It’s been a very interesting year in real estate for the St Louis area. Prices have declined in almost all cities in the St Louis Metro area, but not nearly as much as in other markets.  Banks have been slow to bring foreclosure inventory onto the market.  They are trying to work out loans with borrowers, and have strategies to keep a shadow inventory of homes and release them slowly.  That along with the first time homebuyer tax credit really helped to prop up prices in what might have otherwise been a much worse year.  With the new first time buyer tax credit along with the moveup buyer credit that went into effect recently should have a similar effect on real estate in St Louis in 2010.

The really interesting aspect that we’ve found this year is the lack of inventory.  There were much fewer properly priced homes on the market this year.  As many buyers found out, these homes moved quickly.  We’ve heard plenty of reports about homes having 3 or more offers on them.  We expect this to change next year.  Individuals looking to move up will make decisions with the new tax credit that they didn’t make this  year while waiting for the market to pan out.  This also means that there should be a high turnover of property in the coming year.  However, we don’t feel that high turnover will mean higher prices.  We feel that even though a tax credit is in place, the foreclosures that will seep onto the market will keep prices fairly stagnant.

Some areas have actually seen an increase in the past 12 months.

Homes in St Charles 63304 – Over the past 12 months prices have risen from about $252,000 to $264,000.
Homes in Crestwood 63126 – While only a minimal increase, the price still went up since January 1, 2009.
Homes in Creve Coeur 63146 – Homes started the year at an average of about $210,000 and are now at $220,000.

November 2009 St Louis Area Housing Report

The data is coming in, but it appears that a flurry of buying has occurred over the past month around St Louis and St Charles counties. Prices are trending up in many zip codes, while home values in areas that were previously plummeting have seen some stability.

Florissant, MO 63033 – has seen a price stabilization where previously it appeared to be falling steadily. It appears as if at the present point April was the bottom for this market. As with most of the areas in St Louis, the bottom occurred as inventory was flushed out of the system. Our data however indicates that Florissant and much of the North St Louis County area might be ready to experience another drop in values. This being due to the foreclosure moratorium that has now ended.

St Charles, MO 63303 – has seen a price increase over the past two months of almost $10,000. The inventory in this area plummeted 20% during that time. There are reports of multiple offer situations on many houses. Realtors are reporting activity on homes priced correctly similar to that of 2006.

Just as oil prices are controlled by supply and demand, home inventory works the same way. The truth is that desirable areas of St. Louis are experiencing inventory drops as buyers are taking advantage of incentives. But as Sellers sit on the sidelines not listing their homes, it makes inventory drop. What you noticed when you go into the data is that there is a wide difference to create the average days on market for these areas. Many homes are selling within 60 days, plenty of other overpriced homes are sitting for 180 or more days

 
Due to a very steep 35% decline in the number of homes for sale, St Ann, MO looks to have found a temporary pricing bottom. The city went from a high of over 100 homes actively for sale in July 2009 to just 72 at the time of this article’s publishing.  After reviewing data it appears as if the liquidation of a large list of foreclosures, which generally bring prices down in an area, is coming to an end.  The median price for the city was around $105,000 in July, 2008 and at it’s bottom in April, 2009 came in at just $95,000.  As of May 18, 2009 that figure had jumped to almost $99,000, a fast 4% increase.

However, we do not expect this to continue.  Due to the large nationwide lenders holding a 3 month foreclosure moratorium that should end in the next 4 weeks, St Ann might be susceptible to additional price declines.  

Real Estate Inventory

The biggest news this month is the dramatic decrease in home inventory.

Currently there are only about 14,000 listings in the Saint Louis and Saint Charles MLS system.   This is only about 60% of the number of listings on the market last year.   Homes that are priced correctly are moving very quickly.  In fact there are reports of homes with multiple offers and moving within 7 days when they are priced right and move in ready.  Therefore, if you are able to price your home at current market rate, and not 2006 pricing, it’s possible it could sell quickly.  

There are multiple reasons behind this:

• Remaining demand from 2008 – As many people sat on the sidelines in 2008 due to the economy, their shrinking stock portfolio, and the pending election, the market soured.  If supply stays the same while demand goes down, pricing will go down as well.  Now that portfolios are slowly on the rise, the election is over, and there are many great benefits to purchasing people are getting out there.
• $8000 First Time Buyer Tax Credit – When first announced, the $8000 tax credit seemed like it might be more of an icing on the cake, than the cake itself in terms of purchasing real estate.  Then, a little known piece of the law was found.  If you bought a home in 2009 and qualified for the credit, you could amend your 2008 taxes and receive the refund immediately!  This has spurred countless purchasers into the market.
• Low interest rates – Rates are still at historical lows.  With the average rate howevering around the 5 – 5.5% mark, it’s a very affordable time to buy.  The less it costs to borrow money, the more the buyer can afford, and the more it helps the fragile housing market.

