|
||||
|
Today, the U.S. Court of Appeals for the Seventh Circuit denied a motion by the National Association of REALTORS® (NAR) and other defendants in the Moehrl v. The National Association of Realtors lawsuit. The motion sought to appeal the decision certifying this case as a class action lawsuit. As a result of this denial, the lawsuit will be allowed to proceed. Click here or on the image below to see the full ruling.
First and foremost, let me emphasize that home selling methods and practices are not a “one size fits all” approach. There are certainly situations where a different or unique strategy is required, including, in extreme cases, one that may not be in the seller’s best financial interest but favors a higher priority for the seller. For instance, I once handled a home sale for a woman with a stalker ex-husband who wanted her home sold discreetly – no sign, no ads, no MLS, etc. In her case, privacy and conducting the sale “under the radar” for her personal safety were more important than money. This article addresses the broader market and my opinion will apply to most sellers looking to sell their homes. Now, let’s discuss an “office exclusive” listing.
Understanding this concept is a great starting point and highlights one of the reasons I’ve been writing articles about St. Louis real estate, St. Louis REALTORS®, and the St. Louis real estate industry. I believe that, in general, consumers lack sufficient knowledge about these matters to make the best choices for themselves when selecting agents to work with. As a result, I aim to share the insights I’ve gained from over 40 years in the industry. For example, most non-agent readers may not know what an “office exclusive” listing entails or whether it’s advantageous or disadvantageous for them as sellers. So, what is an office exclusive listing? In short, it’s a listing that the agent will “keep secret” to a large extent, only informing agents within their real estate brokerage and withholding your listing from the REALTOR® Multiple Listing System (MLS). Consequently, your listing will not be distributed to the thousands of websites that obtain listing information from the MLS (Zillow, Realtor.com and StLouisRealEstateSearch.com?agent_id=02107 to name a few). Wait, my listing won’t be in the MLS?? What strange and confusing times we live in! Some seemingly credible predictions made by qualified experts suggest that our banking system could collapse, our currency may become worthless, and our country may face a significant downturn. Meanwhile, others claim that there is no cause for alarm. Here in St. Louis, the real estate market continues to thrive as if everything is great in our economy, despite the fact that interest rates have doubled in the past year. I have been in this business for 43 years, and although I have seen many ups and downs in the market, I have never seen anything quite like this before. It appears that there is a stark dichotomy between the economy and the St. Louis real estate market at present, as if they are two entirely separate entities. Could this be the result of the low inventory and high demand for housing, leading homeowners to throw caution to the wind? Or is it possible that the St. Louis economy is stronger than the national economy? Whatever the reason may be, despite talk at the national level of a looming housing market crash, the St. Louis real estate market continues to thrive. Is the St Louis real estate market going to crash? Now, onto the question of whether the St. Louis real estate market is going to crash. This is a fair question, given the current issues outlined above. However, so far, there are no clear signs of a crash. That’s not to say that there won’t be any changes to the market, as I believe we’ll see some, but nothing that indicates a crash is imminent at this point. Almost a year ago, I wrote an article in which I stated that “I don’t think St. Louis home prices will come crashing down, in fact, I don’t even think they are going to decline necessarily.” This prediction has proven to be accurate. However, I also said in that same article that “I think the premiums buyers have paid over and above the value of the home they were buying are going to quickly come to an end,” and this has proven to be inaccurate. Despite my prediction, there are still bidding wars happening between buyers on new listings. The STL Market Chart table below shows that last month, the median price of homes sold was equal to 100% of the current list price at the time of sale. Given that the median is indicative of the midpoint of the frequency of values, if the midpoint is 100%, then it appears that plenty of homes are selling in excess of the list price. The data for the St. Louis real estate market shows that there is a strong buyer demand. In addition, the market is facing the persistent issue of low inventory. These factors have contributed to the resilience of the St. Louis housing market, making it unlikely to succumb to a crash at this point. However, if there is increased economic uncertainty, inflation, and rising interest rates, we may reach a tipping point and see St. Louis home prices decrease. Despite this possibility, it is unlikely to happen anytime soon based on current data. Recently I wrote a lengthy article about various current issues that are likely to bring significant changes to the real estate industry. These changes will also affect the process of buying or selling a home for consumers. Although I may be in the minority within the industry, I strongly believe that most, if not all, of the changes will benefit both consumers and real estate professionals.
