To mark my new Chesterfield listing, which sold this weekend with competing offers, I strolled the city of Chesterfield twice. It’s big enough that 10 strolls will not cover it, but I have sold many homes here over the years, even worked in 2 offices here, one in the Valley 2002-08 and one by the Mall 1992-94.
Considered one of the premier municipalities of not just West County, but all of St Louis, Chesterfield offers some of everything. Top restaurants, large business operations, tons of retail shopping and entertainment, parks, even its own airport, the 2nd busiest in the metro.
With over 47,000 residents, recent home prices ran from the $150s for a condo and $300s for single family, to over $2M. The average price is $643k. Subdivisions and infrastructure overall are well maintained. There is a pricey new development near Central Park with a cool West Coast vibe overlooking a lake.
Faust Park on Olive is a popular spot, holding the Butterfly House, a Carousel, walking trails, and a historic village. The original Chesterfield Mall with the Cheesecake Factory, is slated to close this summer and be redeveloped. Of the 2 newer malls down 40/64 in the Valley, one has already changed over to an entertainment district which holds the Factory, a performance venue for 3000. Their Amphitheater in Central Park holds 4000, an outdoor venue.
The Valley is a story unto itself with the famous Flood of ’93, see photos of the Smokehouse/ Annie Gunns, which flooded then and is still one of the best eateries around. Tons of shopping and restaurants abound there, just down from the Spirit airport and near the baseball/ soccer complex which hosts many local teams and regional tournaments.
Several major businesses reside here, mainly along 40/64, Bunge, Bayer, Pfizer, RGA, St Luke’s, Dierbergs, McBride and Son, and others. Public art is big here, I think in the top 2 or 3 in St Louis along with Clayton and downtown STL. Sculptures are scattered all around their Central Park, businesses and byways.
If Chesterfield is a place you would like to move to, or move from, contact me to have an expert on your side!
Hoeferkamp Real Estate is Expanding in 2022!
I was within a whisker of having my 2nd best year ever in 2021, after my best year in 2020! I appreciate my clients for continuing to support my real estate business so well, that I am now planning an expansion:
Exciting News – After being on my own for 3.5 years, and having excellent marketing support from Sue and Tracy, it is time for me to add a part time Office Administrator! I am actively searching for an assistant to help me run my office starting in February, and provide support for 2 licensed agents as they are brought on this summer. Hours are flexible and most work can be done remotely.
With a growing clientele and high demand for my real estate services, this will free up some of my time from doing computer and administrative tasks, so I am able to continue giving clients the services that they have come to know and expect, while still personally representing them throughout the entire selling and buying process.
The last 3 months have been almost non-stop sales activity for me right thru the holidays, with brief respites thankfully, for Thanksgiving and Christmas. I believe more buyers are waiting til “the slow time of year”, or what used to be, from November to January, to avoid competition. I must say the last 2 winters have not seen much of a slowdown, and while there is less competition, there is still high demand for the fewer homes that come on the market. A real early spring you might call it.
Here is my sales tip for 2022: Get your contractors lined up early this year, and be prepared to pay substantially more. Have your service and repair receipts handy to show the buyers. With labor and supply shortages, home repair and improvement costs are jumping quickly, and you have to wait longer. This puts a crimp in getting repairs done between contract inspections and closing. Just one more reason why sellers LOVE getting an offer where they do not have to do any repairs, even if you reserve the right to inspect and terminate. Also, do not wait til contract time to order code inspections. All violations should be cleared by market debut to aid in buyer acceptance and avoid contractor delays.
I will offer my annual roundup of STL real estate in a couple weeks, to review appreciation rates and market demand.
Have a Happy, Safe and Prosperous New Year!
August STL Real Estate Update
Time Magazine listed St Louis last month as one of the World’s Greatest Places in 2021! They listed us among 100 extraordinary destinations to explore. The areas highlighted for our town are a reinvigorated downtown, food, trails, hotels, arts, sports, and the Arch.
See the full write-up here: https://time.com/collection/worlds-greatest-places-2021/6079313/st-louis/?fbclid=IwAR1wmdv1vRR5sWlAmF5r9YdPa1JoV1rfPwQF-r5vLU_BjcUPpFUeFzXdl5E
What nice recognition for all the good that St Louis is – Go STL!
