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The Importance Of Accurate Home Price Data And The Danger Of Bad Data

Ok, I’ll admit it, I know I’m sort of a big data nerd and not everyone is, so I may be in the minority when it comes to the attention I give, and time I devote, to market data, stats, trends and the like.  However, while not everyone wants to study this stuff, anyone in the market to buy or sell real estate either needs to be up to date on what is going on in the market in terms of price (and the other stuff I mentioned) or be represented by a real estate agent that is.  Otherwise, without this information or, worse yet, with bad information, home buyers and sellers can make some really bad decisions.

There is a lot of “bad” data out there and it can hurt you!

When I started in the real estate business, way back in 1979 and the age of 18, it was very hard to get much data on home prices, sales, etc, heck, it wasn’t even easy to find out what was listed for sale.  Today, largely a result of the internet, things are much different.  There is plenty of data and information available to home buyers and sellers today and it’s easy to find. The hard part today isn’t getting the data and information, it’s getting good, accurate and relevant data and information.  You don’t have to spend much time online, whether on social media sites, real estate websites or even “news” sites, to discover all sorts of inaccurate, incomplete, dated, useless and conflicting data and information.  For example, in the past week, I saw reports, even from people in the real estate profession in St Louis, indicating home prices declined last month from a year ago to the tune of about 3% or so, but I don’t believe that is the case.  Bear with me and keep reading and you will see why I say this as well as what I think is accurate with regard to St Louis home prices.

Usually the source means well and the data is believed to be accurate, but….

With regard to real estate, I think most of the data published on real estate sites, social media sites, etc by real estate agents as well as others in the industry, is believed by the person putting it out there to be accurate, the problem is it often is not. The problem is, without really digging into the source of the data, or examining what criteria was used to compile the data or report, people are often passing along information they are just assuming to be accurate but often is not.

So, where can you find good, accurate and relevant information and data on the St Louis real estate market?

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Continue reading The Importance Of Accurate Home Price Data And The Danger Of Bad Data

St Louis Home Sales and Home Prices Are Both Up Over 5 Percent From A Year Ago

St Louis continues to enjoy a pretty robust real estate market, albeit it a challenging one for buyers due to the low inventory of homes for sale in most areas, with St Louis home sales, during the past 12 months, up over 5 percent from the prior 12-month period and St Louis home prices up over 5 percent for the same period as well.   As the table below shows, in the 5-county core St Louis market, there were 27,437 homes sold in the 12-month period ending May 31, 2017, an increase of 5.13% from the prior 12-month period when there were 26,099 homes sold.

Year-over-year for the month of May looks good as well…

As I frequently comment, looking at home prices and sales activity for a 12-month period is the best way to get a realistic view of the market, less affected by timing of sales due to weather, day of the week the last day of the month falls on etc, it’s still worth looking at the most recent month and comparing it to the prior month, as well as prior year, to help spot trends or changes in the trend.  With this in mind, as the chart below shows, for the St Louis core market there were 3,070 homes sold in May, 2017, an increase of 21.2% from the month before when there were 2,533 homes sold, and an increase of just under 1% from May 2016 when there were 3,042 homes sold.  As the chart also reveals, homes sold in St Louis during May, 2017 were sold for a median price of $185,000, an increase of 2.8% from the month before when the median sales price was $180,000 and a slight increase of just one-half of one-percent from May 2016 when the median price St Louis homes sold for was $184,000.

Franklin County has the largest increases in home prices and sales during past 12 months…

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Continue reading St Louis Home Sales and Home Prices Are Both Up Over 5 Percent From A Year Ago

No Listing Shortage Of Million-Dollar Listings In St Louis

The low inventory of homes for sale in St Louis comes up today in most conversations related to the St Louis real estate market.  St Louis home buyers have struggled to get to new listings quick enough, and then make strong enough offers, to successfully beat out the competition.  Well, while that may be the story for the majority of the St Louis real estate market, that is not the story for the $1Million+ market.

As the table below shows, there are currently 287 homes listed in St Louis County and St Charles County at a price of $1 million dollars or more which, based upon current sales rates, translates into more than a years supply.

St Charles County and St Louis County $1 Million+ Homes For Sale

(click on table for up to date chart and table)

St Charles County and St Louis County $1 Million+ Homes For Sale

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Home Flipping In St Louis Hits Highest Level In 8 Years

Home flipping accounted for 8.6 percent of all the home sales in the St Louis MSA during the 1st quarter of this year according to a report released today by Attom Data Solutions.  This is an increase of  14.7% from the prior quarter when 7.5% of the homes sold were flips and is an increase of 6.2% from a year ago when 8.1% of the homes sold in St Louis were flips, according to the report.   For the purposes of this report, a “flip” was defined as a property that was sold in an arms-length sale for the second time within a 12-month period.

