St Louis Luxury Home Sales Trended Upward For 10 Consecutive Months

The St Louis luxury home market (homes priced at $700,000 or above) after remaining relatively flat for about a year has been steadily trending upward for now 10-months in a row.  Even though April is not over, there have already been more sales of Luxury homes closed than for the month before, so April will make the 10th month of increased sales activity.

As the STL Market Chart below shows (available exclusively from MORE, REALTORS®), sales of luxury homes in St Louis City and County and St Charles County, have increased from 694 sales for the 12-month period ended April 2018 to 1,130 for the 12-month period ending the 30th of this month (so it’s going to rise further even), an increase of 63% in the past 3 years.  For the sake of this analysis, a “luxury” home was considered to be a home selling for $700,000 or above, which puts it in the upper 5% or so of the market.

St Louis Luxury Home Sales Trend (12-month prior periods) For the Past 3 Years

(click on Chart for current chart with live data)

St Louis Luxury Home Sales Trend (12-month prior periods) For the Past 3 Years

Mortgage Interest Rates Dip Below 3 Percent Last Week For The First Time In 2 Months

Mortgage interest rates dropped below 3% this past week with an average interest rate of 2.97% on a 30-year fixed-rate mortgage according to the Freddie Mac Primary Mortgage Market Survey.  As the chart below shows, mortgage interest rates have not been below 3% since February 25, 2021 when they also averaged 2.97%.  Rates are still up from the record low rate of 2.65% in January, but as you can see on the chart, are still at a rate that is historically low!

Now is the time to buy or perhaps refinance your existing mortgage.

Anyone that has been thinking of buying a home should, if able, shift into high geat and find one now to take advantage of the low rates and the increased buying power that comes with it.  The first step would be to get yourself pre-approved and, for that, I would recommend Michael McCarthy with Flat Branch Home Loans…he’s great and our firm does a lot of business with him.  You can find his info at STLBestLender.com.  If you a homeowner with a mortgage and no plans to move, I would also suggest you get in touch with Mike to see how much money you can save by refinancing your existing mortgage at a lower rate.

Mortgage Interest Rates – 30 Year Fixed-Rate

(click on chart for live, interactive chart)

Mortgage Interest Rates - 30 Year Fixed-Rate

 

Wonder Why More New Homes Are Not Being Built?

With the inventory of homes for sale remaining at historically low levels for the last couple of years home buyers may be wondering why there aren’t more new homes being built?  Actually, in St Louis, new home construction has been increasing at a pretty good rate but it appears more homes can be absorbed by the market than are being built.

The answer to why more homes are not being built is probably the result of many things such as a lack of available ground in areas that are in demand, a shortage of contractors and tradesmen, the complication of, and cost related to regulatory compliance and the ever increasing cost of building materials.  The cost of many building materials has increased significantly but lumber prices, which is a major component of a new home in many ways, have just shot into the stratosphere.  As the chart below shows, the Producer Price Index for lumber and wood products shot up to 441 in March, an increase of 84% from a year ago.

According the National Association of Home Builders (NAHB) the price increases in lumber have caused the price of an average home to increase by $24,000 since April 2020 just to cover this increased cost.

  

Producer Price Index by Commodity: Lumber and Wood Products: Softwood Lumber

(click on chart for live chart and more data)

Producer Price Index by Commodity: Lumber and Wood Products: Softwood Lumber

St Louis is ranked 6th most competitive housing market in the U.S.

LendingTree just released a list of the 50 large metro areas with the most competitive housing markets in the U.S. on which St Louis was ranked as the 6th most competitive market.  This list was based upon LendingTree’s assessment of the quality  of the buyer’s in each market, based upon their strength as a buyer from a financing standpoint.

So, while not an analysis of which cities have the most buyers showing up at a listing or where listings are receiving the highest number of offers, it’s about the quality of the home buyer’s from a competitive standpoint.  This makes sense, as today the hard part isn’t necessarily finding a buyer for a new listing, it’s about the listing agent analyzing the offers and helping the seller determine not only which may have the best terms, but which buyer has the best ability to perform.  After all, having a great offer doesn’t really mean anything if the deal doesn’t close.

