In yet another pivotal moment for the real estate industry, oral arguments were made yesterday before a three-judge panel at the United States Court of Appeals for the District of Columbia Circuit in the ongoing battle between the National Association of REALTORS (NAR) and the Department of Justice (DOJ). The panel, consisting of Circuit Judges Henderson, Walker, and Pan, will now deliberate and make a ruling in the future, a decision that could significantly impact the industry.
The case centers on NAR’s attempt to prevent the DOJ from reopening an investigation into the organization’s commission-sharing policies. The dispute revolves around a 2020 closure agreement, which NAR interprets as barring any future investigations. However, this interpretation faced scrutiny from the judges, particularly Judge Florence Pan, who questioned the permanence of the agreement.
Representing the DOJ, Frederick Liu argued that there was never an intention to indefinitely halt the investigation. He emphasized that during the negotiation process, the DOJ’s antitrust division did not make explicit commitments to end the probe permanently.
This legal showdown is crucial for NAR, an association with more than 1.5 million members. Just last month, NAR, along with other defendants, lost a nearly $1.8 Billion anti-trust lawsuit here in Missouri (Sitzer v NAR) and NAR is currently facing multiple other antitrust lawsuits, including a substantial class-action suit in Illinois, potentially leading to damages of $40 billion.
NAR’s attorney, Christopher Michel, stressed the significance of the closure agreement, arguing that reopening the investigation would render it meaningless. Judge Justin Walker, however, highlighted the inherent risk NAR took in depending on the continuity of the DOJ’s personnel after the election.
The decision by this appellate court will be closely watched, as it could herald significant changes in how real estate transactions are conducted, affecting agents, buyers, and sellers alike. Stay updated with St Louis Real Estate News for the latest on this critical legal development.
The real estate industry is potentially on the cusp of a significant shift, one that could redefine the relationship between homebuyers, sellers, and their agents. Several class-action lawsuits, including the Sitzer v. NAR case decided in favor of the plaintiffs last month, have brought considerable attention to how real estate agents representing buyers are compensated. Consequently, many in the industry, myself included, anticipate that changes prompted by either court order or regulation could significantly impact everyone involved in the home buying and selling process
For Buyers: Empowerment through Transparency
Historically, buyer’s agents have been compensated by the seller, creating a perception of “free service” for the buyer. This arrangement often obscured the true cost of services provided by buyer’s agents. The anticipated changes would likely result in a direct payment model, where buyers would pay their agents directly.
What does this mean for you as a buyer? Firstly, it brings transparency. You will have a clearer understanding of what you’re paying for and why. It’s an opportunity to engage more deeply with your agent, understanding their role and the value they bring to your home-buying journey. This shift encourages informed decision-making and could lead to more personalized, high-quality services, as agents strive to demonstrate their worth.
For Sellers: A More Level Playing Field
Sellers, you’re not left out of this equation. The change could level the playing field, making the process fairer. You might find that the costs of selling your home become more predictable, and the overall market dynamics more balanced. However, sellers may experience a bit of ‘sticker shock’ initially. When selling, and basing the value of their home on recent sales, they will need to remember that those prior sale prices included the cost of the buyer’s agent. If now the buyer has to incur this cost, it will effectively add to the buyer’s overall expenses and, consequently, lower the perceived value of the home compared to listings where the seller paid the commission. In other words, sellers, you can’t have your cake and eat it too.
For Agents: A Call to Elevate Services
To the real estate professionals reading this: the proposed changes are a call to action. This is an opportunity to showcase the value and expertise you bring to the table. By focusing on quality service, specialization, and client satisfaction, you can navigate these changes successfully. Remember, a more informed consumer is an opportunity to build deeper, trust-based relationships.
A Forward-Looking Industry
Change is often accompanied by uncertainty, but it also brings growth and progress. As we navigate this evolving landscape, our focus remains on empowering you with information and insights. Whether you’re buying, selling, or simply exploring the market, remember: the value of a skilled real estate professional is undisputed. The right agent is your ally, advocate, and expert. If you are looking for such an agent, a good place to start is my firm, MORE, REALTORS® as those are the only kind of agents we surround ourselves with (shameless plug).
