2018 STL Home Sales Review

Here is a rundown on how 2018 was for the St Louis housing market:

We began the year hot with low inventory and rising prices, leveling off thru summer, than losing some steam in the fall. STL Metro has been on a steady upward price climb since 2012, and kept the pace up with a 4.9% appreciation rate for 2018 and an average price of $245,800 (homes and condos). Last January, I accurately predicted “an increase of 5%, maybe 6%” due to the strengthening economy and low unemployment. The number of sales, however, dipped by 1.2%, likely caused by the tight supply. Average and median days-on-market dropped again, now at 42 and 14 days respectively. Months of Inventory (ratio of homes on market to rate of sales) indicating supply, also dropped, now at 2.4 months.

Zeroing in on the 7 submarkets, North County led the pack with a 9.0% price gain! This time, their greatly improving supporting stats backed up their gain, likely due to being the lowest average price in the region at $103,650, and buyers taking advantage of the affordability factor. West County surged back in 2018 with a 5.6% price gain, after a lackluster 2017. They are still working off some high days on market and home supply, but easily hold onto the 2nd highest price average with $356,343. The South County region, as I also predicted last year, came on strong with a 5.2% price gain with their $203,300 average, and among the best indicators. St Charles lost some headway and clocked in at a 4.2% rise ($246,125 ave) after 2 successive years of 5.5%. Although their supporting stats are still the best in 2 other categories, the percent change was smaller there too. The Central Corridor (mid STL County) slipped to a 3.8% gain, but still have the highest prices in the Lou at $415,872 average. Their stats are mid-range but impressive at those prices, which tend to take longer to sell. STL City (3.5% up) and Jefferson County (3.6% up) rounded out the region with respectable price increases and very similar prices, $183,200 and $181,800. Jeff Co holds onto the distinction of the highest inventory and coming off their price the 2nd least, only .6% (St Charles .4%). The city holds large disparities, with some neighborhoods being pricey and in demand, while others only blocks away may languish, creating more opportunities but with risk.

What does 2019 hold in store for St Louis? We ended 2018 with a shaky stock market, the federal government at odds, volatile interest rates (lower right now!), and very low unemployment but ticking up. I feel confident about our region’s outlook as we continue to import tech and entrepreneurial jobs, rebuild many areas of the city and county while cracking down on crime, and not taking ourselves too seriously. If we grow, great! If we don’t, that’s OK too, as evidenced year after year by our strong support for charitable causes, cultural institutions, sports, education, and the arts. I predict this year will see a 3% increase in home prices, as the cycle is wearing thin. Sellers can take advantage of the significant runup in prices the last 7 years, and buyers can take advantage of still-historically low mortgage rates, and home prices among the lowest of any major metro area in the country.

Do Mortgage Rates Interest You?

With over 60% of the public owning their own home, and a high percentage of the rest stating a desire to, the interest rates on mortgages should keep your interest. With the holidays, cold weather, Super Bowl and stock market plunge, it was easy to miss the upward creep of mortgage rates the last 4 weeks. Pretty much everyone has been warning of rising rates for many years now, as they have remained historically low since 2008 or so. That’s 10 years of ultra low rates. 10 years of homeowners locking in low rates. Will this be the year they truly rise? No one knows for certain, but when they do, lots of people will kick themselves for not buying or refinancing sooner.

Whether a first time buyer, a move-up buyer, relocation buyer, downsizing buyer, sideways buyer for different area; or those refinancing from a rising adjustable rate to a fixed, getting rid of Private Mortgage Insurance, have better credit now, consolidating loans, or just haven’t gotten around to it in 10 years. All of these situations may call for a new home loan, and the interest rate can affect your decision of when and how much, especially when buying. In addition, most every year, the fastest home price appreciation happens from March to June, when the highest number of buyers are writing offers, and I expect this year to be the same. Lately, it has averaged a half to one percent price rise per month for those 4 months. If rates stay the same or drop back, you don’t lose as much, but if they go up, you may lose twice. **One instance where it may pay to wait 3 or 4 months – if you need a high appraisal to hit that 20% equity number on a refinance to eliminate PMI, it will help to have the higher spring sale prices closed for the appraiser to use.

Today, a fixed 30 year mortgage is running around 4.25% with no points. A month ago they were 3.87%. You can lower that rate with a shorter term loan of 20, 15 or even 10 years by a half percent or more to lock in the 3s. This makes a lot of sense when refinancing a loan that has less than 20 years left on it, as your payment should be similar if not less, you still pay off at the same time (not go back to a 30 year schedule), and you can get a lower rate on the shorter term loan. Pay it down faster and build your equity!

This is The Home Equity Coach talking — it is early February, buy in the next 6 weeks and ride the price wave. If you have a home to sell, put it on the market after you buy or even move and get the best of both worlds! Plus locking in a still-low interest rate? Practically money in the bank. If you cannot do this financially, I will walk you thru your still-good options. Now contact me and let’s get to work!

Gary is Bullish on 2018 Home Values, Plus 2017 Sales in Review

Greetings and welcome 2018!