Most Competitive Housing Markets

(click on table for complete list)

Most Competitive Housing Markets

In analyzing the quality of the buyer’s and assessing the competitiveness of each market, LendingTree took into consideration the following for each metro area:

  • The share of home buyers shopping for a mortgage even before they found the house they wanted.  This is indicative of a good buyer that wants to be prepared to react quick and understands the importance of being pre-approved to be make their offer more attractive to the seller.
  • The average down payment percentage.  A buyer with a larger downpayment is going to look like a stronger buyer to a seller.
  • Percentage of buyers have have good credit (above a 680 credit score).   Better credit means more financing options and lower cost financing which can enable the buyer to pay more than someone with lower credit and have the same monthly cost in terms of payment.  A better credit score also means there is a better chance of the deal closing.

A good buyer’s agent will know everything above and help their client through the process to make them have the best chance possible of getting their offer accepted.  Likewise, a good listing agent will know how to scrutinize buyer’s and help their seller client pick the one that not only has offered an acceptable price and terms but has the highest likelihood of closing.  For a recommendation of a great St Louis buyer’s agent or listing agent, contact me.

 

New Home Building Permits Still On The Rise

There were 4,956 building permits issued for new single-family homes in the St Louis area during the 12-month period ended February 28, 2021 an increase of 11.0% from the same period a year ago when there were 4,465 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA).  For the forth month in a row, All seven counties covered in the report saw an increase in building permits from the same period a year ago and with double-digit increases for four counties. Lincoln County saw the largest increase at 63.64% followed by St Louis County at 14.64%.


  

St Louis New Home Building Permits – February 2021

St Louis New Home Building Permits - February 2021

 

New Contracts For Home Sales Over 50 Percent Higher Than For Same Period Last Year

The inventory of homes for sale may be low, but that doesn’t appear to be slowing down the pace of home sales.  As the STL Real Estate Trends Report below shows (which is exclusively available from MORE, REALTORS®) during the most recent week that data is available for, there were 1,151 new contracts written on listings in the St Louis MSA, an increase of 54% from the same period a year ago when there were 746 contracts written.

New listings are up as well during the same period.  Again, referring to STL Real Estate Trends Report from MORE, REALTORS® this time for listings, we see that there were 908 new listings during the most recently reported week, an increase of 26% from the same period last year.

For the week ended April 3rd, new sales out paced new listings by 26% so it doesn’t appear we are going to see any change in the low supply of homes for sale anytime soon.

Local Home Trends Report- New Contracts

(click on report for live, current report)Local Home Trends Report- New Contracts

Local Home Trends Report- New Listings

(click on report for live, current report)Local Home Trends Report- New Listings

Sell Your Home For The Highest Price In The Least Amount of Time!  See how- STLSellersAdvantage.com 
Save Commission On Your Home Sale Without Sacrificing Service! See how- FairCommissionRates.com

CFPB Proposes Banning Foreclosures Through The End Of This Year

The Consumer Financial Protection Bureau (CFPB) earlier this week proposed rule changes that would help prevent “avoidable foreclosures” that will come about when the current foreclosure ban expires June 30th.  According to the CFPB, nearly 3 million homeowners are delinquent on their mortgages as a result of the COVID-19 pandemic as well as the economic issues that have come about as a result.

The CFPB’s proposed rule changes include:

  • Require a pre-foreclosure review period that would generally prohibit loan servicers from starting foreclosure until after December 31, 2021 on loans secured by a borrower’s principal residence.
  • Permit loan servicers to offer “certain streamlined loan modification options to borrowers with COVID-19-related hardships.”

The CFPB is going to accept comments on their proposed rules until May 11, 2011 and then afterward will decide how to proceed.

About the CFPB (from their website)

The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

Is The St Louis MSA Real Estate Market Better in Missouri or Illinois?

There are a total of seventeen counties that make up the St Louis MSA with 9 of them being on the Missouri side of the Mississippi River and the other 8 on the Illinois side.  For some reason, I was curious today if the portion of the St Louis MSA in one state was outperforming the other or if they were performing about the same.  I guess my expectation was probably the latter but the data showed that in fact, during the past three months, they were closed, but each state has its bragging rights depending on which data point you look at.