In the ever-shifting sands of the real estate market, timing can be the key to unlocking exceptional value. A recent comprehensive study by ATTOM Data Services, which analyzed over 47 million home sales, uncovers a surprising twist specific to the Missouri housing market. While the national trend leans towards October for optimal home buying, Missouri charts a different course, offering a unique window of opportunity for prospective buyers.
Discovering Missouri’s Seasonal Advantage
This extensive study paints a vivid picture of real estate trends, providing invaluable insights for both buyers and sellers. For Missouri, the findings point to December as a golden month for home purchasing, differing from the national trend. This divergence presents a strategic opportunity for buyers in the state to potentially secure better deals.
What This Means for St. Louis Home Buyers and Sellers
In the St. Louis real estate market, the latest data presents a compelling narrative for immediate buyer action. With December’s arrival, historically marked as the most advantageous month for home purchases in Missouri, buyers are positioned to capitalize on potentially lower prices. This trend aligns closely with the findings from my recent analysis on interest rates dropping to their lowest in over two months. Together, these factors create a prime environment for buyers in the current market. For sellers, this period warrants a strategic review to align with the unique opportunities that December offers.
As of yesterday, the mortgage landscape has seen a notable shift, with the interest rate for a 30-year fixed-rate conventional mortgage dropping to 7.13%, marking the lowest point since September 1, 2023, when it was 7.08%. This recent decrease offers a glimmer of hope in the housing market, especially considering the turbulent fluctuations witnessed over the past months.
Equally promising is the rate for 30-year fixed-rate FHA loans, which as of yesterday stood at 6.5%, again the lowest since September 1, 2023, when it recorded a rate of 6.45%. These latest figures suggest a trend that could lead to revitalizing buyer interest and market activity, a welcome change from the higher rates experienced in the recent past.
This positive turn in mortgage rates is particularly significant for markets like St. Louis, where the real estate dynamics are closely tied to these financial trends. For buyers, the dip in rates presents a more favorable scenario, potentially making home ownership more accessible than it has been in recent times. Sellers, too, might find reasons to be optimistic, as lower rates could translate to increased market interest and activity.
The chart below illustrates the history of mortgage interest rates, offering a clearer perspective on the recent changes and their implications.
Mortgage Interest Rates (interactive chart)
(click on chart for live, interactive chart)
The real estate market has always been sensitive to interest rate changes, and the current shift could be the beginning of a more encouraging phase. Whether this trend will continue remains to be seen, but for now, it offers a much-needed respite and a reason for cautious optimism in the housing market.
Why This Webinar Is Critical for Your Career The Sitzer v. NAR verdict marks a significant turning point in our industry. This webinar is crafted to help you understand and leverage these changes for your professional growth. Expect to gain:
Comprehensive Insights on the Sitzer v. NAR Verdict: Delve into the verdict’s details and its broader legal implications.
Industry Impact Evaluation: Discover how these shifts will influence your business and the real estate market at large.
Strategies for Navigating Change: Learn effective ways to adapt and thrive in the evolving real estate environment.
Exploration of Innovative Tools: Uncover cutting-edge resources to enhance your business operations and market analysis.
Panel of Experienced Voices As your host, Dennis Norman, with 45 years in the St. Louis real estate scene, I aim to share insights that blend practical experience with strategic foresight. Joining me are my business partners, John Williams and John Donati, both seasoned professionals with deep insights into these recent developments. Our collective experience in leadership within the REALTOR® organization and MLS will provide you with a rich perspective on adapting to industry changes.
Growth and Networking Opportunities This webinar is more than a learning experience—it’s a platform for professional growth and networking with peers dedicated to excellence and adaptation in real estate. It’s an avenue for you to connect with trends, tools, and strategies that will define the future of our industry.
Reserve Your Spot Now Ensure your participation in this pivotal discussion by securing your place at the webinar. Visit MORETrainingCenter.comor scan the QR code below to register. Let’s embark on this journey of growth and adaptation together in the St. Louis real estate market.
