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.

3rd skyline in STL

Looking east from Art Hill in Forest Park, I now realize we have a 3rd skyline in STL. The always popular Central West End has been busy re-building itself the last few years, mostly with health care and residential, plus entrepreneurial Cortex. This view captures the Kingshighway side, with the Chase on the left and BJC on the right. The crane at left middle will be the One Hundred, a strikingly modern 36 floor apartment tower that will reach 75 feet taller than the Chase.

Several of the newer residential towers in the CWE are condos for purchase, including a renovation of the Chase Park Plaza. These high end units mimic Clayton prices, at the top of STL pricing. Downtown has more affordable space, with many renovated lofts in the last 20 years, and a new 29 story apartment tower going up in Ballpark Village.

Feeling a bit more suburban? There are smaller scale developments in Kirkwood, St Charles, and Creve Coeur, among other growing walkable communities. If you have a desire to purchase a piece of the sky, and be in the middle of the action, contact me now to get into some of these units and decide if it is right for you!

Downtown Buzz

With Downtown STL being in the news for crime stats recently, I have had several clients ask me about the impact on real estate and overall appeal.  I have no doubt the crime factor deters many people from visiting more often or staying longer when they do, but it does not appear to be having a significant impact.  Loft sale prices are slowly rising again, and rental rates are moving up faster.  Downtown residency continues to grow, and even though the loft-purchase market is still down from its peak, distress sales are mostly in the past and the rental market has been adding steadily – above the metro average.

I visit the city’s downtown and mid-town areas regularly for business, special events, and the arts.  I see a new energy recently all week long (even with no baseball game!) with more foot traffic, businesses opening, new construction and renovations that show a more vibrant scene at our metro core.  I notice how blocks that have been quiet in recent years now are budding with new activity.  The core area (river to 18th st) contains about 9000 residents and the greater area (out to 26th st, broader north to south) contains 18,000.  Vacancy is around 6%, a low number and right in line with the suburbs.  More businesses are catering to these people living downtown, and hopefully they will help drive the crime rate down too.

Granted, there are many blocks that are not experiencing this renaissance yet, but please take some time this fall and see for yourself the renovations and excitement on the new Arch grounds (VP Fair is returning there in 2018) and Kiener Plaza; the Old Post Office Plaza at Olive and 9th north of Ballpark Village; the National Blues Museum at Washington and 6th by the convention center; the growing theater district on Grand near the Fox; the innovative Cortex district around Ikea; and many neighborhoods north and south that are taking on new life, including north of Downtown West where the new NGA Western HQ is going in.  St Louis University, Washington University, BJC and other institutions large and small are building long-range plans for our central corridor from the river to Clayton, and investing billions of dollars.  This only adds to our highly rated cultural attractions that have been around for decades.

What a fun time to be in St Louis and be a part of this re-growth!  Make sure you participate in one of the many festivals this weekend that are happening around town in this beautiful weather.

Happy outings!

Hot Restaurant Vibe in St Louis

Greetings!  Glad the flood waters are receding and wishing a quick recovery for those affected.

The restaurant scene in STL has been noticeably building for several years.  In 2015, Gerard Craft put the exclamation point on it by winning the James Beard award for best chef – Midwest for his Niche (now Sardella), the first in St Louis’ history.  Now, in 2017, Kevin Nashan wins the same award, of which only 12 Best Chefs are awarded around the country, for his Sidney Street Cafe.  In addition, Alex Donley of Gioia’s Deli won 1 of 5 America’s Classics in the nation.  A stunning year for our restaurateurs and congrats to all of you for inviting us in to your kitchen day after day!

This recognition exemplifies how St Louis has been reinventing itself from a manufacturing town to a more diverse economy in healthcare, biotech and financials, drawing a younger, more entrepreneurial base to build on for years to come.  A strong restaurant network helps round out an attractive metro that offers many top quality institutions in art, theater, symphony, sports, universities, and family attractions.  It all adds up to giving us Realtors more to brag about when showing relocating buyers, especially since we don’t have mountains or beaches.  Throw in housing affordability and we do win many people over!

Take an evening soon and enjoy one of our restaurants, from Italian to BBQ to modern to locally-sourced to pizza to tacos to the latest craze – ramen, and support our chefs and owners who risk a lot by opening their doors for us.

Bon Appetit!

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!

2016 Stats for St Louis Home Sales

2016 ended up as another strong year for home sales in the St Louis area.  We were predicted by the National Association of Realtors to be one of the hotter selling markets in the country, and we were not disappointed!