The tables and charts below (available exclusively from MORE, REALTORS®) show more details but below are some highlights of the comparisons between the counties in the two states:

  • Sold home prices in Missouri for December were at a median price of $226,500 in December then dipped in January, as expected but rebounded back in February to a median price of $225,000 or 99.3% of the December price.  Illinois, on the other hand, had a median price of $150,000 in December then actually increased in January but then fell to $137,750 in February, or 91.8% of the December price.
  • The number of home sales paints a different picture though.  For the Missouri counties, there were 2,819 homes sold in December and  1,849 in February, for a decrease of 34%.  In the Illinois counties, there were 744 homes sold in December and 554 in February for a 26% decrease.


New Sales Of Listings Are Outpacing New Listings

As any home buyer in the market is well aware no doubt, we have a low inventory of homes for sale in the St Louis MSA.  As the STL Market Report below shows (which is exclusivley available from MORE, REALTORS®) there is currently just a 1.2 month supply of active listings in the St Louis metro area.  It doesn’t look like the situation is improving either as MORE’s Local Home Trends Reports at the bottom show that new contracts in the past two weeks have outpaced new listings during the same period.  There were 2,105 new contracts written for the sale of a home and there were 1,976 new listings of homes for sale.  With the new sales outpacing new listings by a little over 6% it indicates we are not going to see any improvement in the inventory in the near term.

STL Market Report for the St Louis MSA

(click on report for live report)

STL Market Report for the St Louis MSA

Continue reading “New Sales Of Listings Are Outpacing New Listings

St Louis 12-Month Home Sales Sets 15-Year Record In February

For the 12-month period ended February 28, 2021, there were 29,402 homes sold in the St Louis 5-County core market.  As the 15-year chart below (available exclusively from MORE, REALTORS®) shows, this is the highest 12-month sales period in more than 15 years!  Going back to 2006, a historic banner year for real estate, we find that the 12-month period ended March 31, 2006, came in close at 28,797 homes sold, but that’s a little over 2% below our most recent 12-month period.

But, can St Louis home sales keep up this pace?

Having a record-setting period for home sales is great but, practically speaking, it’s hard to sustain a record level for long so typically sales would ease after a record period and settle into a “norm”.  Having been in this business for 40 years, I’ve seen many of these periods and the $64 question is always the same.  How long can it last?  I’m not going to even pretend I have that answer as there are too many variables including the continued impact of the pandemic on the economy and life in general, rising oil and gas prices, rising government debt, and uncertainty about the economy to name just a few.  Oh, and did I mention the lack of inventory?  It’s hard to maintain record sales levels when there are not enough products to sell.

21 Zips In 5-County Core Where Listing Inventory Is More Than Double The Median

If you are in the process of trying to find a home to purchase or have gone through the process in the last couple of years, I don’t need to tell you how low the inventory of homes for sale is.  Currently, in the St Louis 5-County core market, there is less than a one-month supply of homes for sale (0.85 months).

However, within that area, there are 21 zip codes that have a current supply of at least double that, 1.7 months or more.  As the chart below shows, the supply of homes for sale in these zip codes ranges from a high of 9 months in 63115 down to 1.71 months in 63367.  There are a total of 9 zip codes that have a supply greater than triple the median of 0.85 months  (2.55 months+).

Jefferson County Home Prices Increase in February While Sale Plummet

As the chart below shows, the median price of homes sold in Jefferson  County climbed to $200,413 in February from $192,000 the month before and sales plummeted from 220 in January to 81 in February.

In February last year, the median price of homes sold was $180,000 so the price of $200,413 last month represents an 11 percent increase.  The number of homes sold in February 2020 was 217 so with just 81 homes sold last month, there was a 63% decline in sales for the month.

Jefferson County Home Prices and Sales

(click on chart for live chart)

Jefferson County Home Prices and Sales

Franklin County Home Prices and Sales Last Month Up Double-Digits From A Year Ago

As the chart below shows, the median price of homes sold in Franklin County remained at $196,000 in February the same as the month before.  There were 82 homes sold in Franklin County in February, one more than the month before.

In February last year, the median price of homes sold was $155,000 so the price of $196,000 last month represents a 26 percent increase.  The number of homes sold in February 2020 was 59 so the number of homes sold last month was 39% higher than a year ago.