2017 bestowed another solid increase on the real estate market in St Louis, and across the country. Our local residential market notched a 4% annual gain, similar to the past 4 years, and pushed the average sale price for homes and condos to $234,339. Some parts of the metro experienced more, of course, and some less. The number of sales was up 2.3% from 2016, so home supply is really not shrinking, it is a faster increase in buyers than homes coming on market. Average days on market decreased 15% to 44, with median days a meager 16! Months of Inventory (ratio of homes on the market to how many are selling) shrunk 11% to 2.5 months showing the higher demand.

As for submarkets, I compared 4 factors: days-on-market (DOM), average price negotiation (list price to sale price ratio), months-of-inventory, and sale price increase, to determine hot and cold areas of our metro. I found St Charles County and the Central Corridor (Mid STL County) to be in the highest demand with price appreciation between 5.5% to 6%, shorter DOM, and lower supply. The Central Corridor had the highest average sale price in the region, no surprise, at $400,000. South County showed only 3% appreciation but had strong indicators otherwise, so I anticipate a higher price increase there in 2018. North County had the highest value increase at 7%, but the other factors were sluggish – among the highest DOM and most supply, although every category in every submarket across the area improved. I believe the dropping number of distress sales in North Co helped push the average price up. West County showed a 2.3% price increase, and average indicators. My experience here is that homes below $500,000 were selling faster, and higher prices were slower, keeping the average just average. I believe the big spenders in 2017 were staying closer in, as evidenced by the Central Corridor rise. The city of STL (2.3% up) and Jefferson County (4.3% up) were on the slow side, with higher DOM and home supply. Jeff Co, along with their solid appreciation, had a very low negotiation factor of 99.3% list price to sale price (sellers came off price only .7%), a close second to St Charles, so don’t expect to get a low offer accepted there!

Looking ahead to 2018, economic indicators are almost all positive. With the STL unemployment rate now at 3.4%, and running below the national average, now at 4.1%, for about 2 years; the stock market at all time highs, wage growth increasing, the global economy strengthening, and our region’s reputation for affordability, I anticipate an increase of 5%, maybe 6% in home values this year. Now is the time to be planning and prepping for a move in 2018 – contact me now to take advantage of the best market we have seen in 12 years!

Go Home Values!

Home Front News

Spring sales have been strong – My business is ahead of last year, and homes are selling at a brisk pace, but do not think they are all selling over list price, that is still the exception.  Certain areas and price ranges have a heavier demand and higher percentage of multiple offers, but many buyers shy away from competing bids, and are waiting for the initial rush to die off after one or two weeks, then revisit.

Mortgage rates have eased down to 4.0% on a 30 yr fixed no points, down from 4.25% a month ago.

The Economist last week wrote “Millennials Really like St Louis“, citing us as the 4th most popular metro for this age group in the country, ahead of Chicago, Seattle and most others. That follows our recognition this year for the nation’s best park, best zoo, and best custard. Young buyer appeal has been evidenced by the strong home sales this spring. Way to go St Louis!!

Condo/villa sales continue to pick up, due to 3 main factors: rising single family prices, walkability access to desirable areas, and increasing desire for simplification and low maintenance lifestyles.

For the sixth consecutive year, Coldwell Banker Gundaker and NRT LLC’s parent company, Realogy, has received the prestigious designation of being named among the World’s Most Ethical Companies.  This award, presented by the Ethisphere® Institute, highlights companies that outperform their industry peers for ethical conduct.  As part of Realogy and the NRT family of companies, Coldwell Banker Gundaker strives to set the standard for ethical conduct in the market.

Happy spring cleaning!

St Louis Economy Humming in 2016

As our economy goes, so goes our housing market.  St Louis home sales have been quite strong – especially this spring – so what is up with the lukewarm local economic news we have been hearing?

Well it turns out that our numbers (Bureau of Labor Statistics) have been revised upward earlier this year, and we are doing better than previously told.  We knew the unemployment rate for STL has been below the national average for over a year now (currently 4.7% vs 5.0%), but actual job growth seemed sluggish.  Several times over the past few months the number of jobs added first came out small or even negative, then was revised significantly upward.  Unfortunately the revised number does not receive the same news flash as the initial tally.  As of April, St Louis set a new employment record!  Just in February, we eclipsed our 2008 employment peak, beating estimates of sometime in 2017.  In fact, it turns out we have added jobs at a rate faster than the national average the last 12 months – 2.0% vs 1.9%!

The top industries adding jobs here are professional and business sector, leisure and hospitality, health care and financial services.  The slowest are manufacturing and retail.  Even after figuring in the losses, 27,000 jobs were added in the last 12 months in the STL Metro.

How do St Louis home prices correlate?  We have been on a steady climb since 2012 at 4% to 5% annually.  My calculations show that the central corridor in STL passed the 2007 peak last year.  The Federal Housing Finance Agency (the national real estate resource I trust the most) reports that metro STL just surpassed its 2007 peak this spring.  Here again our metro is not as sluggish as is typically reported, as the FHFA states that the national average just past its 2007 peak at the same time this spring.  They add that St Louis home prices rose 7.8% over the past 12 months (I think that is a bit optimistic), which would be the most over any 12 month period since at least 1990 when records began.  Once again, this rate of appreciation is higher than the national average (7.8% vs 5.7%).

With home prices rising steadily, it may be time for you to find out what your home would bring in today’s market.  Contact me now to be on the market this summer or fall.