The St. Louis METRO EAST Real Estate Market Report for October 2023, presented below, displays data for St Clair County in Illinois and by clicking on the infographic you will reveal the market report for every county in Illinois that is part of the St Louis metro area. This infographic is a unique offering from MORE, REALTORS, which is renowned for its expertise in St. Louis real estate market intelligence. Additionally, our brokerage prides itself on having a team of the most experienced and knowledgeable agents who are deeply committed to serving our clients throughout the St. Louis metro area
St Louis METRO EAST Real Estate Report for October 2023
(click on infographic for complete report for all Illinois counties that are part of the St Louis metro area)
The St. Louis Real Estate Market Report for October 2023, presented below, merges data from both the City and County of St. Louis. This infographic is a unique offering from MORE, REALTORS, which is renowned for its expertise in St. Louis real estate market intelligence. Additionally, our brokerage prides itself on having a team of the most experienced and knowledgeable agents who are deeply committed to serving our clients throughout the St. Louis metro area
We invite you to dive deeper into our comprehensive demographic, which also sheds light on the St Charles, Jefferson and Franklin County markets as well by tapping on the image below.
St Louis Real Estate Report for October 2023
(click on infographic for complete report including other counties)
The 30-year fixed mortgage interest rate has experienced a significant drop, reaching 7.4% – the lowest since September 20th, nearly two months ago. This shift provides a much-needed reprieve in the housing market, particularly following the rate’s surge to 8.03% on October 19th, a peak unseen since August 7, 2000, 23 years ago.
The October high had introduced uncertainty and slowed down the real estate market, impacting buyer affordability and seller activity. The recent decline to 7.4%, though still high historically, is a positive sign, potentially reinvigorating interest and activity in the housing market.
This change in rates is key for real estate professionals and buyers in areas like St. Louis. It presents an opportunity for buyers to reconsider their purchasing plans and for sellers to anticipate increased market interest. The future trajectory of interest rates remains a point of keen observation for the real estate market.
The St. Louis MSA recorded 311 foreclosure actions in October 2023. This represents a significant decrease of 12% from September 2023 and a substantial decline of 71% compared to October 2022. This suggests a strong recovery or stabilization in the real estate market in the St. Louis area, indicating fewer homeowners are facing foreclosure compared to the previous year.
Month over Month and Year Over Year Change in Foreclosure Activity in the St Louis MSA (By County)
In the world of real estate, down payments have emerged as a significant financial factor for homebuyers across the United States, and St. Louis is no exception. A recent report from LendingTree sheds light on the dynamics of down payments, and it’s essential for prospective buyers and sellers in St. Louis to understand how the local market fares in this regard.
St. Louis Down Payment Statistics:
St. Louis ranks 42nd out of the nation’s 50 largest metropolitan areas in terms of average down payments. This ranking places it 9th in terms of the lowest down payment amount in the 50 largest metros.
The average down payment in St. Louis comes in at $56,251. While this figure may not reach the heights seen in some of the more expensive coastal cities, it’s still a substantial amount.
Down Payment as a Percentage of Income:
One critical metric to assess affordability is the down payment as a percentage of the average annual household income. In St. Louis, the average down payment represents approximately 54.87% of the area’s average annual household income.
Challenges and Opportunities:
For many homebuyers in St. Louis, coming up with a down payment that accounts for over half of their annual household income can present challenges. It may require careful financial planning and discipline to accumulate the necessary funds.
On the positive side, St. Louis fares better than several major metros where down payments exceed 100% of the average household income.
Tips for St. Louis Homebuyers:
Prospective buyers in St. Louis should explore various options for coming up with a down payment, such as saving over time or investigating loan programs that require lower upfront cash.
Additionally, buyers should stay informed about down payment assistance programs available in the St. Louis area that can help make homeownership more accessible.
In summary, while St. Louis may not have the highest average down payments in the nation, it’s essential for local homebuyers to be aware of the financial aspects of purchasing a home. Understanding how down payments align with income and local market conditions is key to making informed decisions in the St. Louis real estate market. Stay tuned to StLouisRealEstateNews.com for more insights into the St. Louis real estate landscape.
In the ever-evolving landscape of real estate transactions, the threat of fraud has become increasingly sophisticated and pervasive. Recent alerts from Westcor and other title insurance underwriters highlight a worrying trend in real estate fraud, impacting not just foreign-owned unimproved lots but also residential and commercial properties across the board. As a leading voice in the St. Louis real estate market, it’s crucial to address these concerns and reinforce the importance of vigilance among our agents and clients.
The Escalating Threat of Real Estate Fraud
Seller Impersonation: No longer confined to foreign-owned, unimproved land, fraudsters are now targeting all types of properties, including those with owner-occupied homes and commercial entities. This form of deception involves impersonating the property owner to illegally sell the property.