Franklin County Home Prices and Sales

(click on chart for live chart)

Franklin County Home Prices and Sales

St Charles County Median Price Of Homes Sold Spikes in February

As the chart below shows, the median price of homes sold in St Charles County jumped to $275,000 last month approaching the record-high price of $279,000 set this past August.  This is the second consecutive month the median price has increased and is contrary to the norm.  Last year home prices fell to a low of $235,000 in February.

Though home prices didn’t follow the typical pattern and fall during the winter in St Charles County, home sales did.  Home sales last month followed that pattern falling to 333 homes sold, similar to last year’s February sales of 320 homes.

St Charles County Home Prices and Sales

(click on chart for live chart)

St Charles County Home Prices and Sales

 

 

 

St Louis City and County Home Prices Rebound In February

As the chart below shows, the median price of homes sold in St Louis City and County jumped to $220,000 last month from $204,000 the month before.  While home prices increased during the month, the number of homes sold fell slightly to 1,027 homes in the two-county area, down from 1,085 the month before.

As the table below the chart shows, there have been nearly 18,000 homes sold during the past 12 months in the City and County of St Louis at a median sold price of $220,580.  The homes sold during the past 12 months sold for a median price of 100% of the original asking price and took a median time of just 20 days to sell.  Can you say Seller’s Market? :)

St Louis City and County Home Prices and Sales

(click on chart for live chart)

St Louis City and County Home Prices and Sales 

 

 

St Louis Area Home Sales Trend At Highest Level In Over 10 Years

In spite of having been in a low-inventory market for the past few years, home sales in St Louis have continued strong.  In fact, as the home sales trend chart below, exclusively available from MORE, REALTORS®, shows home sales trend for the 12-month period ending February 28th was at the highest level in over 10-years.

The chart includes the St Louis 5-County core market (the city of St Louis and the counties of St Louis, St Charles, Franklin, and Jefferson) and shows that for the 12-month period ending last month there were 28,571 homes sold (distressed home sales have been excluded).  This is slightly above the 12-month period ending the month before when there were 28,492 homes sold.

Half of the Fastest-Selling Zip Codes In The St Louis MSA are in St Louis County

As the list below shows, five of the ten zip codes in the St Louis MSA where homes that closed in the past 30 days sold the fastest are in St Louis County.  However, the fastest-sold zip code was 63052 in Jefferson County and includes the cities  Imperial, Kimmswick, Antonia, and Liguori.

Ten Fastest-Selling Zip Codes In The St Louis MSA

(click on the list for a complete and current list)Ten Fastest-Selling Zip Codes In The St Louis MSA

St Louis New Home Construction Off To A Great Start This Year

There were 4,864 building permits issued for new single-family homes in the St Louis area during the 12-month period ended January 31, 2021, an increase of 9.6% from a year ago when there were 4,438 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA).  For the second month in a row, Like last month,  all seven counties covered in the report saw an increase in building permits during the most recent 12-month period from the prior 12-month period.  Lincoln County saw the largest increase at 52.7% followed by Franklin County at 17.69%.


  

St Louis New Home Building Permits –

January 2021

St Louis New Home Building Permits -  January 2021

 

COVID-19 Pandemic Driven Serious Mortgage Delinquencies To Highest Levels Since The Great Recession

According to a report just released by the Consumer Financial Protection Bureau (CFPB), titled “Housing insecurity and the COVID-19 pandemic“, there are over 2 million homeowners that have fallen behind at least three months on their mortgage payments.  This represents a 250% increase from pre-Covid-19 levels and is now at a level we haven’t seen since the height of the Great Recession in 2010.

Homeowners with an FHA mortgage delinquency rates double rate for all loans:

As the chart below shows, homeowners with an FHA mortgage hit a serious mortgage delinquency rate of 10.8% during the 3rd quarter of 2020, with the rate for all mortgages was just under half that at 5.2%.

