as we did back in the late 1970s), then everything will slow down and you may see negative appreciation. And it's quite likely that interest and mortgage rates will rise from their present levels.

As for what I expect: In some areas of the country, appreciation is already occurring at a 5%-7% or greater rate. I expect, generally, for slow growth 1%-3% for the next 12-18 months. Then more rapid appreciation--4%-6% annually.

I'm not as optimistic as Elizabeth. But she easily could be right.

Hope that helps.
0 votes Thank Flag Link Fri Apr 2, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
I believe we will experience a fair amount of appreciation over the 5-10 year range. Looking at the prices now and the historic perspectives, I think you would experience a 4-5% appreciation annually at first, with possibly a 10% after a time. We have new buyers entering the market place at all times with the usual reasons for moving - family changes, work changes, etc - to name a few. In the early '80's we had a flattened appreciation structure due to extremely high interest rates - 16 to 18% for FHA and VA mortgages. This came at the end of a run of demand and appreciating prices in housing. If you would like a bit more information and some statistical overviews, please contact me directly at 612-98604105; This is a subject that is really fun to discuss! While, as you point out, we are neither mind readers or fortune tellers, but many of us are keepers of historica trend. Liz
0 votes Thank Flag Link Thu Apr 1, 2010
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