North City has some wonderful homes near the new NGA going up. Next time you cruise over to Crown Candy in Old North St Louis, head west a few blocks to view the progress on the multi-billion dollar NGA development, and check out some nice housing stock on the near north side, mirroring some of the high demand south side neighborhoods like Soulard, Lafayette Square and Tower Grove East. Wouldn’t it be amazing if this was the catalyst to reinvigorate north city for more people to live, visit and enjoy?
David Nicklaus in the Post reported last week that St Louis is a hotspot for investors, ranking 8th for net purchases (more buying than selling) out of the top 50 US markets, indicating a strong desire to buy and hold due to expected price gains. We are viewed as a having “a good rate of return…finding good value now with an expectation of price growth in the future.” The STL residential market has been scored for years as one of the best values in the country for a major metro. Now, about 10% of all area purchases are by investors, putting more pressure on increasing home prices as our inventory continues to shrink. Realtor.com’s chief economist calls STL an unusually active market for investors, the top firms which were identified as SFR3 in California, VB One based in Ohio, and Home Partners, also national. Many local residents buy one or two homes as an investment too (I had two for 13 years, helped pay for college), which is likely the majority of single family landlords.
Is this a good or bad thing? I believe having a healthy balance of single family rental homes is good, as there is a certain demand for them, although too many in one area can be negative. It can also hurt prices if these large companies decide to sell them too close together. In 2008-2011 a higher number of homes turned rental to avoid selling at low prices, and they were easily absorbed in the rising market since 2012.
Get ready for fall, it will be here soon. If moving before the holidays is in your plans, contact me now to get started — you can be done before Thanksgiving!
9 is a Serious Number
$100,000,000 is a lot of real estate, especially one house at a time. I just crossed that threshold for my career sales volume last week on a home closing in Fenton! I began selling homes in 1990 and have now personally sold 432 homes, and prices were much lower 30 years ago!
Speaking of prices, if you think St Louis home prices are high, check this out, from The Seattle Times/ Northwest Multiple Listing Service, where I just visited:
June Median Home Prices in King County–
- Seattle in 2020, $800,000….in 2021, $890,444…..Increase of 11.3%
- Eastside in 2020, $976,800….in 2021, $1,364,000….Increase of 39.6%
- North King Co in 2020, $650,000….2021, $925,000….Increase of 42%
- SW King Co in 2020, $479,350….in 2021, $577,000….Increase of 20%
- SE King Co in 2020, $519,000….in 2021, $660,000….Increase of 27%
Not sure what that averages out to be for the entire Seattle area, but holy cow, that makes STL look cheap, and our appreciation rates seem low. And our lots are bigger too. Interesting observation – some of the modern townhome styles that are popping up in STL city neighborhoods the last 3-5 years were built in Seattle many years ago.
The home sale market is still moving very quickly, with multiple offers still common. My last 4 listings in Apr-May have set new or near record prices for their model, all had multiple offers, two sold over list price, two slightly under. I have buyers successfully buying homes, some are bidding well over list price, some are not. 2 buyer’s appraisals even came in over the sale price! None have come in low. A winning bid can depend on the area, price range, condition of home, attractive terms beyond price (this is the real difference today), and sometimes just getting lucky. Here is an idea: For a buyer not flush with cash, maybe parents can purchase the home, without financing or appraisal protections (can still finance, and be a winning strategy without having to bid too high). They can then rent to child for a bit, and sell to them later. This is a growing trend.
Lower Level Finishes Enjoy Higher Returns
For many years, the lower level (basement) finish has not enjoyed a high return in St Louis. Perhaps due to people not using it as much, or average age of the finish was 20+ years, or owners did much of it themselves (lower quality workmanship plus lower upfront cost). That has changed. I have noticed in my calculations for sellers and buyers the last 12 months that lower level finish is realizing a higher valuation. I believe this is mainly due to 3 reasons:
(1) Zillow began using the square footage field from our MLS that includes the lower finish in the last 18 months in lieu of our “main” field, which does not include the basement. Suddenly, most homes appear substantially larger and sport a lower price per foot. On homes without a finished lower, of course, that number would stay the same. As buyers shop Zillow, and some other realty sites that have adopted this change, the homes with finished space in the basement now compare more favorably, especially if the entire space is finished.