Nearly two years ago, our brokerage, MORE, REALTORS® created an online real estate auction site called HomeAuctionMLS.com to provide an alternative for buyers and sellers that addresses many of the issues raised in class-action lawsuits and the investigation by the Department of Justice. The auction platform was designed to offer a transparent and fair process for both parties while ensuring that they still have the option to be represented by real estate professionals. Moreover, sellers do not have to pay the buyer’s agent’s commission, and they can even use the auction platform without paying any commission at all. What are the benefits of selling your home on HomeAuctionMLS.com?
What are the benefits of buying a home on HomeAuctionMLS.com?
If you would like to learn more about buying or selling a home, condo, or other property at auction, please don’t hesitate to contact us by clicking the button below. Additionally, you can find additional resources and information below to help you get started. Below is our St Louis Real Estate Market Report for March 2023 for the City and County of St Louis combined. You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below. St Louis Real Estate Report for March 2023 Let me begin by saying that I’m not a sensationalist, nor am I an advocate for everything I write about. Additionally, I am not an attorney, so this not a legal opinion. I am simply a real estate broker that has been very active in the profession and industry for over 40 years now. I strive to stay on top of industry and market changes so that the agents in our firm, MORE, REALTORS®, and their clients can avoid surprises and be prepared. Another reason I do this is to share what I have learned with consumers. I believe that by sharing good, relevant and accurate information to consumers, they will be equipped to make better decisions when it comes to buying or selling real estate, including how to choose an agent to best represent them.
Yes, I made a rather bold statement in my headline, but I believe it to be an accurate depiction of what is coming to the world of residential real estate, including right here in St Louis. The source of this disruption is not a single entity, but rather many. While there is a common theme to the multiple threats, they are coming from different sources. Over the past few months, I have written about all the issues I’m referring to, so below is a summary of them and links to the original articles:
According to the U.S. Census Bureau’s 2022 estimates of population and components of change report released yesterday, Lincoln County was the Missouri county that experienced the highest percentage gain in population from 2020 – 2022. As the list below shows, Lincoln County saw a 6.0% increase in popular during the period from 2020 to 2022, with Wright County coming in 2nd at 5.3% and another St Louis MSA county, Warren County, coming in 3rd on the list with a 4.8% increase in population. At the other end of the list was the City of St Louis which saw a 5.0% decline in population during the period giving it the rank of 113 of the 115 counties in Missouri that were ranked. Missouri Population Change 2020-2022 By CountyTop 10 Counties by Percentage Growth In Population (click on list to see entire list showing all Missouri Counties)
Access the complete list HERE. There were 4,170 building permits issued for new single-family homes in the St Louis area during the 12-month period ended February 28, 2023, a decrease of 10.69% from the same period a year ago when there were 4,669 permits 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 same period a year ago with four of them experiencing double-digit declines. Franklin County, on the other hand, saw an increase of nearly 19%. St Louis New Home Building Permits – February 2023(click on table below for page with live charts showing additional permit data)