St Louis house flipping profit margins…

During the first quarter of 2017, the median purchase price of houses that were flipped was $75,000 and the median resale price, 158 days later on average,  was $129,400 for a gross profit margin of $54,400.  Before you get too excited though, remember this is just the gross margin between the price paid and the price resold at.  The actual net profit would be much lower as there would be costs related to the acquisition and sale of the property as well as rehab/repair costs and carrying costs, none of which is available publicly, so we can just talk about gross margins here.

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St Louis Home Prices Verses Rent Continues To Show Value In Home Prices

There are several ways to look at home prices and  home affordability as well as to argue the merits of homeownership versus renting, however, one my favorite metrics to consider along these lines is the relationship between home prices and rental rates.  Most home buyers, that are seeking a home to live in, never consider what the home they are considering purchasing would rent for, since that is not their intended use.  However, there is a relationship between home values the potential rental income in that there is a tipping point reached when the cost of owning a home exceeds the cost of renting a comparable home in the same neighborhood by too much, there becomes an incentive to rent rather than buy.  Along the same lines, if rental rates get so high that, for about the same money, or even less, one could buy the home they are renting, there exists a strong incentive to buy a home.

With this in mind, when you look at the chart below from the St Louis Federal Reserve, which shows the St Louis home price index, the blue line, and the Consumer Price Index for Rent, the red line, you can see there is a pretty significant gap between the two.  The chart goes back to 1975 and, as you can see, historically the home price index and CPI for rents have increase at relatively similar rates, with home prices lagging slightly behind from about 1980 through around 2004 but, even then, there was a pretty similar trend.  As the housing bubble in 2006 approached, you can see the home price trend shot upward and past rents only to fall sharply around 2008 after the housing bubble burst.  Since hitting bottom around late 2011, home prices have been trending upward, but, as illustrated, there is a much larger gap between home prices and rents then is the historic norm which is a good thing with regard to home prices. Based upon what I see on the chart (you can click on the chart to be taken to our live, current version which is interactive) I would expect the gap between rents and home prices to close at some point in the near future.  This can be accomplished in one of two ways:  home prices can rise at a greater rate than rents rise, or rents can fall or remain flat, or, of course, some combination of the two.  In either event I think this is good data to support sustained home prices and also shows that buying a home could well be a better investment than renting.

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St Louis Real Estate Market Update VIDEO – June 2017

What a great time to be a home seller! This month, as the video below shows, there remains a shortage of homes for sale in many areas throughout the St. Louis area making it fun for sellers and challenging for buyers  Listings that have been properly price, positioned in the market and marketed appropriately are selling in a matter of days in many areas and price ranges throughout St Louis.

Whether you are thinking of buying or selling and would like me to look at your situation and your market to determine the best strategy, just call, or text me, at 314.332.1012 and I’ll be happy to help!

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Continue reading St Louis Real Estate Market Update VIDEO – June 2017

Mortgage Loan Delinquency Rates Hit Lowest Level Since 2000

According to a report just released by Corelogic, the 30-59 day mortgage delinquency rate in March (the most recent month reported) fell to just 1.7%, the lowest level since January 2000.  The “seriously delinquency” rate (30+ days late) fell to 4.4% in March, the lowest level sine November 2007, according to Corelogic.

In addition, the “transition rates” all improved as well from a year ago.  Transition rates show which way the borrowers are moving, from slightly delinquent to more delinquent, or from slightly delinquent to current for example.  Below are the transition rates for March 2017, according to the Corelogic report:

  • Borrowers going from current to 30 days late – 0.6% for March 2017, down from 0.7% in March 2016
  • Borrowers going from 30 days late to 60 days late – 11.6% for March 2017, down from 13.2% in March 2016
  • Borrowers going from 60 days late to 90 days late – 20.8% for March 2017, down from 23.1% in March 2016

All of this is good news for the real estate industry as the trends are positive and are is a good “leading indicator” of what is to come.  As mortgage delinquencies decrease, foreclosures, short sales and other distressed home sales decline, putting less downward pricing pressure on the housing market and providing sustainability to the improving housing market.

Speaking of mortgages, if you are considering refinancing, want to know what current rates and terms are, or would like to get pre-approved for a mortgage, I would highly recommend speaking with Ryan Derryberry, a mortgage loan professional with Movement Mortgage.  Ryan is a great guy, is honest and knows his stuff. Movement is a great company, founded and operated on great principals and offer some mortgage products you won’t find anywhere else….More information on Ryan, including his contact info, can be found here.