Earnest Money Fraud: A newer tactic involves the fraudster acting as both the buyer and seller, using counterfeit checks for earnest money deposits. These checks, often drawn from foreign banks, are for amounts higher than typical in a purchase agreement. The scam unfolds as the fraudster cancels the deal before the check clears, demanding a wire transfer refund of the deposit.
Fraudulent Contract Assignments: In some cases, a fraudulent buyer assigns their contract to an unsuspecting third party. This complex scam involves posting online listings for properties that aren’t actually for sale, leading to conflicting demands on escrow deposits and creating a dilemma for title agents.
Red Flags and Preventative Measures
To safeguard against these scams, it’s essential to recognize potential red flags:
Unusual Communication Patterns: Be wary of sellers who avoid in-person meetings or insist on communicating only via phone, text, or email.
Inconsistencies in Identity: Pay attention to discrepancies like accents not matching the owner’s name, inability to answer property-specific questions, or documents signed or notarized in unexpected locations.
Urgency and Aggression: A seller in a hurry or who becomes belligerent when asked for verification is a potential red flag.
Suspicious Financial Requests: Be cautious of sellers requesting fund transfers to foreign bank accounts or presenting foreign checks, especially for amounts exceeding typical earnest money.
Best Practices for Real Estate Professionals
Verification: Always verify the identity of all parties involved in a transaction. Utilize state websites for license authenticity checks and refer to resources like the European Union’s PRADO website for passport verifications.
Payment Methods: Avoid accepting foreign checks. Instead, insist on wired funds for transactions.
Legal Consultation: In cases of uncertainty, seek advice from a licensed real estate attorney, especially regarding escrow arrangements.
Reporting: If you encounter fraudulent activities, report them immediately to the relevant authorities, including providing copies of fraudulent identification and documents.
Staying Informed and Prepared
For more detailed information on these scams, visit the Federal Trade Commission’s guide on fake check scams and the Financial Crimes Enforcement Network’s resources on title and escrow fraud.
Conclusion
The real estate industry in St. Louis, like many others, is not immune to the threat of fraud. It’s imperative that we, as professionals, remain vigilant, informed, and proactive in our efforts to protect our clients and ourselves from these deceptive practices. By staying aware and adhering to best practices, we can continue to uphold the integrity and security of real estate transactions in our region.
This article aims to educate and alert the St. Louis real estate community about the increasing sophistication of fraud in the industry, emphasizing the importance of vigilance and adherence to best practices to safeguard against these threats.
For the 12-month period ended October 31, 2023, there were 3,097 condominiums sold in the St Louis 5-county core market which, as the Condo 12-Month Sales and Price Trend Chart below (available exclusively from MORE, REALTORS®) shows, is the lowest total for 12-month sales since August 2014. The St Louis Condominium sales trend is faring slightly better than single-family homes sales are because, as I reported earlier this week, St Louis home sales have fallen to the lowest level since early 2013.
St Louis Condo prices increasing a slower pace….
As the chart at the bottom illustrates, the median price per foot for Condominiums sold in the St Louis area increased this year 8.1% from last year which, while it is a higher percentage increase than seen during the same period for homes, is a lower rate of price appreciation than the 11.0% seen in 2022 and 9.0% in 2021.
St Louis Condo 12-Month Sales Trend and Price Trend
For the 12-month period ended October 31, 2023, there were 22,555 homes sold in the St Louis 5-county core market which, as the STL Market Report below (available exclusively from MORE, REALTORS®) shows, is a 17.38% decline in home sales from the the prior 12-month period when there were 27,200 homes sold. The median price of homes sold during the most recent 12-month period was $275,000, an increase of 3.777% from the prior 12-month period.
St Louis home sales trend continues to fall….
Below the market report is a STL Market Chart showing (also available exclusively from MORE, REALTORS®) the 12-month home sales and home price trend for the St Louis 5-County core market since 1999. The green line on the chart depicts the 12-month sales trend for each month for the past 10-years revealing a decline in the St Louis home sales trend for the past 12-months. The 12-month home sales trend in St Louis is now at the lowest levelsince April 2013.
St Louis home price trend falling as well….
The red line on our chart tracks the median price per square foot for St. Louis homes sold over each 12-month period ending in the month indicated. It’s a given that home prices ebb and flow annually, peaking typically in the early summer months before tapering off during the winter. This year, the peak median price per square foot hit $194 in July, marking a modest 2.6% climb from the peak of the previous year. To put this in perspective, the previous year’s peak was a more robust 9.9% above the peak price of 2022.