For the past several months there have been many reports anticipating the moves of the Federal Reserve regarding interest rates then followed by tons of articles, blog posts and videos analyzing then predicting the impact of the Fed’s decision on the economy. The other popular topic in this area is the “Money Supply”, usually M2 money supply and whether it’s increasing or decreasing as well as the impact on the economy. Should St Louis homeowners and potential home buyers really care about the Fed Funds rate or M2 money supply? First, let’s talk about the Fed Funds rate and what it is, what it is intended to do and the affect it can have on the real estate market. The Fed Funds rate is the interest rate at which banks lend to each other overnight to maintain their reserve requirements. This rate is set by the Federal Reserve, and changes to the rate can have a ripple effect throughout the economy, including the mortgage and housing markets. When the Fed lowers the Fed Funds rate, it can stimulate economic growth by making it cheaper for banks to borrow money, which can lead to lower mortgage interest rates. Lower mortgage rates make it more affordable for homebuyers to finance their purchases, which can increase demand for homes and drive up prices. Conversely, when the Fed raises the Fed Funds rate, it can lead to higher mortgage interest rates, which can slow down the housing market and lead to lower demand and prices. Next, the the M2 money supply. The M2 money supply includes cash, checking accounts, savings accounts, and other liquid assets that can be easily converted into cash. When the M2 money supply increases, it can stimulate economic activity by making more money available for borrowing and spending. This can lead to lower mortgage interest rates as well, as banks have more funds available to lend out. However, if the M2 money supply increases too rapidly, it can lead to inflation, which can cause mortgage interest rates to rise. So, as you can see, both the Fed Funds rate and M2 money supply can have a significant impact on the cost of a home mortgage as well as home prices so I would say the answer to the question I posed is “yes”. Granted, we don’t all need to become economists or stay up late at night pouring through spreadsheets and date, but to be aware of factors that affect the economy as a whole and as a result, the real estate market we’re in, would be wise. How can knowledge of the Fed Funds rate and M2 money supply help me as a home seller or buyer? The short answer is, it gives you a little insight into perhaps where things are headed which may help you make the decision to buy or sell sooner or later. For example, perhaps you are contemplating buying an home but anguishing over the fact the mortgage interest rates are double what they were a year or two ago and you’re thinking maybe you should wait until things settle down. Well, if you see the Fed Funds rate getting increased with talk of more increases while that is no guarantee mortgage interest rates will increase as well, as I explained above, it’s certainly an indicator that is a likelihood. Therefore, you may decide it’s better to make a move now than later. What’s an easy way to track this stuff? I have the answer for you. The charts below are two of the many charts and other information available on St Louis Real Estate Search as well as from MORE, REALTORS® . The first chart shows the relationship historically between St Louis home prices and the M2 Money Supply. Generally, they follow the same trend but, when the trend for one changes, like it did with St Louis home prices (the red line on the chart) beginning in the late 90’s through the housing market bubble burst after 2006, something happens to bring them back in line. As you can see, starting a little over 3 years ago the pace at which M2 was growing outpaced St Louis home prices, but St Louis home prices quickly caught up. Now it’s the opposite and it looks like both a making a downward correction. The bottom chart shows the close relationship between the Fed Funds rate and mortgage interest rates. With little exception, when the Fed Funds rate increases or decreases, mortgage rates follow. For the past year, the Fed Funds rate has increased and the trend is upward so I wouldn’t expect to see falling mortgage interest rates anytime soon. What happens when you pair up Ted Gottlieb, Certified Senior Advisor® (CSA®) that’s a real estate broker with a real estate broker (me) that’s Smart Home Certified? You end up with solutions for older adults that allow them to live more efficiently, for longer, in their current home by increasing safety, security, accessibility and independence. Before I get to the Smart Stuff, let me explain what a CSA® is and how rare it is for a REALTOR® to also be a CSA®. Ted is the first, and only as of this article, in Missouri to achieve this. A Certified Senior Advisor® (CSA®) is a professional who has obtained a credential demonstrating expertise in the issues and concerns that affect seniors. These professionals are trained to provide guidance and support to seniors and their families in a variety of areas, including