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Charging Pet Deposit For Service Dog Costs Landlord $20,500

The U.S. Department of Housing and Urban Development (HUD) announced last week that the Silver State Fair Housing Council,  and ERGS, Inc.,  the owner/manager of four apartment complexes in Reno, Nevada,  had reached an agreement to settle four Fair Housing complaints.  Silver Lake State Fair Housing Council filed the complaints on September 20, 2016 against ERGS, Inc. alleging ERGS had violated the Federal Fair Housing Act by charging a pet deposit to tenants with service animals.

Under the settlement agreement, ERGS, Inc. must pay $20,500 to the Silver State Fair Housing Council as well as  adopt written policies that are consistent with the Fair Housing Act and provide fair housing training for all employees who interact with tenants or applicants.

Under guidelines issued by HUD back in April 2013 it is very clear that, not only must a landlord provide reasonable accommodations to people with disabilities who required assistance animals, they must not treat the assistance animal as a pet and charge a pet deposit.

 

Disability-related claims are the most common type of Fair Housing complaint filed today, accounting for over 58 percent of the 4,9000 fair housing complaints filed last year.

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The City Of St Louis Has Youngest Population and Lowest Homeownership Rate In Area

In the real estate community there are frequent discussions about the millennial’s and their impact on the real estate market.  Since their generation makes up the largest share of the population presently,  their interest, or lack thereof, in homeownership definitely has the attention of us in the real estate industry.   The consensus among many in the real estate industry is that  millennials don’t value homeownership as much as their baby boomer parents did, and do, however, they don’t necessarily have anything against the idea.  The millennial generation seems to be more driven by lifestyle and flexibility than whether or not they own where they live.

With this in mind, today I wanted to look at the median age of the city of St Louis as well as the surrounding counties to see where the younger people are migrating as well as look at the homeownership rates for those areas.  While I don’t know that there is a relationship between the median age of an area and the homeownership rate necessarily, there well could be.

The City of St Louis is where the young people are…

As the map below shows, the city of St Louis, with a median age of it’s population of 34.6 years, has the youngest population followed by St Charles county with a median age of 37.4 years.

The City of St Louis has the lowest homeownership rate by far…

As the second map below shows, the city of St Louis also has the lowest homeownership rate at 47.8%, however, St Charles County, the county with the second youngest median age has one of the highest homeownership rates in the area at 81.34%.

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St Louis County Circuit Court Judge Strikes Down St Louis County Landlord License Ordinance

On June 2, 2017, in a victory for landlords, St Louis County Circuit Court Judge Gloria Clark Reno declared St Louis County’s landlord license ordinance unconstitutional. The landlord license ordinance was passed by the St Louis County Council, with a surprise vote at the Council meeting on October 18, 2015 while the council members ignored the outcries from many private property rights advocates, including the St Louis Association of REALTORS, who questioned, among other things, the constitutionality of the ordinance.   The ordinance went into effect on December 31, 2015 however, as a result of a lawsuit filed by the St Louis Association of REALTORS on December 29, 2015, Judge Reno issued a temporary restraining order on January 7, 2016 prohibiting St Louis County from enforcing the ordinance.

The St Louis County landlord license ordinance, landlords were required to obtain a license annually before renting out property in St Louis County.  Many aspects of the ordinance appeared to be unconstitutional and to infringe upon the private property rights of landlords causing many groups to speak out against the ordinance.

The complete order by Judge Reno is below.

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St Louis Home Sales Fall Slightly in May From Year Ago – Prices Up

There were 2,707 homes sold during May within the St Louis 5-county core market down slightly from May 2016 when there were 2,736 homes sold according to the latest data from MORE, REALTORS (see chart below).  The median price of homes sold in the St Louis core market during May 2017 was $125 per square foot, an increase of 2.5% from May 2016 when the median price of homes sold in the St Louis core market was $122 per square foot.

As I often mention, doing a year-over-year comparison of home sales and prices for one month is not the most accurate way to really get a look at the real estate market, however, it can be indicative of a changing trend though.  To get a better look at the market, I suggest comparing the most recent 12-month period with the prior 12-month period, which is exactly what we do in our STL Market Report, shown below.  As the table reveals, there were 27,437 homes sold in the 5-county core St Louis market during the 12-month period ending May 31, 2017, an increase of 5.13% from the prior 12-month period when there were 26,099 homes sold.  As the table also shows, the median home price increased 5.22% during this period, although the current pricing trend for active listings shows a decline.

 

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Characteristics of New Homes Sold In 2016

The U.S. Department of Commerce just released it’s 2016 CHARACTERISTICS OF NEW HOUSING in which it revealed features, amenities, prices, sizes, etc of new homes built and sold during 2016 in the United States.  You can see all the data in the complete report for the U.S. by clicking on the link however I’m going to just focus on the homes built here in the midwest region.