(2) The pandemic last year created an immediate need for families to have multiple, separated areas for virtual classes and meetings. Many times, this meant going downstairs. If there was no finish, a desire to finish it, or moving to a home that did, was the effect. That led to more buyers targeting homes with the extra finish, and bidding those homes up higher in price. With the pandemic waning, I do not believe this will change, as people love having the extra space, particularly if newer finish.
(3) The workmanship has turned more professional the last few years, and a higher material quality is being used. When I began selling 31 years ago, it was common for basements to be finished by the homeowner and some buddies in part or in full. Drywall was always the giveaway if the joints were obvious. More so on less expensive homes, they rarely matched the quality of the main or upper levels. In fact, 10-15 years ago, when our Realtor Association was struggling with how to count the basement finish (there was only one field for size), one of the factors of including the lower level was that the quality had to be on par with the other levels. If markedly inferior, whether poor workmanship or too old among other factors, it was not to be counted in the square foot field.
Today, however, homeowners typically spend as much on basement projects, if not more. In fact, I have shown many homes recently where the lower level was the crown jewel. Fewer people are concerned about maintaining access to pipes via drop ceilings, so they are drywalling the ceiling with can lighting, just like other levels, which also raises the ceiling height. And fewer homes have chronic basement leaks, as sump pumps with drain tile systems are now common. With less concern about resulting damage, owners feel better about investing more money and spending more time down there.
My figures are not exact, as they are based on individual home pricing analyses. But where I would have added $15,000 in the past for average basement finish (750 sq ft at 10-20 yrs old, no bath) vs unfinished on a typical size home, I am now adding $18,000 to 20,000. If the finished area is small and very dated, I would add very little value. If the home was larger and higher priced, it could be a $30,000 or 40,000 difference. You still do not get a return close to the retail cost of finishing. I have told people to expect around 50% return in the past depending on various factors. Today that may be 50-65% if it is professionally done and the layout makes sense.
Happy finishing!
Light Bulb Choices Keep Growing
Have you been to the light bulb section at the hardware store recently? Holy cow they have alot! It used to be pretty simple with the old incandescent – 40 watt, 60, 75 or 100. Maybe a 3 way bulb for the floor lamp, or a 4 ft fluorescent for the basement. Then the candelabra bulbs came out with the brass chandeliers in the 80s, and the ceiling fan bulbs. Then all shapes and sizes with various new fixtures thru the 90s and 2000s. Then halogens…CFLs…LEDs…And now the latest thing: intensity and color.
I first noticed it with commercial parking lot lighting – the targeted, white-blue-ish color, very bold but not offensive. I noticed the spread into homes with the explosion of LED fixtures, first outside, then interior can lights, kitchens and bathrooms, where brighter lights were desirable. Various intensities and colors/ temperatures were introduced, but alot less incandescent yellow.
The choice today seems not so much wattage as it is brightness or color as indicated on the Kelvin scale. You will notice “soft white” or “opale”(traditional yellow) at the 2700-3000 range; “bright white” in the 3000-4000 range, and “daylight” at 5000. It is worth buying a box of each and trying them in various fixtures (as long as the base fits) around the house to get the look you want. I can tell you with confidence that residential lighting is moving away from yellow. It may be nice to have in a den or bedroom, where you want softer lighting, but out in the public areas, the garage, storage room, front porch, lighting is going “bright white”. I feel the daylight is a bit much, closer to the fluorescent look. We just had new light fixtures and ceiling fans installed in our main rooms and bathroom, and after trying all of the above, went with “bright white” for almost everything. Some are on dimmers, like the dining room. Look for dimmable bulbs.
Happy lighting!
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)!
Zoom Rooms, Home Offices and More
In high demand this year, as you can imagine, has been extra room in our homes. Starting abruptly in mid-March with stay-at-home orders across most of the region, families grappled with not only staying at home, but working from home and home-schooling their children. Oh what a dream it would be to have an extra room or two! Not everyone has this dilemma, but even if it is just you spending more time in the same space, it may suddenly seem smaller. What can be done?