Serious Mortgage Delinquency Rate By Loan Type- Q1 2005 – Q3 2020

Seroious Mortgage Delinquency Rate By Loan Type- Q1 2005 - Q3 2020

Control your investments with self-directed IRA investing

Jeremy Vlasich  I have a lot of people ask me about what to invest in and how.  Not every time, but often, the self-directed IRA investments can be great options for people that are in the real estate industry.  For this post, I wanted to go over the basic concept and give some actual real-life examples.  Once you read this, if you still need help or have questions, you are more than welcome to reach out.  We are here to serve and help!

What is an IRA and what does a “self-directed” IRA mean?  This is an Individual Retirement Account.  There are two options:

  • Roth IRA – contributions are post-tax and then the growth is tax-free for life
  • Traditional IRA – contributions are pre-tax and then the growth deferred

During the 2020 year, you can contribute $6k a year and add $1k if you are over 50. There are income limits for contributions for the Roth IRA and the tax-deductible traditional.  However, you can always contribute to the traditional but the income limit determines if the IRA is tax-deductible or not.  All traditional IRA’s are tax-deferred.  The Roth IRA is the only tax-free growth IRA.

Seven Of the Ten Fastest-Selling School Districts In St Louis MSA are in Outer Ring Counties

As the list below shows, seven of the ten school districts in the St Louis MSA where homes are selling the fastest, are in outer-ring counties, with the remaining three districts being in St Louis County.  This list is based upon the average time it took homes to sell that closed in the past 30 days and Wright City R-II District came in at the top of the list with an average of 14 days for homes to sell.  St Charles County was home to the largest number of the fastest-selling school districts with 4 followed by St Louis County with 3, Warren County with 2, and 1 in Jefferson County.

Ten Fastest-Selling School Districts In The St Louis MSA

(click on the list for a complete and current list)

Ten Fastest-Selling School Districts In The St Louis MSA

St Louis Real Estate Market Update VIDEO – February 2021

The St Louis real estate market has started off 2021 strong, but is a change coming?  Closings of home sales in January were strong with more sales closing than in January of last year, but with everything going and the uncertainty of the economy will it continue?  I address both the current state of the St Louis real estate market, as well as discuss our “leading indicator” data which gives us a glimpse of where the market is headed in the St Louis Real Estate Market Update video you can access below.
Thinking of selling and want to know if your neighborhood is a seller's market? Contact us and we'll  answer that question for you.
You can now subscribe to our ITUNES Podcast Channel to receive our updated market videos via podcast automatically each week! Just click here, then click on "Subscribe Free".) St Louis Real Estate Market Update Video - St Louis Home Prices

Sell Your Home For The Highest Price In The Least Amount of Time!  See how- STLSellersAdvantage.com 
Save Commission On Your Home Sale Without Sacrificing Service! See how- FairCommissionRates.com

St Louis’s Most Expensive Home Sale In The Last Two Years

One of the many benefits to living in St Louis is it’s a very affordable place to live and much easier to be a homeowner than in most other major metro areas.  Having said that, we do have areas, such as Ladue, Huntleigh, and Clayton to name a few where we do see home prices that are out of reach for most of the folks living here.   One such example is a magnificent 10,000+ square foot Ladue manse that sold earlier this month.  At a final sales price of $6,150,000, it is the highest-priced home sale in the REALTOR® MLS in more than 2 years.

See what $6 million gets you in a St Louis home by clicking here – be sure to click on the video to see the tour of this beautiful home.


One-Story Homes in St Louis Outsell Two-Story Homes Nearly 3 to 1

I would say for pretty much most of the 40-years I’ve been in the real estate business in St Louis, one-story homes have been popular.  The trend shifted with new homes however as undeveloped ground became more scarce and demand for larger homes grew, which led to two-story homes gaining in popularity.  There are of course other styles, such as 1.5 story homes, 2.5 or 3 story homes, and multi-level homes, but one and two-story are the most plentiful.

One-story homes outsell 2-story homes by nearly 3-1:

As the tables below show, in the St Louis MSA during the past months, there have been 11,898 1-story homes sold, 2.7 times as many 2-story homes sold during the same period.  With 4,380 2-story homes sold this was nearly double the next most popular style, 1.5 story homes of which 2,370 sold.

One-story homes sold the fastest:

The popular 1-story home also sold faster than other styles, taking a median time of just 27 days to sell while 1.5 story homes took 38 days and 2-story homes 32 days.