There were 69,000 new homes sold (single-family) here in the Midwest Region of the United States, down from a peak of 205,000 in 2005.  Eleven percent of the single-family homes sold were attached homes (8,000) and the remaining eighty-nine-percent (62,000) were detached homes, according to data from the U.S. Census Bureau.

Facts and Figures For New Homes Sold In The Midwest during 2016:

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Is It Better To Invest In a Luxury Home In St Louis County or City?

From the outset I need to admit that this is probably a pointless article as the mindset of someone that would want to buy a luxury home ($750,000+) in St Louis County is quite different than someone that would want to buy one in the city of St Louis, and vice versa, so neither will probably be swayed in their preference by which location offers a better return on their investment.  Having said that, I still thought it would be interesting to examine the market and see how luxury home buyers have fared over the years in both locations.

St Louis County Luxury Home Buyers Fared Much Better Over Past 10 Years Than St Louis City Buyers

As our 10-year chart below shows, luxury home prices (homes that sold for $750,000 or above) have done much better in St Louis County, with the median price per foot represented on the chart below by the yellow line, than they have done in the City of St Louis (brown line).  The median price per square foot (the most accurate way to compare home prices) for luxury homes sold in St Louis County during 2007 was $230 and in 2017 luxury homes have sold in St Louis County thus far at $244 per square foot, an increase of 6.1% from 10 years ago.   For the city of St Louis, luxury homes sold for a median price of $185 per square foot in 2007 and for 2017 have sold for a median price of $152 per square foot, a decline of 21.7% from 10 years ago.   As the chart illustrates so dramatically, St Louis county luxury home prices were not impacted by the market crash of 2008 nearly as much as in the city of St Louis.

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What Is The Value of a Garage?

Of the 6,137 homes that were sold in St Charles county during the past 12 months, 5,839 (95%) of them had a garage.  Nearly 68 percent of the homes sold with a garage in St Charles county had a 2-car garage, nearly 24 percent a 3 car garage or larger and just 8.5 percent had a one-car garage.  So, if you are a St Charles county homeowner with a one-car garage, how much can you expect to be impacted price-wise when you sell? Of, if you are a buyer, looking at a home in St Charles county with a one-car garage, how much should you discount what you pay for it versus a similar home with a 2-car garage?

To address these questions, I went to our STL Market Charts  to pull data from our MLS database for home sold in St Charles county in the past 12 months to see how, on a price per foot basis, the price varies based upon garage size.  For the sake of this discussion, and to keep it to an “apples to apples” comparison the best I could, I pulled data for 3 bedroom homes in St Charles county, listed at $150,000 – $250,000 and sold within the past 12 months.

As the tables below illustrate, the 1,506 homes sold with 2-car garages sold for a median price of $122 per square foot and the 48 homes that sold with 1-car garages sold for a median price of $120.41 per square foot or about 1.3% less than it’s 2-car counterpart.   Naturally, this will vary by price range and area, but for the typical 3 bedroom St Charles county home, it appears a 2-car garage is worth about $1.60 per square foot, or about 1.3%, more than a similar home with a one-car garage.

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Zillow’s “New” Instant Offer Is Nothing New

I am always marveled by great marketing and promotion therefore I must give a tip of the hat to Zillow® for their new “Instant Offer” program.   First, it’s getting them tons of attention and press, particularly within the REALTOR® community, which is probably where it is the most beneficial to them since real estate agents are, after all, Zillows’® paying customers. Courtesy of Inman News, REALTOR.com and others, this new program has received the equivalent of thousands and thousands of dollars of free advertising, which is the type of thing I love and dream of getting this type of free publicity for my firm.

Instant Offer concept is not new…

So, why do I say it’s nothing new?  I have nothing against Zillow® (although many in the REALTOR® community are not fans as they see them as a threat) however, I really don’t see anything “new” or revolutionary about their instant offer program.  Basically, according to their website, what their program does is allows you to submit information on your home to them which then goes to a group of national investors who then submit you a cash offer for your home.  Then, an inspection is done of your home (I’m guessing the offer is subject to this inspection being favorable) and if so, then you proceed to closing.  Homes have been sold in this manner for decades, including right here in St Louis, so it’s nothing new.  When I entered the real estate business here in St Louis in 1979, there were many “speculators” in St Louis, including the broker I worked for, that would make sellers a cash, as-is, offer on their home and would offer to close as fast as 24 hours.  So, basically, the same thing as the “new” Zillow® instant offer program with a few exceptions including that our offers were typically unconditional (other than that the seller had good title), truly as-is and we were local, people the sellers could meet, talk with and establish a relationship with as they contemplated whether or not this approach to selling their home was a good decision.  Over the years, I was involved in the purchase of over 2,000 homes in this manner right here in St Louis.  Today, thanks to internet webinars, reality TV shows and just a wealth of information being readily available, there are many, many people, that, in addition to the established “professional investors”, out there trying to buy real estate in this manner.

