The Saint Paul Condo Blog

With the Twin Cities losing market share in 2007, Fannie Mae and Freddie Mac (The two main lending houses, where all bank go to get their money) have labeled us a Declining/Restricted market.  It means that new requirements come in to play.  Mostly higher credit scores, but listed in the small print, is 10% down for condos.

This shouldn't affect some of the higher priced buildings in downtown, but the buildings where homes sell for under $200k, this might become an issue.  Most buyers in the under $200k don't have 10% to put down.  The only work around to the requirement is FHA financing.  Problem is, most condo buildings have not been approved by FHA.  HUD and FHA inspect both condominium documents and the building itself before issuing their stamp of approval.  In the last 5+ years, FHA financing has almost been forgotten.  But with the clamp down, FHA is becoming popular again.  With that being said, most of the buildings in downtown are not FHA approved.  The only building I know of in downtown that is approved, is MarketHouse in Lowertown.  I would guess they sought their approval during the last recession.

I have a feeling we will see a race to see what buildings can get FHA approval first, as that might make all the difference in the coming years!

Spot FHA financing is available, but only up to 10% of the building's unit total.  So as an example, say a building has 100 homes, only 10 could use FHA financing without the building being approved.  This might be the saving grace downtown needs, while these buildings seek FHA approval.

Looking through listings here in downtown and one thing becomes very clear.  There is absolutely no rhyme or reason for how taxes are assessed!

Here's an example. 

467 Sibley at the Dakota (one of the two level townhomes) just sold for $302,621 and the taxes for 2007 are at $4,142.  Giving you a tax rate of 1.37%

78 East 10th Street #508 (The Pointe) just sold for $92,000 and the taxes for 2007 are at $872 Giving you a tax rate of 0.94%

These are just a few of the examples that I have been finding in downtown.  I have been approached by homeowners and attorney alike trying to make sense of the tax methodology.  I have a feeling it's done like the childhood game of "pin the tale on the donkey" - blindfolded and full of... cake.

Today we were invited to a luncheon with US Senator Norm Coleman.  The lunch was put on by Wells Fargo Home Mortgage for the top 10% of Realtors in Minnesota.  We were pretty honored by the invite, but had it in the back of our minds, that this must be some type of sales pitch by Wells Fargo.

I was really surprised by the lack of a pitch!  The lunch was held at Kozlak's Royal Oak Restaurant in Shoreview.  Mr. Coleman talked about the economy, the stimulus package and a nice little speech on optimism.  He also took questions from the group (there were about 100 of us there).

I managed to get one of the last questions in; I wanted to bring to his attention the domino effect the 10% down on condos is going to create.  So hopefully he will take that back to Washington.

The luncheon was a great experience and I look forward to the next Top 10 Club meeting!

We decided to expand!  The condo directory on this site has been a big hit with just about everyone who visits this site.  Well, condo buyers shouldn't have all the fun!

The St Paul Neighborhood Directory has information on each Saint Paul neighborhood, and you can search for homes just in that area.  We designed the new directory in the same style as the condo one, so it should be very familiar to regular visitors to our site.

I hope you enjoy it!

It looks as if construction should start again soon at the Farmers Market Flats.  Frericks Construction (one of the original bidders on the project) will start work on the development on May 1st, but possibly sooner.

It will still likely delay the timeline, but I bet we are now talking early Spring of 09 rather than late Summer of 09.

This leads to the next question on most people's minds...  Are delays in new construction normal?  Yes, unfortunately there's always something that crops up that causes problems.  Both the Lowry and River Park Lofts had delays.  Both projects even ended up getting new developers by the end of the projects.

It's also true that some are built delay free.  That's the exception to the rule.  Given the tougher housing market these days, it will be difficult for any project to meet their target dates.

I tried typing that with my best Donald Trump impression, but it's no good.  This photo from the "actual" meeting will have to suffice.

It was announced today that the developer for Farmers Market Flats has fired the general contractor (Flannery Construction).  Construction at the site has slowed down over the last few weeks, and there were rumors of trouble brewing.  In a tight market, every dollar matters.  It's my understanding that there were some price increases that should have been covered under the original contract.

Anyway, to make a long story short, the project will be delayed further.  The Developer (Sweeney Development) is now estimating a Spring or Summer of 2009 for a closing date.

If there is one project that truly deserves to go forward, this is the one!  It's adding housing that's actually affordable compared to must new construction projects and then there's the indoor farmers market!  When most development's go forward, the only real benefit is to those who buy there, Farmers Market Flats will help all of Downtown and also help support the local farmers of the St Paul Growers Association who will run it.

Hang in there Farmers Market Flats!

February was a banner month for web traffic (March is off to a fantastic start as well), like I said a few posts ago.  Well, I'm seeing the results of the increased traffic.  I'm nearly booked solid this week with showings, and we accepted an offer today on one of our listings.  Even with the clamp down on financing, buyers are still buying.  What I have noticed - buyers with 20% or more to put down.  Six months ago almost everyone I was dealing with were putting down less than 5%.  It's an interesting shift.

I also am starting to wonder if the increase in gas prices are getting people to think about living closer to mass transit or their jobs.  Downtown scores high in both categories.  Very centrally located, easy highway access, and many job opportunities are some of the calling cards of Downtown living.