Two-story homes that sold were the youngest:

The one-story homes that sold were a median age of 54 years, while the median age of the two-story homes was just 31 years.

St Louis MSA Home Styles Sold – Past 6 Months

(click on table for live, current data)

1 -Story HomesSt Louis MSA Home Styles Sold - Past 6 Months   (click on table for live, current data)  1 -Story Homes

1.5 -Story Homes

St Louis MSA Home Styles Sold - Past 6 Months   (click on table for live, current data)  1.5-Story Homes

2 -Story Homes

St Louis MSA Home Styles Sold - Past 6 Months   (click on table for live, current data)  2 -Story Homes

St Louis Real Estate Market Trend For February Down From Last Year

The St Louis real estate market has slowed a little in February thus far.  As the Local Market Trends reports (availably exclusively from MORE, REALTORS® ) show, new contracts written on listings as well as new listings in St Louis 5-County Core market, were down in each of the first two weeks of February both from the prior week as well as from the same period a year ago.

New contracts written (new sales):

As the reports below show, there were 590 new contracts written (new sales)  on homes during the 2nd week of February which was 13% fewer contracts than were written the same week a year ago and  7% fewer than the prior week.

New listings:

As the reports below illustrate, there were 537 new listings of homes during the 2nd week of February which was 9% fewer new listings than during the same period a year ago and 8% fewer new listings than the prior week.

Local Market Trends – New contracts written on homes

(click on report for live, current report)

Local Market Trends - New contracts written on homes  Local Market Trends - New contracts written on homes 

Local Market Trends – New listings

(click on report for live, current report)

Local Market Trends - New listings Local Market Trends - New listings

Home Foreclosure Ban Extended Through End of June – Is this a ticking time bomb?

President Joe Biden on Tuesday extended the ban on home foreclosures for federally backed mortgages until June 30, 2021.  This is the second extension of the ban which was originally set to expire January 31, 2021, but then previously extended by President Biden to March 31, 2021.

Meanwhile, as the chart below shows, serious delinquencies on home mortgages have been on the rise since nearly the beginning of the pandemic almost a year ago.  The ban on foreclosures is certainly a welcome relief to those struggling to make their house payments. However, with such a high delinquency rate one has to wonder if it is just delaying the inevitable and that this is sort of a ticking time bomb for the real estate market?  I say that because with the number of mortgage delinquencies piling up it is safe to assume that once the ban is over there will be a massive amount of foreclosures hitting the market which may very well have a negative impact on the market.

Mortgage Delinquency Rates
Mortgage Delinquency Rates 

St Louis County Home Sales Trend Outpacing New Listings By Larger Margin Then Neighboring Counties

It’s no secret that listings of homes for sale in St Louis are in short supply and for a while now new sales have outpaced new listings making it a challenge for home buyers.  However, over the past couple of months, new sales of homes in St Louis County have outpaced new listings by a greater margin than neighboring counties.  As can be compiled from the tables below, new sales of homes in the St Louis 5-County Core market during the last four months outpaced new listings during the same period by 12.7%.  For St Louis county, there were 6,095 new contracts written during the last 4 months and 5,353  new listings resulting in new contracts outpacing new listings by 13.9%, a rate 1.2% higher than the rate for the 5-county area as a whole.   Franklin County had the next highest rate at 10.7%, then Jefferson County at 9.4%, St Charles County at 5.8%, and then the city of St Louis was the only county where new contracts were about equal to new listings.

Transparency in the home buying process including buyer’s agent commissions

Buyers Agent Commission TransparencyIn December I wrote about multiple class-action lawsuits filed against the National Association of REALTORS® (NAR), as well as some of the largest real estate brokerages, like ReMax and Keller Williams as well as a Department of Justice (DOJ) complaint filed again NAR over issues related to the lack of transparency in the home buying process.

The aforementioned complaints claim, among other things, that there has been an effort by the defendants to force buyers to pay an “inflated” price for a home as a result of the buyer not realizing the seller was forced to offer a commission to a buyer’s agent in order to get their listing in the MLS.  In addition, they claim that NAR and its members misrepresented to buyers that a buyer’s agent’s representation and services were “free”, when in fact their agent was being paid a commission,  which came from the seller and as a result, they claim this expense inflated the cost the buyer was forced to pay for the home.