Do you want an “instant offer” on your home?

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Ballwin Tops List On Home Appreciation & Safety Index

It is common for home buyers, particularly those moving to St Louis from outside the area or perhaps moving to a different part of town than where they currently reside, to inquire about crime rates and other safety issues related to the area they are looking to move to.  Today, like pretty much every other topic out there, there is a wealth of information available on the internet with regard to crime activity however sometimes it is difficult to find real data and not just “headlines” from local news stories or social media posts.  Therefore, in keeping with our mission of providing up to date, accurate and trustworthy information that is relevant to homeowners, as well as buyers and sellers, we developed our own Index to make it easier to people to evaluate an area.  Since we are in the real estate business and the people we are providing this information for are interested in home values, we wanted to have our index consider both crime rates as well as home price appreciation.  As a result, our Home Appreciation & Safety (HASTM) Index was born.

The crime data we use comes from the Uniform Crime Reporting Report from the Missouri Highway Patrol for the year 2016 for violent crime and property crime, the population numbers from the U.S. Census Bureau and the home price data from STL Market Reports.  For our Home Appreciation & Safety (HASTM) Index, we multiply the median home price change by the rate of violent crime.   Since the larger the crime rate number is (in terms of 1 violent crime per X number of people) the safer the area is, and the higher the home price change, the more appreciation there is, so when multiplying these together the higher the ending index number is, the better.

City of Ballwin With Low Crime Rate and Good Home Appreciation Tops List For Home Appreciation & Safety (HASTM) Index

Of the cities reviewed and shown on the table below, Ballwin had the lowest rate of crime per capita for both violent crimes and well as property crimes with rates of 1 in 2,780 and 1 in 128 respectively.  Add to that Ballwin’s above-average home price appreciation over the past 12 months of 7.20% and the result is a 200.14 on our Home Price Appreciation/Safety (HASTM) index.  This gives Ballwin the highest index on our list making it perhaps the best place on the list to invest in a home.  Coming in a distant second is the city of Creve Coeur with an index of 116.97.

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St Louis’ Slowest Selling Neighborhoods

Even in this low-inventory sellers market the St Louis housing market has been experiencing for some time now, there are areas where homes are selling slower.  For home buyers that are tired of the fierce competition that exists for most new listings and tired of losing out, these slower selling areas may offer an opportunity to buy.  As the table below shows, at the top of the slow selling list is the city of Pevely in Jefferson County where the average days on market is 331, followed by New Haven and Sullivan, both in Franklin County,  at 258 days and 248 days respectively.  Hey, I realize these areas are out of the St Louis area a bit, but I didn’t say it was going to be convenient to chase opportunity.    Farther down the list are some areas closer in, such as Ladue and Frontenac, but with the convenient location comes higher prices.

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Homeowners More Optimistic About The Value of Their Home Than Appraisers Are

It probably won’t come as a surprise to you that many homeowners feel their homes are worth more than perhaps they are, particularly when the time comes to sell them.  This is evidenced by the Quicken Loans’ Home Price Perception Index  (HPPI) which looks at appraised values of homes versus the the homeowners estimate of value.  The HPPI chart below shows that, for April 2017, appraisal values of homes came in nearly 2 percent less (1.9%) than the homeowners expectations. As the chart reveals, for the past two years homeowners opinions on their homes value have exceeded that of appraisers, however, for roughly a two-year period from 2013 until late 2014, the opposite was true.

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Zillow Under Investigation By CFPB Over Co-Marketing Program With Real Estate Agents

Zillow, the behemoth real estate search site, revealed in it’s Form 10-Q filed with the Securities and Exchange Commission earlier this month for first quarter 2017, that the Consumer Finance Protection Bureau (CFPB) is investigating some practices by Zillow.  According to the filing, what is under review is their co-marketing program in which the CFPB is alleging that Zillow violated parts of both RESPA as well as the Consumer Financial Protection Act.  The complete Form 10-Q can be viewed here.  On page 40 (outlined in red by me) is the section where Zillow makes this disclosure, and I have pasted that section of the report below as well (the emphasis and color have been done by me).