STL Market Report – St Louis 5-County Core Market
(click on report for live, complete report)
St Louis 5-County Core Market – 12-Month Home Sales & Price Trend – Since 1999
The St. Louis Real Estate Market Report for September 2023, presented below, merges data from both the City and County of St. Louis. This infographic is a unique offering from MORE, REALTORS, which is renowned for its expertise in St. Louis real estate market intelligence. Additionally, our brokerage prides itself on having a team of the most experienced and knowledgeable agents who are deeply committed to serving our clients throughout the St. Louis metro area
We invite you to dive deeper into our comprehensive demographic, which also sheds light on the St Charles, Jefferson and Franklin County markets as well by tapping on the image below.
St Louis Real Estate Report for September 2023
(click on infographic for complete report including other counties)
In the ever-evolving landscape of the housing market, prospective homeowners and investors alike keep a close eye on mortgage interest rates. Today, there was a modest decrease in the 30-year fixed-rate mortgage interest rate, now hovering between 7.5% and 7.6%. This shift comes in the wake of the Federal Reserve’s recent decision to maintain the Overnight Federal Funds Rate at a range of 5.25% to 5.50%.
This current rate represents a slight relief from the recent peak in , yet it remains a figure that echoes the rates of over two decades ago. To put this into perspective, the last time mortgage interest rates soared to such heights was in late 2000, a reality that today’s borrowers may find daunting.
The first chart below illustrates the trajectory of mortgage rates over the last several years while the chart below it is a long-term look at rates going all the back t0 1971.
Despite the Federal Reserve’s pause in rate hikes, as noted in their latest meeting, the market has responded with a cautious optimism that is reflected in today’s slight rate reduction. Federal Reserve Chairman Jerome Powell has been clear that this holding pattern does not signal an end to the tightening cycle, but rather a strategic pause, with the central bank retaining the option to adjust rates if inflation trends shift.
For homebuyers, this dip presents a nuanced opportunity. While rates are not at the historic lows seen in recent years, any decrease can translate to significant savings over the life of a mortgage. It’s a reminder that in the world of real estate financing, timing, and vigilance are everything.
As we continue to navigate through these turbulent economic waters, stay tuned for updates on interest rate trends and their implications for the real estate market. Whether you’re looking to buy, sell, or simply stay informed, understanding the dynamics of mortgage rates is key to making empowered decisions.
Mortgage Interest Rates (MND Chart)
(click on chart for live, interactive chart)
Mortgage Interest Rates – 1971-Present – 30 Year Fixed-Rate
There were 3,905 building permits issued for new single-family homes in the St Louis area during the 12-month period ended September 30, 2023. This represents a decline of 13.20% from the prior 12-month period, during which 4,499 permits were issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw a decline in building permits from the previous period with 4 of them seeing double digit declines. Warren County, on the other hand, saw a slight increase in permit activity for the second month in a row.
St Louis New Home Building Permits – September 2023
(click on table below for page with live charts showing additional permit data)
In a remarkable turn of events, just minutes after the jury sided with the homeseller-plaintiffs in the landmark Sitzer | Burnett trial, attorney Michael Ketchmark wasted no time in launching another legal salvo against the real estate industry. This new class action lawsuit, filed on behalf of three new homesellers, aims to further scrutinize the practices surrounding agent commissions.
The Defendants
This new lawsuit expands the list of defendants to include: Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna, and Douglas Elliman. Notably, the National Association of Realtors is once again named as a defendant, marking its continued entanglement in legal challenges related to commission structures.
The Allegations
The plaintiffs in this new case echo the grievances aired in the Sitzer | Burnett lawsuit, claiming they have been adversely affected by a “real estate industry conspiracy” that artificially inflates agent commissions. The suit alleges that this practice has a cascading effect, ultimately driving up costs for homesellers.
Legal Venue
The lawsuit has been filed in the United States District Court for the Western District of Missouri, the same jurisdiction that recently saw the Sitzer | Burnett plaintiffs awarded $1.785 billion in damages.