Luckily, an internet-ready device, a connection, and a little bit of space is all you need to get started. Many folks are simply setting up a table or desk in an unused room, or a corner of a bedroom, living room or basement. If each person can be in a separate room, that allows for privacy and noise block. Internet bandwidth may need to be increased, with more devices being used simultaneously, or users can alternate logon times if schedules permit. A fresh paint scheme or new lighting can brighten things up. Comfortable chairs and the right backdrop are important. Office equipment such as a scanner with document feed may be needed.
Using your basement can be an easy option to create some privacy, either part of the rec room, or an office or BR already finished. If unfinished, hanging a curtain or bedsheet can make a quick backdrop and sound absorber. Lighting can be added with lamps and temporary extension cords. Folding tables and chairs can be brought out of storage, or even sturdy boxes can make for your computer, tablet or phone stand if tables/ desks are in short supply. Keeping space clean is crucial.
For a more permanent solution, purchasing appropriate chairs and furniture make sense, and remodeling part of the house, finishing the basement, adding on a room or two, or moving to a larger home are all considerations. Keep in mind that the present situation may not last long enough to be worth spending too much money. Or maybe you just want to remodel or move anyway, and this is a good excuse.
I do believe that having home office space is, and will be, a positive home sale feature for the long term. This does not mean spending thousands for elaborate built-ins, but it may bring back a wall or two into the great room concept, or bedrooms become a bit larger to accomodate a desk and chair, or builders offer more options for finished basements. Think mobile and flexible. Think hers and his. Formal living rooms, extra bedrooms and basement space are all ideal for this, as you can set them up now, and take them down when you move or no longer need them. In a few years, you may go back full time to the office, or retire, or kids go off to college, or a hobby/ fitness/ TV room becomes more important. Happy Zooming!
Craziest Housing Year Ever
Suffice it to say, never has there been a home-selling year like this one. It has been over 4 months since my last newsletter, as sales were nonstop since then. It is starting to let up, and I feel blessed that people were allowed to buy and sell homes throughout the pandemic, keeping their lives closer to normal than they would have been, while taking necessary precautions like masking, distancing and cleansing. Fortunately, I have not heard of any spiking illness or spreading due to the housing industry.
Home sales in St Louis, as you are likely aware, have been as strong as ever since the May rebound. With extremely low mortgage rates at or under 3.0% on a 30 year fixed (and still are!), the home office explosion, and pent-up demand all combining to drive buyer traffic thru the roof, I expect sale price increases to continue thru the fall.
My closed sales totals and revenues in 2020, as of last week, broke 30 year old records since I began in 1990, and are up over 35% from last year. I so appreciate my clients who trust me with their homes, and I work very hard for them. Especially in a fast-moving market like this, home-sellers (you) can benefit greatly from an experienced Realtor (me) to understand the market and attract the best offer and terms. I am already working with 7 clients prepping their homes for sale next year. Please contact me if you would like to be added, and let’s get to work!
My company, Hoeferkamp Real Estate, has been open over 2 years now! I founded it on October 4, 2018, and have loved it ever since. I truly feel that I can better serve my clientele as a small business owner. I just renewed my lease for 2 more years at the First Bank on Big Bend and 141 in Manchester, and I look forward to many more.
As a comparison to the spring market, which is typically stronger than the fall, I pulled up the current status of 2 areas I was watching closely during the beginning of the pandemic in April and May. These 2 areas were (1) Manchester near my office all prices, and (2) Wildwood just north of Eureka from $400k-800k, both about a mile square. Back on May 28th, the Ratio of Homes were – 8 on market vs 5 under contract in Wildwood; 9 on market vs 16 under contract in Manchester.
As of today, the Ratio of Homes is – 3 on market vs 7 under contract in Wildwood; 14 on market vs 24 under contract in Manchester.
The Wildwood demand totally flipped to a strong seller’s market, and the supply decreased 30%. The Manchester market supply increased 52% while sale activity remained at the same strong level. These ratios, around twice as many under contract than on-market, are highly unusual at any time, much less in October. It is safe to conclude that this type of market is at least as strong now than it was in May.
I do feel the accelerator lessening a bit, so if you have been waiting to buy, the next 3 – 4 months may be your best bet, as I expect the market to have another strong spring in 2021, no matter who wins the election.
Gary Hoeferkamp, Broker - Owner of Hoeferkamp Real Estate 