Excerpt from Zillow’s 10-Q –
“In April 2017, we received a Civil Investigative Demand from the Consumer Financial Protection Bureau (“CFPB”) requesting information related to our March 2017 response to the CFPB’s February 2017 Notice and Opportunity to Respond and Advise (“NORA”) letter. The NORA letter notified us that the CFPB’s Office of Enforcement is considering whether to recommend that the CFPB take legal action against us, alleging that we violated Section 8 of the Real Estate Settlement Procedures Act (“RESPA”) and Section 1036 of the Consumer Financial Protection Act. The purpose of a NORA letter is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action may be recommended or commenced. This notice stems from an inquiry that commenced in 2015 when we received and responded to an initial Civil Investigative Demand from the CFPB containing a broad request for information. We believe our response to the NORA letter addresses the CFPB’s concerns related to our co-marketing program under which a lender pays us to appear in advertising alongside a real estate agent. We are continuing to cooperate with the CFPB in connection with their most recent request for information. We continue to believe that our acts and practices are lawful and that our co-marketing program allows lenders and agents to comply with RESPA. Should the CFPB commence an action against us, it may seek restitution, civil monetary penalties, injunctive relief or other corrective action. We cannot provide assurance that the CFPB will not ultimately commence a legal action against us in this matter, nor are we able to predict the likely outcome of the investigation into this matter. We have not recorded an accrual related to this matter as of March 31, 2017 or December 31, 2016, as we do not believe a loss is probable. There is a reasonable possibility that a loss may be incurred; however, the possible loss or range of loss is not estimable.”

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Foreclosures In St Louis Increase In April

There were 1,814 foreclosure filings on homes in the St Louis metro area during the month of April 2017, an increase of 13.23% from the month before and an  increase of 12.25% from April 2016, according to a report just released this morning by ATTOM Data Solutions.  As the table below shows, all 7 Missouri Counties included in the report saw an increase in foreclosure activity last month from both the prior month as well as a year ago.  Of those, Lincoln County (which has very little foreclosure activity) saw the largest year-over-year as well as month-over-month increase, follow by St Louis County with a 45.37% increase from the month before and Franklin County with a 71.43% increase from a year ago.

 

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Missouri Insurance Department Providing Assistance to Flood Victims With Insurance Needs

The Missouri Insurance Department announced they will have Consumer specialists in place this week and next at Multi-Agency Resource Centers (MARC) throughout the state to assist flood victims with their insurance claims. The consumer specialists will be at the locations below, on the dates indicated and will be able to assist victims of the recent flooding with understanding their insurance policies as well as with filing insurance claims.  The Missouri Insurance Department did point out however that “generally, homeowners insurance does not offer protection against flood losses. Homeowners should check their policies for exclusions, such as ‘water damage’.”

Consumers that have questions or concerns about their insurance coverage can also contact the Missouri Insurance Department’s Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.

Multi-Agency Resource Centers (MARC) Where MO Insurance Dept Consumer Specialists will Be

 

May 10 Ellington Ellington City Hall, 100 Tubbs Avenue
May 10 West Plains West Plains Civic Center, 110 St. Louis St.
May 11 Poplar Bluff Memorial Baptist Church 2215 South Broadway Bldg. C
May 11 Eminence United Methodist Church, 18321 Church St.
May 12 & 13 Van Buren Van Buren Youth & Community Center, CR 1204 State Hwy D
May 12 & 13 Valley Park Manchester United Methodist Church, 129 Woods Mill Rd.
May 15 Thomasville TBA
May 15 Pacific Pacific Eagles, 707 West Congress Pacific, MO 63069
May 16 Gainesville Gainesville School District, Gymnasium
May 16 House Springs Northwest Valley Middle School, 4300 Gravois Rd.
May 17 Doniphan Caring Community Partnership, 209 Highway St.
May 18 Arnold Arnold First Baptist Church, 2012 Missouri State Rd.

While it is too late to help with the recent flood, there is flood insurance available through the National Flood Insurance Program (NFIP).  You purchase flood insurance, just like homeowners insurance, through insurance agents.  There are requirements to be eligible as well as generally a waiting period before the coverage takes affect.  If you would like to know more about flood insurance available through the National Flood Insurance Program (NFIP), you can contact them at 800-427-4661.

Want to know if your property is located in a flood zone?  Go to STLflood.com for an interactive flood map where you can enter your address and view your property on the flood map to determine if it is located within a flood hazard area:

 

Foreclosure and Serious Delinquency Rates Continue to Decline in Missouri

The foreclosure rate in Missouri continues to decline with the foreclosure rate for February 2017 coming in a 0.4 percent, according to a report just released by CoreLogic.  The rate for February is down slightly from a year ago when the Missouri foreclosure rate was 0.5 percent.  Based upon the mortgage serious delinquency rate (90 days or more) as well as delinquency rate (30 days or more), both lead-indicators or predictors of things to come with regard to foreclosures, the foreclosure rate will continue to decline in the near term.  The mortgage delinquency rate for February 2017 was 4.9%, down from 5.1% in February 2016 and the serious delinquency rate was 1.8% during February 2017, down from 2.2% a year ago.

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St Louis Real Estate Market Update VIDEO – May 2017

The St Louis market continues to be hot although there is a little downward pressure on pricing.  This month, as the video below shows, the St Louis real estate market continues to be low on competition and favoring sellers although the home buyers out there are savvy and are not reacting to over-priced listings.  Listings that have been properly price, positioned in the market and marketed appropriately are selling in a matter of days in many areas and price ranges throughout St Louis.

