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St. Louis Real Estate Search

 

Are St Louis Home Prices Really Increasing Or Are There Just Fewer Distressed Sales?

dennis-norman-realtorA report released today by Radarlogic suggests that the housing market is not really recovering as much as it may appear, particularly with regard to home prices.  The report says that, the 9.2 percent increase they saw in their home price index for the 12 month period ended November 30, 2012 was the result of a “significant shift in the composition of home sales and overstates the appreciation in individual properties.”  The report goes on to say if motivated sales (REO’s, foreclosures, short-sales) are removed from the data, then the “real” increase in home prices was just over half of what their index showed.

I took a look at the St Louis market to see if it was following suit or not.  What I found was, when looking at the same period as the Radarlogic report, the median home price in the five county “core” St Louis market went from $122,000 in November 2011 to $130,000 in November 2012, an increase of 6.5 percent.  However, when I remove the distressed sales from the stats, the median home sales price in November 2011 was $160,000 and November 2012 $161,000 for an increase of just over one-half of one percent.   My research supports Radarlogic’s notion that home prices are not really rising as much as they appear but instead appear to be higher as the result of fewer distressed sales which sell at significant discounts.

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