These factors combined with the pending MHDC NSP program which will offer a $15,000 credit at closing to purchase a foreclosure should offer prosective purchasers some great incentives to buy.

HUGE increaes in activity

The number one item reported by Realtors in the area is a large increase in traffic.  People are writing contracts, they are visiting open houses, homes are starting to sell under their average days on market.  First time homebuyers are becoming aware of the available tax credit.  And individuals with decent credit realize they can get a loan.

Inventory

The spring buying season seems to finally have heated up.  If you review the inventory for most larger zip codes you’ll see steep declines in inventory.  Ballwin , MO 63021 Single Family Homes for example had 350 homes for sale as for 1/1/2009.  Today, that number is down to 274!  This is a state carried through numerous zip codes.

Price

The most interesting trend?  Prices are really trending up.  Places where prices were stagnant, they are going up.  Places where prices were down, are up.   (The only places this is not being seen is in North St. Louis county.)

Market Action

What will be interesting to see is how market action changes over the next few weeks.  As inventory trends down and prices trend up this should have a good effect on total market sentiment.

Now Called:
The Streets Of St. Charles

Cullinan Properties, based in Peoria, IL is the developer of a large scale redevelopment project on the South East corner of Highway 70 and Fifth Street in St. Charles.  Many will know this site to be the former location of the Noah’s Ark restaurant and a large hotel that used to be on the site.  

The property had been a sore spot in the eyes of many St. Charles county residents for a long time as the hotel and restaurant had fallen into disrepair and were a visual strain when entering the county over the Blanchette Bridge.  

In the early 2000s, a project was hatched to redevelop the ground including some surrounding homes and a gas station into a large format, high-end retail, office, and residential center.  This project was originally known as “The Plaza at Noah’s Ark.”

In 2007, the restaurant was torn down soon followed by the hotel to make way for the new construction.  

One major feature of the proposed project was the Show-Me Aquatics center.  The center was to feature a set of pools and would feature aquatic therapy for adults.  That project has now been moved to be included with the new St. Charles Freedom Center on the site of the old K-Mart near Highway 70 and First Capitol.  More can be found about Show-Me Aquatics here. 

Originally, The Streets of St. Charles, as the project is now called, was to feature an 18 story office and residential tower, outdoor ice-skating rink, numerous high end restaurants, and an outdoor mall.  While the lagging economy has drastically changed the plans for this development, construction still continues.  A site plan of the current proposed project can be found here.  As you’ll notice there is a big empty location for “Future Development.”  Hopefully this location will see the return of the mixed-use tower.  It would provide excellent views of both the river and the surrounding area.  Currently excavation is complete and awaiting warmer temperatures to pour the foundations. 

While Cullinan’s website states a proposed opening date of Mid-2010 , it’s more likely that this will be delayed or worked into numerous phases.  A high end center was completed in the Lake St. Louis area in 2008 and attempted to feature higher end retailers.  While the economy has made it difficult for them to find tenants, they do have some big name stores including Ann Taylor and Bed, Bath, and Beyond.  More can be found about the center here.

As more higher end properties are built in St. Charles county it should only further the growth of this county.

STL Home Data  is sponsored by River City Real Estate, one of the largest indepedent brokers in the St. Louis area.

With offices in both Saint Louis and Saint Charles counties, their agents are primed to help you understand the data on this site to make the best decision in buying a home or in listing your current property.  Did you know that correctly pricing your home when you first list it can yield you up to 8% higher net sales price?  River City agents can show you how to use our data to figure out a pricing strategy.

Their agents have specialized training beyond any company in the St. Louis area in using technology to assist in the homebuying and selling process.  They offer tools unavailable to other agents to assist you.

If you are considering the purchase or sale of a home please call them toll free at (866) 456-1862 or visit their website www.RCREonline.com

As we exit the cold months and see buyers re-enter the market, St. Louis continues to outperform the rest of the country when it comes to the losses in real estate.  While some places in the United States saw 30% declines in home values last year, the average around the St. Louis area seems to be about 6-8%.  Of course there are some staistical outliers.  But even the hardest hit areas are coming in at less than 15%.  At the present time pretty much every city in the St. Louis area we would classify as a “Buyer’s Market,” however this doesn’t mean there aren’t some areas that have weathered the storm significantly better than others.