healthcare, financial and estate planning, and housing. This is rigorous training that allows the recipient to be well-versed in the complex issues that seniors face while avoiding conflicts of interest. So how do we use Smart Home technology to better serve seniors? Here are a few of the numerous benefits for seniors: Safety and security: Smart home devices such as smart locks, cameras, and motion sensors can help seniors feel more secure in their homes by alerting them to potential security risks and allowing them to monitor their home remotely. Comfort and convenience: Smart thermostats, lighting, and other devices can be programmed to adjust automatically to the user’s preferences, making it easier for seniors to stay comfortable and maintain their daily routines. Accessibility: Smart Home technology can make it easier for seniors with mobility or vision impairments to control their home environment, such as using voice commands to turn on lights or adjust the thermostat. Health monitoring: Smart home devices can track seniors’ vital signs, remind them to take medications, and even alert caregivers or emergency services in case of a medical emergency. There are even devices that will automatically dispense medications at a preset time of day. Independence: By enabling seniors to control their home environment more easily, Smart Home technology can help them maintain their independence and stay in their own homes for longer. Overall, Smart Home technology can be a valuable tool for seniors to enhance their safety, comfort, and quality of life. Trust and peace of mind matter so consider allowing the region’s first and only two brokers, with the specialized knowledge necessary, help your senior live smarter and more efficiently. If you’re not a senior, we can still help you prepare your current home for when you become a senior or get you into the right home now so you can live out your days more conveniently. The sooner you learn this technology the better. None of us are getting any younger…
Note: I’m generalizing …….. Seniors don’t want to leave their homes. I can’t tell you how many times I’ve been told “I want to be carried out feet first”. For most, the thought of selling the home is overwhelming – often paralyzing. Maybe it’s the memories, the years of accumulated “stuff”, lack of energy or the fear of what comes next. No matter the reason, just like you and me, older adults want to be where they feel safe. Enjoying their “independence” – when many times they are anything but. So, it’s status quo until a life event happens – like the loss of a spouse, a fall, illness, a diagnosis. Still, many times the goal is to stay home, maybe with help (family member or paid companion) or not. This took me a while to figure out. Frankly, when I decided to specialize in seniors real estate (2011), I didn’t know what I was getting myself into. I related well to older adults and wanted to differentiate myself from the thousands of other agents so this seemed like the right path. What I didn’t count on was overwhelming desire to stay put. So I figured, if they are not ready to sell, why not help them stay put longer and safer. I earned an aging in place designation and promoted myself as the real estate agent who helped people stay in their homes longer. Brilliant! It didn’t help pay the bills, but boy did I sleep well at night. What I did come to appreciate was the seniors I met, helped, enjoyed, protected. I got paid in coffee, corn bread and good karma ….. and every so often I got to sell a home. I learned some things along the way that you might find helpful: Older adults are chiefly concerned with maintaining control and their legacy (David Solie); Some family members are well intended while others are anything but; The equity in the home can be essential to someone’s care and legacy (so selling to that seemingly nice person who’s willing to pay cash and close fast rarely benefits the home owner or the neighbors); Not having an estate plan is more expensive than having one; Hiring a care manager is money well spent; Finding the right senior living community the first time matters, and so much more. To the general public, I offer my older adult consulting and referral services without cost or obligation – really! To the licensed real estate professional, I offer my insight and mentorship, for the asking. What I crave is that we honor our elders and treat them with the respect they so richly deserve. As the good books says, “love thy neighbor as thyself”.
