I check the real estate market fairly regularly, mostly to see what the rental business tells me about my hometown’s economy. I was more than a little surprised to see how much of Red Wing is up for sale this Thanksgiving weekend (154 total homes for sale, with 2 forclosures and 11 for sale by owner properties). When we started looking for a home in Red Wing (population 16,000) in 2014, there were only a couple dozen homes for sale and practically none in the $200k-and-above territory. Today, there are 59 $200k-and-up homes for sale with a surprising number (13) of $500k-and-above homes available. Two-thirds of the Red Wing homes for sale are $100k-and-up, which is middle class and upwards in a city this small. More than one-third of the homse for sale are $200k-and-up. If that doesn’t make the city council and government very, VERY nervous, they are braindead.
Are the rats leaving the ship? Post-2016 election, I am certainly thinking about bailing out of Trumpland. The only thing to think about a city and county that votes overwhelmingly for a bankrupt, mobbed-up, Russian-financed con man is that there is a whole lot of stupid here and that is not a good sign for the future of the area. This palace belongs to one of my rich neighbors and they are asking “$699k” for the property. If I owned a $700,000 home in a place that was suicidal enough to elect Trump and Jason Lewis, I’d be panicked. (Maybe, if I could afford a $700k castle that wouldn’t be true, so that could be beyond my imagination.)
However, I can easily afford the home I’m living in and the self-destructive citizens of this county and city are making me nervous. I’ve lived in a town this size when industry and the people who make things happen fled. In the early 1980’s, right after Reagan was elected, Nebraska’s farm economy crashed and I lost all of the equity I had in a home in Fremont. When we moved to Fremont, there were a half-dozen houses for sale. When we crashed and burned, there were several hundred and prices were rock bottom. A smarter person would have bankrupted and walked away from the property, but I paid the downpayment for my buyers, took a $5,000 loss on an $18,000 loan, and left town broke and in debt. Today’s situation in Red Wing feels suspiciously familiar.
The south end of the Twin Cities appears to be in a similar economic situation. While Ramsey and Hennepin County properties are still pretty strong, Dakota and Washington Counties are well-decorated with bank owned homes and auctions. There are too many nice looking properties selling for under $100k in areas where the non-foreclosed properties are selling for $200k-and-up. This is some kind of economic indicator, but I don’t know what kind. Could be a good time for rental propertyinvestment or it could be time to cut and run from the stupid parts of the state.
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