2020 STL Home Sales Review – Gary’s Take

What can you say about 2020? There was no predicting this year – a year we will never forget. Home sales began the year strong, as the 2019-20 winter market had not softened much. First quarter sales were trending up, and then in March, St Louis County and City were hit with stay-at-home orders except for essential work and travel, due to COVID-19. This slowed home sales to a crawl for 6 weeks, but our industry, along with supporting businesses, was allowed to operate. In late April a thaw began that turned into a steady flow in May once the restrictions were loosened. In June, it turned into a torrent as home sales took off like a rocket, and only slightly let up in the fall, overcoming the high spike in unemployment and job furloughs.

The days-on-market (DOM) and home supply did not jump up in March and April, and prices did not fall, as many sellers held off, balancing the drop in buyers. As sellers felt more comfortable again in May, the buyers were already there. Mortgage rates dropped to all-time lows in the 2s, fueling high demand along with the pandemic-inspired moves. The DOM and inventory dropped quickly thru summer, and prices spiked up. Spring was delayed into summer, and fall into winter. The market did not slow down this winter, and I consider us already into an early spring 2021 market.

My calculations taken from Multiple Listing Service show a St Louis area price increase of 6.8% for the year, near or at the highest I can recall in the last 30 years, to $274,893. The highest submarket price jump is North County at 12% which ran only 3.7% in 2019. Still the most affordable in the metro, the $120,622 average home price is highly attractive here, supported by the 100% list price to sale price ratio (LP/SP) and below average DOM and inventory. Note: As 5 of the 7 submarkets list exactly 100% LP/SP in MLS, it seems evident that the system calculations do not register over 100%, so my figures are limited in that capacity. Half of my own listings in 2020 sold at or over list price, so I know many others did as well.

Second submarket in price jump was Jefferson County with 8.8%, following the top rate of 7.4% in 2019. Its average price was 2nd lowest in the region in 2017-18 but has moved higher than St Louis City since then with $212,518 in 2020. Jeff Co had the largest drop in inventory and DOM among the 7 submarkets, indicating fast-increasing demand. St Charles County clocks in 3rd highest with 7.9% appreciation, a nice follow up to its #2 ranking in 2019 with 6.6%. St Chuck had the lowest DOM with 31, high LP/SP and below average inventory, and $283,081 ave price. The City with 6.8% barely beat out South County at 6.7%, both sporting 100% LP/SP or higher, but So Co holding the metro crown for lowest inventory and 2nd lowest DOM, while the city had 2nd highest inventory and above ave DOM. City price averages $208,125 and So Co $226,860, both attractive, plus closer-in locations.

That leaves the 2 highest priced markets in the region, West County at $390,759 and the Central Corridor at $455,213. West County had below average appreciation of 5.7% (still pretty darn good) after a lower 3.8% in 2019, with the highest inventory rate in the area with DOM being 2nd highest. Homes under $500,000 still move very quickly here, many receiving multiple offers, and LP/SP at 99.7%. But even with the $500k+ selling pretty well last year, the upper end takes a bit longer and does not have the same level of demand that forces a higher price increase like those under $500k. Same thing along the central spine inside 270, the expensive Central Corridor had the lowest appreciation rate of 4.0%, the lowest LP/SP at 99.2% (still not coming off the price much), and the highest DOM at 53 with an average inventory. Again, homes under $500k sell very fast here with many competing buyers, but the amount of higher priced homes keep the average stats muted. Additionally, if more homes under the $450k average sell, which likely happened here, that keeps the average increase down. So don’t worry Kirkwood, your appreciation rate was very likely higher than 4%.

Some personal 2020 stats: All of my listings sold and closed last year, the market average was 87%. My average DOM was 27 (market 41), and median DOM was 8 (market 17). In fact, half of my listings sold on market debut weekend, the DOM reflect pre-marketing and contract negotiating time. Half of my listings had competing offers and one third had escalation clauses. Two thirds of my listings sold near or set record prices for their subdivision model. I closed 23 sales (14 sellers/ 9 buyers) averaging $329,575 including 4 relocations and 2 new construction. My brokerage firm finished #147 out of 794 in St Louis (last year #187), placing it in the Top 20% of STL firms. This was my best year in 30 years for sales volume and revenues, and I thank everyone who chose my as their Realtor or referred me to someone.

As good as the year was for me, I realize that many folks had a very difficult year. My wife and I ordered from restaurants more often, took precautions to limit the virus spread, and gave more to charitable organizations personally and thru my company than ever before, and I wish everyone the best for 2021.

How Much for the House in Bitcoin?

Bitcoin, Cryptocurrency, Ethereum, Litecoin. These terms have been in the news alot lately, due to their meteoric rise the last few months, and particularly the last few weeks. What are they and how do they work in home sales?

Cryptocurrency is a form of digital currency that is about 10 years old. There are several thousand individual types of crypto, with Bitcoin being by far the largest and most well known. The current value (Jan 8th) of 1 Bitcoin is $40,000, having risen from $30,000 just a week ago. There are about 18 million Bitcoin in circulation, with the total supply limited to 21 million. It has been derided as having no real value for most of its existence by large institutions and banks, until mid to late 2020 when Square and Paypal invested in it, and are making it available to their customers. Crypto payments are widely considered secure and trackable. I have since seen Kmart rewards in Bitcoin, football players asking for payment in Bitcoin, and many large investors buying it up.

Ethereum is the name of a digital platform of which Ether coin is traded on, among other things. Litecoin and Bitcoin Cash are other types of cryptocurrency that Paypal is recognizing.

So where can you get these babies? Besides going on Square and Paypal to acquire, the 4 above are offered thru Exchanges like CoinBase, or you can invest in them thru Grayscale or Bitwise on the stock exchange, buying any amount of shares you wish individually (Grayscale) or in a group. Once you get past the top few types of crypto, you need to go thru an Exchange to buy. Be careful, as the values of this digital currency are very volatile, and most of the smaller ones have very little to no value at all.

Now when it comes time to close on your home purchase, Bitcoin will likely not be an acceptable form of payment anytime soon. I am not aware of a title company in St Louis that is handling it yet. The easiest way to do it is to simply exchange your Bitcoin for cash on an Exchange, and wire US Dollars to the title company. Hopefully the Bitcoin value does not drop too much before closing, as it will vary from day to day, even hour to hour. Caution – in 2017 it rocketed up many times over, and in 2018 it dropped just as fast. The other way would be to agree in the sale contract that the purchase price would be paid in Bitcoin, or whatever form of digital currency you could agree on, and pay that amount directly to the seller’s account at closing. And I would strongly encourage you to have an attorney oversee the contract language and closing process to protect your interests, as this could be used fairly easily to scam someone (Where is my Bitcoin? It’s “in the mail”). And beware that the value of Bitcoin from contract acceptance to closing can vary up or down. Happy Mining (Bitcoin term)!