St. Paul Facing Tough Time Managing Repair and Resale of Foreclosed Houses
Although St. Paul has initially failed to dispose of many foreclosure houses it had bought hoping to sell them to purchasers with certain conditions, it has learnt some lessons from the operation. The condition was that the buyer was to produce proof that he or she had the resources to carry off the repairs that would observe city building rules as well as rules regarding heritage buildings. Now the city is considering some improvements in the exteriors and interiors of the houses to attract buyers.
With extra investment it is expected the properties would fetch buyers paying a proper price enabling the city to make up its investment. The efforts of the city have been helped by certain trends in the local real estate market. There is noticeable activity among buyers hunting for affordable homes.
From 2008 December and 2009 November over 12,000 units with price tags of $120,000 and below have been sold in 13 country metro regions as per the findings of Minneapolis Area Association of Realtors. It marks 95% spike over the sales numbers within this price range during the previous 12 month stretch.
In recent months there have been extra incentives to buy in and around Dayton’s Bluff. Last April the Pohland Family Foundation offered a grant of $1 million to buyers purchasing in 55106 zip code. Dayton’s Bluff is included in this area. The money is being managed by Bluff Neighborhood Housing Services of St. Paul – a non-profit group.
The demand for affordable houses has been matched now with a massive supply of units. It means purchasers looking for discounted houses have plenty of choice before them. Many buyers who have been hunting around in the price range stretching from $25,000 to $100,000 finally end up choosing prices in higher niches around $80,000 when they note that the higher price bracketed houses require less repairs.
Brad Griffith of Edina Reality suggested the officials of St. Paul City should think about working in tandem with the local realtors to sell the houses. The houses could then be listed with Regional MLS of Minnesota. Griffith explained, “The MLS is helpful from the exposure standpoint.”
Recently some of the buyers opting for housing below $120,000 are planning to rent out the units or resell them after repairs. But the city wants purchasers who will nest in these houses. But there are lesser numbers of buyers in this range.
Another problem is that the willing buyers are finding difficulty in getting loans to finance the costly repairs.