What This Means for the Industry
The filing of this new lawsuit so swiftly on the heels of the Sitzer | Burnett verdict could signal a wave of legal challenges aimed at traditional real estate commission models. Industry stakeholders will undoubtedly be watching closely as this new case unfolds, given its potential to further disrupt established practices and financial structures within the real estate market.
In a groundbreaking development, the jury in the Sitzer v National Association of REALTORS®, et al, lawsuit has returned a verdict in favor of the plaintiffs. According to reports by Inman News, the jury found against all defendants and awarded a staggering $1.785 billion in damages. This decision could have far-reaching implications for the real estate industry, potentially reshaping commission structures and business practices.
The lawsuit, which has been closely followed since its filing in 2019, questioned the legality of certain real estate commission practices. The verdict is likely to send shockwaves through the industry, prompting legal reviews and potentially setting the stage for further litigation.
It remains to be seen how this verdict will impact the real estate market in the long term, but it is clear that the decision marks a significant moment in the ongoing debate over real estate commissions and transparency.
Stay tuned for more updates and in-depth analysis on what this verdict means for the future of the real estate industry.
The St. Louis housing market is undergoing some noteworthy changes, according to the latest data from MORE, REALTORS®. As of today, the supply of homes for sale in St. Louis stands at 1.43 months, a slight uptick from the 1.38-month supply reported at the end of September and the highest level in over 3 years. Additionally, the median price has settled at $260,000, and nearly half (48%) of the active listings have reduced their asking price from their original figures.
A Closer Look at Pricing Trends
Two additional reports from MORE, REALTORS® offer a nuanced view of the market’s pricing dynamics:
October 2, 2023 Report: Homes sold during the 30-day period ending on October 2nd had a median price of $285,000 or $191 per square foot.
October 27, 2023 Report: Homes sold from October 3rd through October 27th had a median price of $270,000 or $185 per square foot.
These reports indicate a slight softening in home prices, which could be attributed to various factors, including seasonality.
Seasonal Impact on the Market
As we transition from fall into winter, it’s essential to acknowledge the seasonal effects on home sales and prices. Historically, the colder months tend to see a slowdown in market activity, which could explain the recent changes in pricing and supply.
I’ve been discussing and writing about the Sitzer v National Association of REALTORS®, et al, lawsuit since it was originally filed in 2019. My previous articles on this case, as well as the Moerhl suit—a similar lawsuit filed in Illinois—can be found at the links below, which are in chronological order with the most recent first:
Today marks the end of the second week the trial has been underway, and it’s time to take stock of what has transpired so far.
Key Developments
Motions and Counter-Motions
Motion to Enforce Court Order: BHH Affiliates, LLC, HSF Affiliates, LLC, and HomeServices of America, Inc., filed a motion to enforce a court order. This motion was subsequently denied by District Judge Stephen R. Bough.
Deposition Designations: The court overruled most of the defendants’ objections regarding the deposition of Kevin Goffstein, allowing most of the deposition to be part of the trial record.
State Statutes and Regulations: A significant ruling came when the court prohibited the defendants from using state statutes and regulations as exhibits.
Legal Maneuvers
Pro Hac Vice Admission: Ian T. Hampton was allowed to appear pro hac vice to represent HomeServices of America, Inc.
Motions in Limine: Multiple motions in limine were filed by both parties, aiming to limit the evidence that can be presented during the trial.
Motions for Judgment as a Matter of Law: Both the National Association of Realtors and Keller Williams Realty, Inc., filed motions for judgment as a matter of law, which were denied by the court.
Trial Proceedings
Jury Trial: The jury trial has been ongoing, with proceedings taking place almost daily. The court has been in session for extended hours, indicating the complexity and importance of the case.
Witness Withdrawals: Plaintiffs withdrew David Liniger and Jay Papasan as witnesses to be called by videotaped deposition.
Jury Instructions: Various motions and objections were raised concerning the jury instructions, including a specific motion by Keller Williams Realty, Inc., for a Jury Instruction on Missouri State Law.
The first two weeks of the trial have been action-packed, with both sides employing various legal strategies. The court has been diligent in its rulings, aiming to ensure a fair trial. As we move into the next phase, it’s clear that the outcome of this case could have far-reaching implications for the real estate industry. Stay tuned for more updates as the trial progresses.
Seller impersonation fraud, also known as deed fraud, is a growing concern in the real estate industry. This type of fraud involves forging the property owner’s signature to illegally transfer ownership of the property. A recent case in the City of St. Louis serves as a cautionary tale for homeowners.