Should I rent or buy a home in St Louis? This is a question St Louis REALTORS® are often asked, especially in the past few years while homes appeared to be increasing weekly, there were often more than a dozen offers on a listing and generally the market seemed out of control. Granted, some of that pandemonium has eased somewhat lately given the increase in interest rates and questions about the economy but the question still remains. While there are many non-financial reasons people choose to buy their own home or condo versus rent, we’ll just look at the cost today. Home prices increased at more than double the rate of rents… As the chart below, exclusively available from MORE, REALTORS®, shows, the median price of homes sold in St Louis during 2018 was $178,800 and increased to $240,000 in 2022 for an increase of over 34% during the 4-year period. The median rental rate of homes leased in St Louis during 2018 was $1,250 and increased to $1,450 in 2022 for an increase of 16% during the same 4-year period. During this 4-year period the rate at which the price of St Louis homes increased was more than double the rate at which the rental rates of St Louis homes increased. Factor in interest rates and the cost of home ownership increase and monthly cost of home ownership As the second chart below shows, mortgage interest rates during 2018 were in the mid-to upper 4’s and in the 6’s and even hit 7% during 2022 so this means in addition to home prices going up, payments went up even more. For the sake of this comparison, we’ll use 4.7% as the rate for 2018 and 6.7% for 2022. Therefore, the payment on a typical home in 2018 (principal and interest only based upon a 5% downpayment) would have been $881 per month and in 2022 increased by 67% to $1,471 per month. So, while the actual price of a home increased 34% during the period the monthly cost of it, in terms of house payment, increased at nearly double that rate, 67%. During the same period rents increased just 16% so the monthly cost of buying a home increased four-times as much. There were 28,500 homes sold in the St Louis 5-county core market during the 12-month period ended February, 28, 2023 a decline of 16.80% from the prior 12-months when 34,256 homes were sold according to MORE REALTORS® exclusive STL Market Report below. As the report below shows, the median price of homes sold in St Louis increased 7.62% during the same period. While the supply of St Louis homes for sale is still historically very low, it has increased significantly over the past two years rising from under a 1-month supply to the current 1.64 month supply of homes currently active on the market in St Louis. St Louis 5-County Core STL Market Report(for the 12-month period ended February 28, 2023)
Below is our St Louis Real Estate Market Report for February 2023 for the City and County of St Louis combined. You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below. St Louis Real Estate Report for February 2023 Allied Van Lines just released its Allied Magnet States Report which revealed that, across the U.S., fewer people moved in 2022 than in 2021. The report shows the number of people moving to or from a State as well as for the metropolitan areas located in that state. For last year, Missouri was considered a “balanced” state with the numbers of inbound and outbound movers being about the same at 52.3% and 47.7% respectively. Our neighbor to the east, Illinois, didn’t fair as well. Illinois was labeled as a “high outbound” state for 2022 with 66.1% of the moves being outbound and only 33.9% being inbound. The most popular cities to move to St Louis from and the most popular cities to move to from St Louis. According to the report, the city the largest number of inbound moves to St Louis were from was Chicago, IL and for the folks leaving St Louis and headed out of state the number one destination was Denver, CO. The table below shows the top 5 cities where people move to from St Louis as well a the top 5 they moved here from. Top 5 Cities Inbound Movers to St Louis Come From and Top 5 Cities Attracting St Louis Residents
|
|
|||
|
Connecting St. Louis Information St. Louis St. Louis Real Estate News Contact Us Copyright © 2023 Missouri Online Real Estate, Inc. - All Rights Reserved St Louis Real Estate News is a Trademark of Missouri Online Real Estate, Inc. Missouri Online Real Estate, Inc. 3636 South Geyer Road - Suite 100, St Louis, MO 63127 314-414-6000 - Licensed Real Estate Broker in Missouri The owner and authors this site are providing the information on this web site for general informational purposes only and make no representations, warranties (expressed or implied) or guarantees of any kind whatsoever, as to the accuracy or completeness of any information on this site or of any information found by following any link on this site. Furthermore, the owner and authors of this site will not be liable in any manner whatsoever for any errors or omissions in information on this site, nor for the availability of this information. Additionally the owner and authors of this site will not be liable for for any losses, injuries or damages in any way from the display or use of this information or as the result of following external links displayed on this site, or by responding to advertisements displayed, or contained, on this site
In using this site, users acknowledge and agree that the information on this site does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information on this web site is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. |
||||
One of the first changes that may happen is the elimination of the requirement for sellers to pay the commission to the buyer’s agent in order to list their property in the 
So, what is going to turn the real estate industry upside down?