Let’s discuss some bright spots of the market:

Affton, MO

Affton has been an affordability haven over the past year or so.  While Affton had been overlooked through the expansion in the early to mid 2000s, Affton’s low prices made it one of the few cities with increasing home values last year.  Even through the slow months of winter, there was only a 1.4% drop in values.  (This is normal for even the best areas during the slow months of December, January, and February.)  It will be very interesting to see how things go in Affton this year.

Oakville, MO

Due to few sub-prime loans, Oakville is a fairly steady area and with the demand for the school district by South County buyers, this city should remain steady.  It did see a decline last year of about 6% but much of that decrease looks to be gained back as early 2009 buyers cleaned out around 7-8% of the total inventory of homes.  This is high percentage wise for Winter months. 

Saint Ann, MO

While Saint Ann saw a price decline of around 10% last year, it looks to be primed for a jump at the present time.  Our Market Action Index (which compares the different aspects of price, inventory, and how long it’s taking to sell a home) is seeing an early spike for 2009.  This means that homes are selling quickly, inventories are reducing, and prices are stable or increasing.  

Saint Peters, MO

Data shows that Saint Peters, MO actually saw an increase in values in 2009.  Inventories of homes declined dratstically throughout the year.  The key factor is that people took their homes off the market that didn’t need to sell and left inventory for those that did.  As supply reduces and demand increases for the buying season, this should keep prices the same if not go higher.

Wentzville, MO

While Wentzville saw a huge housing boom over the past few years, the fact that it’s on the outer edge of suburbia should have made it perfect fodder for significantly declining prices.  As builders needed to clear inventories and sell off new lots their downward pressure on prices should have seen a more profound drop in values.  During the majority of last year, Wentzville actually saw an increase in home prices!  While prices slipped over the slow Winter months, inventories dropped significnatly making the city poised for another shoot up in values.

March 2009 State of Real Estate Report For The St. Louis, MO Area

The market seems to have found a new bottom.  Whether we will stay here or not remains to be seen.  Plenty of bloggers and reporters are indicating we have another 12-20% down nationwide to go according to their data.  However, many of the reasons they have indicated as to why the market would be still declining doesn’t seem to qualify in St. Louis.

One of the biggest drags nationwide is the necessity to still clear out remaining inventory of new homes.  For example, one report claims that there is 10+ years of inventory of new condos left in Miami, FL.  While there is a large inventory of condos in St. Louis, it is no where near this 10 year level.

March is the time when Buyers start entering the market to make moving decisions over the busy season ( April-August).  So it remains to be seen if more buyers enter the market this year than last.   Although the media says it is difficult to obtain a loan, the truth is that loans can easily be found for almost anyone that hasn’t missed a mortgage payment in the past 12 months.

There is also the $8500 first-time homebuyer credit that is new for 2009.  However it is our opinion this will do little to spur buyers into the market.  Had this been a credit at closing instead of a tax credit on a return filed a year later, this might have had a significanlty greater impact.  The truth is that the buyers that would end up choosing not to buy a home this year are pushed out of the market not because of tax savings next year, but because they need the funds for downpayments, closing costs, etc.  A tax credit simply will not spur on buyers to make the decision.  Sure it will be nice for them to receive that credit next year, but again it will not get them to sign on the line.

The State of Missouri did offer for a short period of time through their MHDC program a $6750 credit that was given at closing, however the funds for that program were quickly used up.  Should this program get additional funding, we feel this will assist even more in aiding the market.

However, when it comes down to it, the St. Louis area can be explained in sections:

West County – Good market conditions.  While it is true that prices have come down, it’s minimal.  Buyers are still in the market and are approved and ready to buy.  There are few foreclosures but they are very minimal.

St. Charles – Similar to West County, prices are down in St. Charles county, however there are buyers.  The one item that continues to plague St. Charles county is an elevated unemployment rate.  This is due to the numerous small businesses that call St. Charles home.  As the economy has been hit hard, small businesses have scaled back their employment.  There are few foreclosures.

South County – While South County saw a significant decline in home sales last year and a rise in inventories, the market is seeing a nice boost early in this year’s buying season.  Average inventory days are down, prices are rebounding, and buyers are still coming back.

North County – Of all the areas of St. Louis, North County has been affected the worst.  There is a high rate of foreclosure and worst of all demand by primary home purchasers has plummeted due to multiple factors.  However, there is a high rate of investors buying in this area at the present time.  With plenty of homes being purchased for $50k that can then be rented for $800 or more, there is a lot of potential for a fast recovery here.