Whether you are thinking of buying or selling and would like me to look at your situation and your market to determine the best strategy, just call, or text me, at 314.332.1012 and I’ll be happy to help!

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St Louis Spring Real Estate Market Snapshot

We are about half way through the spring real estate market in St Louis, normally the most active time of the year for the St Louis real estate industry,  and, thus far, the 2017 spring market is shaping up pretty good!  As our chart below illustrates, there were 4,582 homes sold in the 5-county core St Louis market during March and April of this year, an increase of 2.4% from last year when there were 4,473 homes sold and the median price per foot of those homes sold was $126 per foot in April, an increase of 6.8 percent from April 2016 when the median price per foot was $118.

Just comparing a month, or even two as I did here, to the year before doesn’t always paint the true picture so I also like to use our table that shows data for the most recent 12 month period and compares it to the prior 12 month period.  This gives a little broader view of the market and is less affected by seasonality and even weather that can affect home sales.  As the table for the 5-county core market below the chart shows, for the 12 month period ending April 30th 2017 home sales increased over 6% from the prior 12 month period and the median home price was up over 5.5%.  With just a two and a half month supply of homes for sale, inventory is still very low and the market still favors sellers.

While some of the data shows some price resistance, everything else definitely points to a sellers market. The bottom chart shows the median amount of time listings that sold were on the market before selling and you can see the trend continues to be low.  A couple of other little tidbits in all this data, that again points to a sellers market, but does show it is price sensitive are, as the table shows, the price per foot of active listings is lower than the listings that sold, and the median time for homes to sell in April was only 14 days however, the average time on the market for active listings is 136 days.  From this, I think we can draw a conclusion that the market, even with a low inventory,  is price sensitive and properly priced homes are selling very quickly while over-priced ones sit on the market.

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Homeownership Rate In St Louis During 1st Quarter of 2017 Drops To Lowest Level In Years

The homeownership rate for the St Louis MSA during the 1st quarter of 2017 was 61.6% according to recently released data from the U.S. Census Bureau.   As our table below shows, the current homeownership rate for St Louis is at the lowest level in our records.  On the table I also compute a rolling 12 month average which helps smooth out seasonal variations in the data and it shows an average homeownership rate of 64.8% over the past 12 months, down from 68.8% for the prior 12-month period and, like the percentage for the quarter, the lowest level in our records.

This is not gloom and doom news for the real estate market.  It may just be indicative of a change in lifestyle today versus the past with a smaller percentage of the population being married to the idea of homeownership and more receptive to being a tenant.  As the second table below illustrates the total of occupied housing units in the midwest region of the US has only grown from about 25,500 units 10 years ago to 26,500 units now, an  increase of just 3.9%.  However, during that period, the total number of rental units increased 21% while the total number of owner occupied units declined 2% clearly marking a shift from home ownership to rental but a segment of the population.

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Should You Investigate Your Home Buyer Or Seller Online?

Today, with the help of the internet, you can get information on just about anyone and usually rather easily.  From information websites, to blogs, to classified ad sites and social media, there is a plethora of information about people available with much of it (thanks to social media) coming right from the source…the people themselves.  With all this information so readily available,  it has become common for home buyers, sellers and/or their real estate agents to use the internet to try to get a leg up on the other side in a real estate transaction.  However, this has led to some issues and concerns as to whether this should be done or not.

How a home buyer can benefit from internet snooping…

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Why Pricing Your Home Accurately From The Start Is A Must For Sellers

Even in a hot real estate market like we have today, it is still important for sellers to price their homes accurately from the start.  If you are a homeowner thinking about selling, it is easy to fall into the trap of thinking you can get away with over pricing your home as buyers are desperate, but that is just not so.  Don’t get me wrong, you should be able to sell your home for every dollar that it is worth, and perhaps even a tad more, but only if your home is priced and marketed accurately from the start.  This is why it is critical that your listing agent have access to all the latest market data as well as a complete understanding of how to use the market data to determine the price that will yield you the highest return without overpricing it and missing the opportunity to maximize your return.