A Disturbing Case in St. Louis
Bernadette Brown, a member of the Royal Realty Group LLC, recently discovered that a property owned by the LLC at 1129 Penrose Street, St. Louis, MO 63107, was conveyed to Keith Brown via a Quit Claim deed. Bernadette Brown claims her name was forged on the deed, which was then notarized by a non-existent notary. This alarming incident underscores the need for homeowners to be vigilant in monitoring their property records.
How to Protect Yourself
Fortunately, there are several ways homeowners can protect themselves from becoming victims of deed fraud:
Property Fraud Alert Services
Many counties offer free services that alert property owners when deeds or other documents related to their property are filed. Property Fraud Alert is one such service, available in 23 counties in Missouri, including the City of St. Louis, St. Louis County, St Charles County, Jefferson, and Franklin. These alerts can serve as an early warning system, allowing you to take immediate action if you suspect fraudulent activity.
Title Reports
If you have concerns about your property, you can order a title report from a local title insurance company for a modest fee. M&I Title* in St. Louis, MO, is one such company that can provide this service. A title report will confirm the name under which the property is registered and identify any deeds of trust against it.
REALIST Reports
Agents from MORE, REALTORS can assist you by pulling a REALIST report from the MLS at no charge. This report will provide some basic information about your property, offering another layer of protection against fraud.
For more insights and advice on the St. Louis real estate market, stay tuned to StLouisRealEstateNews.com.
*Disclosure: I have a financial interest in M&I Title.
As if there wasn’t enough negative attention on the real estate industry, last week a study was released, “Et Tu, Agent? Commission-Based Steering in Residential Real Estate.” The study suggests that buyer agents may steer their clients away from properties offering low commissions. It argues that this is a key reason why agent commissions have remained high in the digital age, even as commissions in other industries have declined. According to the report, listings with the lowest commissions take 33% longer to sell and face a 75% greater risk of not selling at all.
So, is this true?
That’s a difficult question to answer. First, as the chart below indicates, the average commission rate offered to a buyer’s agent in the St. Louis market has remained relatively stable. For over 20 years, the annual average rate has been 2.7%, with the only exception occurring in March 2010 when it rose to 2.925%. Given that most listings offer the same commission rate, it’s challenging to determine if agents are steering away from low commissions. However, this consistency might support another allegation: that the industry has established a “normal” commission rate. It’s hard to deny some level of pressure on listing agents to offer a specific commission rate when thousands of listings end up offering the same rate. Moreover, offering a “below-normal” commission rate as a listing agent can attract criticism from peers.
The National Association of Home Builders (NAHB) recently released its NAHB/Westlake Royal Remodeling Market Index (RMI) for the third quarter of 2023. The index showed a decline, with a reading of 65, which is three points lower than the previous quarter. Despite the dip, the index remains above 50, indicating that more remodelers view the market conditions as good rather than poor. However, the decline suggests that the remodeling market is experiencing some cooling off, particularly in larger projects.
Current Conditions and Future Indicators
The Current Conditions Index, which is an average of three components including large, moderately-sized, and small remodeling projects, fell five points to an average of 72. Specifically, large remodeling projects ($50,000 or more) decreased by five points to 67, moderate projects (between $20,000 and $50,000) fell by four points to 73, and small projects (under $20,000) declined by five points to 76.
The Future Indicators Index, which measures the rate of incoming leads and inquiries as well as the backlog of remodeling projects, also showed a decline. It fell three points to 57 compared to the previous quarter. The component measuring the rate of incoming leads and inquiries dropped by three points to 56, while the backlog of remodeling jobs decreased by two points to 59.
During the 3rd quarter of this year, there were 1,200 properties with foreclosure filings in the St. Louis MSA, according to the U.S. Foreclosure Market Report by ATTOM Data. This marks a 17% increase in St. Louis foreclosures from the prior quarter and an increase of 32% in St Louis foreclosure activity from a year ago.
The table below reveals that the city of St Louis saw the most foreclosures during 3rd quarter, followed by the Illinois counties of St Clair and Madison.
For years, the average buyer’s agent commission rate in the St. Louis real estate market has remained remarkably stable. According to a chart from MORE, REALTORS®, the rate has consistently been at 2.7% for not just the past five years but for over two decades. However, recent data shows a notable shift. Starting in June 2023, the rate dropped to 2.6%, followed by a further decline to 2.575% in July and 2.5% in August, where it remained in September.