Price appreciation, which is always difficult to determine exactly, went up around 4% for our area as a whole.  The number of sales was up 7%, average days on market was down 12%, and months of inventory (ratio of homes on the market to how many have sold) was down 18%, showing a decreasing supply with higher demand.  It was a blessing to buyers that prices did not increase more than they did, but that is a benefit to being in the Midwest.  Historically, even considering the recent recession, home prices have averaged an annual appreciation between 3 and 5% around the country, so a 4% rate is very sustainable, and slightly above long term inflation rates.  Bear in mind that this entails an average amount of repairs and improvements being spent on the home every year.

There are always differing submarkets with hot/cold school districts and ZIP codes in a metro the size of St Louis.  After reviewing days-on-market, average price negotiation amount, months-of-inventory and sale price increase; it appears that St Charles County was the hottest, followed closely by South County, West County, and the Central Corridor.  STL City, Jefferson County and North County followed behind but showed surprising strength.  Those 3 markets took longer to sell with less demand, but prices rose above average, perhaps catching up a bit to the higher priced areas.  Single family homes came out ahead on all statistics over condo sales, and continue to have higher demand, especially one stories.

One of the biggest surprises to me was the 2016 list price to sale price ratio – the average amount the seller negotiates off the list price to sell and close the sale – was only 1.5%!  That is the lowest I can ever recall in 27 years of home sales, quite amazing.  Only 5 years ago this number was 5%, the highest amount I can recall.  Note this percentage does not include any closing credits from seller to buyer, which was likely higher 5 years ago in the slow market.

Here’s to a prosperous 2017!  If you are planning a move this year, please contact me to get going!

School District Rankings

One of the main factors of house hunting for many families is the public school district it is located in, which can substantially affect the value of the property.  Thus buyers moving in from out of town ask me frequently what school districts are the best.

Below are links to four different websites that rank public schools across the nation, I have narrowed to Missouri results.  Information on private schools are not as easy to find.  Of course, they all use different criteria thus affecting the rankings.  Ladue high school, long considered one of the best in the area, is listed as extremely high (3 out of 528) on the US News list, but only 7 out of 10 on GreatSchools.  Zillow and Realtor.com have incorporated the GreatSchools system and make those rankings available on each home listing for easy reference.  Those are not ranked in relation to each other, just on a scale of 1 to 10 but includes middle and elementary schools.  While rankings based only on state-supplied test results is the quick and easy method, they can vary significantly year to year, and do not take into consideration other factors you may consider important.  There is no easy answer to the best school for your family other than doing some research, asking questions and visiting the schools.

FYI:  (1) We put our 2 kids thru Parkway South and think highly of it, although there are many excellent schools in the area, public and private, in STL County, city and surrounding counties;  (2) I attended Lutheran South.

Niche:

https://k12.niche.com/rankings/public-school-districts/best-overall/s/missouri/  —  based on eight factors including academics, diversity, health/safety and sports.

 

GreatSchools:

http://www.greatschools.org/missouri/  —  each school is given a number from 1 to 10 based on test scores in most states, including Missouri.  Student Growth and College Readiness are added factors in certain states like IL.

 

SchoolDigger:

https://www.schooldigger.com/go/MO/districtrank.aspx  — based on test scores from the MO Dept of Education.

 

US News:

http://www.usnews.com/education/best-high-schools/missouri  —  public high schools based on state testing adjusted for economically disadvantaged students, graduation rates, and college readiness (AP testing). 

 

 

Happy Schooling!

What a Hole in the Wall

How many nail holes are acceptable when you move into a house?  There is not a stock answer to this.

Unless you are buying new construction, you should expect the home at closing to have some small nail holes here and there.  The more conscientious sellers will remove wall hangings well before closing, patch and touch up with matching paint every single hole – but that is the exception.  I have found that the vast majority of buyers will accept some small holes at the final walk-through, and the vast majority of sellers will balk at any demands that every single hole be filled and touched up.  Our contract states: “seller warrants that the property will be….delivered to buyer in its same condition…as it was on the date of this contract.”  When you go thru the home as a buyer about to make an offer, pay attention to how many items are on the walls.  Expect that many holes, as my interpretation of the above contract line says as much.  Of course there is room for disagreement in what that line means, but my experience with hundreds of walk-throughs is if they are hardly noticeable, they are acceptable.  Once they are readily noticeable (if you can see them across the room at a glance), they are no longer acceptable.  Most sellers realize this and make corrections accordingly, by fixing the more noticeable ones.