What doesn’t work…

  • “I’m going to hold out to get my price….I’m in no hurry”
  • “I want to leave some “wiggle” room in my price or room to negotiate”
  • “Let’s try this price for a while, I can always reduce my price later”

Proof the above doesn’t work…

It’s simple…when you are a seller, time is not your friend, period.  Before I go further, I should point out that, like nearly everything in life, there are exceptions and unique markets that are different, but I’m addressing the main-stream market in St Louis, the $100,000 – $300,000 price range in the 5-county core St Louis market.  To illustrate my point that, as a seller, time is not your friend, I created the tables below showing sales data for homes sold during the past 12 months for different blocks of time it took the home to sell.  I did from 0 to 30 days, from 30 to 60 days, 60 to 90, 90 to 120 and 120 to 180 days.  What the data reveals is that, clearly, seller’s that price their homes accurately and, therefore, sell their homes quicker and realize more of their original ask price than seller’s that spend more time on the market.  Below is a quick recap of the percentage of original list price sellers sold for based upon how long it took to sell:

  • 0-30 days- 100%
  • 30-60 days- 95.11%
  • 60-90 days- 93.58%
  • 90-120 days- 92.96%
  • 120-180 days- 92.50%

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Does Commission Rate Paid To A Buyers Agent Affect Sale Price Or Time To Sell?

If you want to start a debate amount the real estate community that will go on forever and most likely not have the participants reach a consensus, just bring up the topic of my headline:  Does the commission rate offered to a buyers agent affect how much a listing will sell for or how quickly it will sell?  Without getting into any philosophical or ideaoligcal debate on the topic, I wanted to just look at the data to reveal what it shows on the topic.

With this in mind, I pulled MLS data from our database for homes sold in the past 12 months in the counties of St Louis and St Charles, in the price range of $200,000.  I then pulled the data into 3 groups based upon the percentage of commission offered to buyers agents.This data was pulled into the three tables below which reveal, among other things, the median time for homes to sell and the percentage of the original list price they sold for.

What does the data show?  The tables below go into more detail, but here’s a quick recap:

  • 77% paid commission of 2.7%-2.99% to the buyers agent.
    • These homes sold for a median of 97.01% of the original list price and sold in a median time of 25 days
  • 17% paid commission of 2.5%-2.69% to the buyers agent.
    • These homes sold for a median of 96.23% of the original list price and sold in a median time of 39 days
  • 5.5% paid commission of 3% or more to the buyers agent.
    • These homes sold for a median of 94.92% of the original list price and sold in a median time of 38 days

So what is the answer?  Interestingly enough, there isn’t a clear cut answer from the data below as to whether paying less than the most common commission rate to a buyers agent of 2.7% negatively impacts the seller as the stats are very close.  However, what is fairly clear is that paying a higher commission rate of 3% or more to the buyers agent certainly doesn’t result in the home selling for a higher percentage of the list price, in fact the data reveals they sold for less, nor do they sell faster as they sold over 50% slower than the listings with a 2.7% commission rate.

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St Charles County Home and Condo Prices Have Outperformed St Louis County Over Past 10 Years

The median price per square foot of homes sold in St Louis County have increased 3.5% over the past 10 years, from $116 per foot in 2007 to $120 per foot currently.  As the chart below illustrates, home prices dipped to a low of $90 per foot in 2011, a result of the housing bubble burst in 2008.  During the same period, the price per foot of homes sold in St Charles County increased 5.1% from $117 per foot in 2007 to $123 per foot currently.  Like St Louis County, St Charles County saw home prices bottom out in 2011, hitting a low of $95 per foot.

Condo prices have followed suit with St Charles County faring better than St Louis County during the past 10 years.  The median price per square foot of condominiums sold in St Louis County declined 15% over the past 10 years from $123 per foot in 2007 to $105 per foot currently.  St Charles County condo prices declined 7.9% during the same period, falling from $114 per foot in 2007 to $105 per foot currently.  The bottom for condo prices, in both St Charles County and St Louis County, lagged slightly behind the bottom for home prices, not hitting bottom until 2012 at which time prices were $85 and $89 per foot respectively.

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What is a basement worth in St Louis?

In many parts of the country it is typical for homes not to have a basement but here in St Louis, we love our basements and it is typically harder to sell a home without one.  St Louisan’s like the safety offered by a basement in times of bad storms and during the threat of tornadoes, but also like the opportunity to add some additional, and fairly affordable, living space to their homes.

With this in mind, I decided to look at the value of a basement and just how much affect having one, or not, or having a finished one, has on the price of a home in St Louis and, here are my findings:

  • For Homes Sold In St Louis County during the past 12 months, as the tables below shows:
    • Homes with Full Finished Basements sold for a median price of $131.59 per foot
    • Homes with Full Unfinished Basements sold for a median price of $119.83 per foot
    • Homes Without a Basement sold for a median price of $84.22 per foot

So, to answer the question, what is a basement worth?  While there are many other factors that affect price too, such as location of the home, size of the home, etc, and one could argue, for example, that homes without a basement are more likely to be in a lower priced area, we can still get an idea of the impact of a basement, or lack thereof, from the data,  Based upon our data, it appears homes with a basement sell for 42% more per foot than a home without a basement, and a home with a finished basement sells for 10% more per foot than a home with an unfinished basement.

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