A Response to Legal Spotlight?
The timing of this decline coincides with a period of increased scrutiny on real estate commissions, largely due to recent class-action lawsuits that have been the subject of several articles I’ve written over the past several months.
While it’s too early to definitively say that the decline in commission rates is a direct response to these lawsuits, the correlation is hard to ignore. The legal challenges have certainly shed light on the industry’s practices, prompting discussions among consumers and professionals alike about the fairness and transparency of commission rates.
Average Commission Rate to Buyers Agents in St Louis
Every month, Fannie Mae surveys consumers to gauge their sentiment on whether it’s a good time to buy or sell a home. The results are published in their Home Purchase Sentiment Index® (HPSI). In the most recent HPSI report, 84% of respondents said they felt now was a bad time to buy a home. This is the highest percentage holding this view since the survey’s inception in 2012.
On the flip side, 63% of those surveyed believed now was a good time to sell a home. This is a slight dip from last month’s 66%.
As for interest rates, a mere 17% of consumers expect mortgage rates to decrease in the next 12 months
The St. Louis real estate market is a complex landscape, influenced by various factors such as location, amenities, and notably, school districts. In this article, we delve into an exclusive comparison between two St Louis school districts: Rockwood in west St Louis county and Ferguson-Florissant in north St Louis county. Utilizing the STL Market Reports provided exclusively by MORE, REALTORS®, as well as infographics depicting census data, we aim to offer a comprehensive overview of these markets for the 12-month period ending September 30, 2023.
Key Market Trends
Rockwood School District
Decline in Sales: The Rockwood School District saw a decline of 28.63% in the number of homes sold compared to the prior 12-month period.
Increase in Price: Despite the decline in sales, the median sold price increased by 3.45%.
Ferguson-Florissant School District
Decline in Sales: The Ferguson-Florissant School District experienced a decline in sales of 18.42%.
Decrease in Price: Unlike Rockwood, Ferguson-Florissant also saw a decline in the median sold price by 1.99%.
As a follow-up to my previous article on the diverging trends in luxury and non-luxury home sales in the St. Louis area, we now turn our attention to the current state of inventory in these two segments. The tables below (exclusively available from MORE, REALTORS®) reveals a surprising contrast: the supply of luxury homes (with a list price of $700,000 or above) in the St. Louis 5-County Core market stands at 2.13 months, while the inventory for non-luxury homes is only 1.40 months.
A Closer Look at Luxury Home Inventory
The 2.13-month supply of luxury homes in the St. Louis 5-County Core market suggests, while still favoring sellers, a more balanced market than the non-inventory market which, due to the very low supply, still favors sellers.
The St. Louis real estate market is experiencing a fascinating divergence in trends between luxury and non-luxury homes. According to the latest data from MORE, REALTORS®, the market for luxury homes—those priced at $750,000 and above—is on the rise, reaching its highest level in eight months. In contrast, the market for non-luxury homes, priced below $750,000, has been on a steady decline for about two years. This article delves into these trends, referencing two illuminating charts from MORE, REALTORS®.
Luxury Home Sales on the Upswing
The first chart from MORE, REALTORS® illustrates the upward trajectory of luxury home sales in the St. Louis area. As the chart shows, for the 12-month period ended September 30, 2023, there were 1,351 luxury homes sold in the combined markets of the city and counties of St Louis and St Charles County, which is the highest 12-month trend since January of this year.
There were 3,946 building permits issued for new single-family homes in the St Louis area during the 12-month period ended August 31, 2023. This represents a decline of 12.04% from the prior 12-month period, during which 4,486 permits were issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw a decline in building permits from the previous period with 4 of them seeing double digit declines. Warren County, on the other hand, saw a slight increase in permit activity.
St Louis New Home Building Permits – August 2023
(click on table below for page with live charts showing additional permit data)
Panel of Experienced Voices As your host, Dennis Norman, with 45 years in the St. Louis real estate scene, I aim to share insights that blend practical experience with strategic foresight. Joining me are my business partners, John Williams and John Donati, both seasoned professionals with deep insights into these recent developments. Our collective experience in leadership within the REALTOR® organization and MLS will provide you with a rich perspective on adapting to industry changes.