I’m not here to address the accuracy of the claims made in these complaints nor get into an analysis of the legal merits of the case, but instead just want to address the changes I see that have already taken place or will take place in the home-buying process.  NAR has already reached a settlement with the DOJ in which they (NAR) agreed to make several changes, so those are pretty easy to predict and I think I have a reasonable idea of some other changes that will come along in the comings months as well.

So, what are these changes I see coming to the home-buying process in terms of transparency?

Below are some of the changes I already see or expect to see:

  • Buyer’s agents aren’t FREE, nor should they be.  NAR has already agreed to prohibit their members from claiming their services are free as they are not.  A good buyer’s agent is invaluable to a home buyer and not only will earn the commission they make but in many cases,  will “pay for themselves”.   What I mean by this is their guidance and advice to their clients, which comes from their knowledge of the market and process, as well as experience, will help their clients avoid pitfalls and to make informed, good decisions.
  • Commission transparency.  Prior to the lawsuits, many MLS’s around the country, including the one that serves the St Louis area, prohibited the amount of commission being offered to a buyer’s agent by the seller from being shown on broker’s real estate search websites.  MARIS, the company that provides the MLS for St Louis area REALTORS® was quick and pro-active in this area and began allowing brokers to display buyer’s agent’s commission on their websites.  I’m happy to say that my company, MORE, REALTORS® was, I believe, one of the first brokerages in the area to begin displaying this information.  On STLMLS.com consumers can find the amount of commission being offered to buyer’s agents on listings.  In the interest of full disclosure, I should mention I’m on the board of directors for MARIS and I’m an officer and shareholder of MORE, REALTORS.
  • Sellers won’t have to offer to pay a buyer’s agent to get in the MLS.  While the first two bullet-points above are things that have happened, now I’m predicting what will happen.  I believe that soon, perhaps as soon as “months” or as long as a year or two, the MLS requirement that a seller offers compensation to a buyer’s agent to have their listing be in the MLS will be dropped.  This is nothing that should cause panic as buyer’s agents won’t go away nor work for free, it’s just the structure of the transaction will change.  The changes made will no doubt provide a much greater level of transparency to the buyer though as I believe they will have a clear picture of the process including how their buyer’s agent is getting paid.
  • Agents won’t have to be REALTORS® to be part of the MLS.  Even though this is already true in several parts of the country, most MLS’s require that agents be a REALTOR® (so be a member of the National Association of REALTORS® (NAR)) to join the MLS.  I believe that all MLS’s in the country will be forced to allow participation by all licensed real estate brokers and agents and not just REALTORS®.  I think my prior prediction will come to fruition sooner and this one will follow so it will likely be a couple of years at least before this happens.

The bottom line is some obstacles exist today for the real estate industry as well as there are changes taking place and more coming.  While many folks don’t embrace change, call me a Pollyanna, but I think the result will be positive both for the real estate professional as well as the consumer that is buying or selling a home.

I’ll close with a quote on the topic of obstacles that I frequently share on a coaching session I do for our agents that is from Victor Kiam (the Remington razor guy) – “….there is little difference between obstacle and opportunity…

 

New Home Building Permits In St Louis Area Increase Nearly 10 Percent In 2020 From 2019

There were 4,816 building permits issued for new single-family homes in the St Louis area during 2020, an increase of 9.11% from 2019 when there were 4,414 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA).  For the second month in a row, All seven counties covered in the report saw an increase in building permits during 2020 from 2019 and with double-digit increases for four counties. Franklin County saw the largest increase at 19.40% followed by Lincoln County at 13.97%.


  

St Louis New Home Building Permits – December 2020

St Louis New Home Building Permits - December 2020

 

St Louis Drops To 23rd Highest Homeownership Rate of Major Metros In Q4 2020

The homeownership rate in the St Louis MSA for the fourth quarter of 2020 was 69.3%, according to the latest data from the U.S. Census Bureau.  This is a slight increase from the 4th quarter of the prior year when the homeownership rate in the St Louis MSA was 68.3%.  This puts St Louis 23rd on the list of the 75 largest MSA’s in the country in terms of homeownership, down from 17th on the list during the prior quarter.