I have had buyers insert a clause into the contract stating that seller will patch and paint all nail/wall holes, which addresses the issue upfront.  However, that tends to make the seller less willing to negotiate with that buyer as they fear a difficult inspection process, especially if there is competition.  Other factors to consider:  How hard will it be to match the paint color and sheen if none exists; is the hole in wallboard or wallpaper; are you going to paint walls or strip paper anyway; how bad do you want the house; is it a seller’s or buyer’s market?  It is similar to addressing how clean the home will be left, it can be difficult to quantify and you risk goodwill by addressing the issue.  Not having matching paint and time to do it seem to be common reasons for sellers not to take care of them.  But with paint centers having the ability to closely match a sample you take in (quarter size taken from inconspicuous spot), and a little planning ahead, that can avoid the pain of a loud complaint the day before closing, when timing is much more critical.

In the end, as with so many things in selling homes, it pays to follow the spirit of the agreement, treating the other party as you would like to be treated.  Leave the home in the best condition you possibly can – it pays off immensely in buyer satisfaction, and ultimately the sellers too.

Happy Patching!

Gary’s HomeFront News

Fall sales have held strong, – I have sold 3 homes in the last 4 weeks heading into the holidays, all in the Parkway South, Manchester – 63021 submarket.  The number of homes on the market continues to be tight heading into winter, with many buyers choosing this time of year to buy rather than the more competitive spring and summer markets.  Home price appreciation appears to be in the 4% range for the year for St Louis, continuing a steady move upward since 2012, recapturing the lost equity for so many homeowners from 2008-2011.

Since the election two weeks ago, mortgage rates have moved up significantly from 3.5% to 4.0% on a 30 year fixed.  If you long for the days in the low 3s, you can still get a 15 yr fixed at 3.25%.

The St Louis area added 3500 jobs in October, as the metro employment continues to grow at the fastest pace in 20 years.  The Bureau of Labor Statistics show a gain of 32,500 jobs in the metro over the last 12 months, amounting to a 2.6% increase, well ahead of the US average of 1.7%.

In between holiday prep and gatherings, don’t forget to perform a few pre-winter tasks on your home — pool and irrigation system closings, disconnect outside hoses, have the chimney and gutters cleaned, change furnace filter (and smoke alarm batteries if you did not at time change), and get the snow shovel ready!

Our annual office Thanks dinner for the Des Peres Police and Fire was today.  We appreciate all the police and fire district personnel around STL and the country!

Home Appliance Reviews

Last time you went shopping for an appliance, did you look at any reviews to help in your decision?

Reviews are everywhere now – restaurants, hotels, computers, even Realtors.  It is no surprise, then, that home appliances have their share.  The question becomes how accurate they are.  Without fail, I can find many that love one model in particular, and many that hate the same one.  This is common with most brands that I have researched, even the more expensive models.  Whether it is on the manufacturer’s website, the appliance store’s, or a third party.

Consumer Reports should be trustworthy, right?  They make a living out of unbiased research and reporting their findings.  The problem I find with CR is brand names can be on the top, middle or bottom tiers, depending on the model.  True, there can be a larger percentage of one brand over another, but the second issue is how they arrive at the ratings.  Do I care if the display is easy to read, or the style is not exciting?  I can readily see that when comparing online or in the store.  I care mostly about reliability that I cannot see.  Can you trust the salesperson, or are they just pushing one or two that pay them more?  I don’t think there are any fiduciary duties to protect you at Best Buy or HHGregg.  If you develop a personal relationship with a store in particular, especially locally owned, you may feel a level of trust.  Or your friends and colleagues who have recently purchased can share their results.

I do basic research and look for trends, if I find the same brand and/or model that gets strong ratings from different sources, and then confirmed by a friend or retailer, I feel confident on the purchase.  After awhile, you start trusting certain brands.  That leads to another problem – brands evolve, get better or worse, are bought out, or simply overtaken by competition.

Personal experience over the last 3 years:

– Samsung refrigerator, I rate 3.5 of 5 (overactive ice maker and water in vegetable bins), did no research due to great Black Friday purchase

– Kitchen Aid dishwasher, I rate 4.5 of 5 (slight leak one time, door rubs), this brand and Bosch were among the best rated.

– Samsung clothes washer, I rate 5 of 5 so far (just bought last week), this brand, LG and Speed Queen were among the best rated.

Good Luck and Happy Shopping!