Ferguson vs Chesterfield – A Tale Of Two Cities

A lot has happened to affect the real estate market where I grew up in the little town of Ferguson in North County over the past decade.  First, like the rest of the country, beginning around 2000, Ferguson saw home prices increase at rates outpacing inflation until finally peaking in 2006 which then led to the housing  market bubble burst shortly thereafter.  Home prices in Ferguson, and everywhere else, then declined over the next few years until hitting bottom around the end of 2011, or beginning of 2012.  

Then, as pretty much most of the St Louis housing market was enjoying a slow and steady comeback in home prices and sales in 2014,  came the shooting of Michael Brown by Ferguson police officer Darren Wilson which resulted in riots and violent protests that unfortunately made Ferguson a household name not only around St Louis but around the country and even beyond.  Surprisingly, even though that put yet another damper on the real estate market in Ferguson, as the chart below shows, home prices continued the increase begun after hitting bottom in 2012 in spite of it.

For comparison purposes, I decided to put a 10 year chart of home prices for Ferguson next to the same for the City of Chesterfield.  Chesterfield is an affluent city in west St Louis County that has enjoyed a fairly robust housing market for a long time now and has not had anything to deal with like Ferguson did with the shooting.  When you look at the two charts (which you can click on to see a live chart with actual prices shown as you move your mouse over data points) you will see there is quite a disparity between the two cities.  For example, during 2016, the median sales price for a home in Chesterfield was $387,000, a 3.2 percent increase from 2006 when it was $375,000.  For Ferguson, the median price of homes sold during 2016 was $43,509, a decline of nearly 42 percent from 2006 when the median home price in Ferguson was $75,000.

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The Ferguson Real Estate Market..one year later

One year ago today, the small city of Ferguson gained international attention after Ferguson Police Officer Darren Wilson shot and killed Michael Brown, an incident which spurred weeks of violence and property destruction in Ferguson.  This delivered a blow to the Ferguson real estate market which was, at the time, already struggling to recover from the housing bubble burst in 2008 which had severely impacted the area.   Now that a year has passed, I wanted to see how the real estate market in Ferguson was doing.

 

Time to sell a home is down…

As the chart to the right shows, the median days on market for homes for sale in Ferguson shot up immediately after the shooting.  Since then the trend has been downward and last month the time had dropped back to slightly below a year ago.

Median days to sell a home in Ferguson

Who Lives In Ferguson?

I spent most of my childhood as well as my early adulthood living in Ferguson and have fond memories of those days. I remember, as a young child, walking down South Florissant Road, south of Carson Road, past a head shop surrounded by hippies in a building on the east side of the street where now is just a parking lot, thinking how strange everyone looked and wondering what a head shop was.  I also remember riding my bike all the way from my parents house on Spring to E.J. Korvette’s in Cool Valley to buy my mom a mothers day present.  Oh yeah, I also remember being “busted” by the railroad police when me and my dad were attempting to make off with an empty 55 gallon drum from the railroad property near the old train station. I was a teenager by this time and my latest “wild hair” was to build a forge to heat railroad spikes to the point I could pound them into some sort of art or whatever I had in mind. In either event, I needed a 55 gallon drum and found one just laying around by the railroad tracks…who would have known the railroad cared so much about their trash?

I never dreamed that some day Ferguson would be a household name, albeit for the wrong reasons.  In the past month I have spoke with reporters from the St Louis Post Dispatch, Fox 2 News, Reuters and even the Wall Street Journal, all wanting to know about the Ferguson real estate market.   I don’t know if the real estate market is just another angle to report about or if that many people are genuinely interested in the Ferguson real estate market, but it’s safe to say there are plenty of people talking about it.  An interesting thing hit me this morning….no one has asked me anything about the people that live in Ferguson, just about home prices, whether there has been “white flight”, if the market is being flooded by people wanting out, etc.   So, while I’ve been gone from Ferguson long enough not to personally know too many people there I decided to do some research and at least give some stats on who lives in Ferguson today.

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Over Half Of Ferguson Homeowners Have Negative Equity

Over half of the homeowners in Ferguson are in a negative-equity position meaning their current mortgage loan balance exceeds the current value of their home, according to data from RealtyTrac.  According to the latest data available, 51% of the homeowners in Ferguson with a mortgage are seriously underwater on their mortgages with balances that are equal to or higher than 125% of the value of their homes.  Another 14% of Ferguson homeowners have mortgage balances of between 90% and 110% of the value of their homes.

Ferguson Serious Underwater Rate More Than Double Rate for St Louis MSA…

As the table below shows, Ferguson’s seriously underwater rate, at 51%, is more than double the rate for the St Louis MSA as a whole (21%) and is nearly double the rate for St Louis county of 27%.  At the other end of the spectrum, only 6% of Ferguson homeowners have mortgages equal to 50%, or less, of the value of their homes, exactly half the rate for St Louis County and less than half the rate for the St Louis MSA.

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A Look At The Ferguson Real Estate Market

One month ago yesterday, officer Darren Wilson shot Michael Brown and suddenly Ferguson, the little city where I grew up and began my career in real estate in 1979, became the focus of national news and headlines for days and weeks ahead.  Unfortunately, the coverage of the shooting has cast Ferguson in a very negative light and no doubt will hurt the progress the city has made over the past several years to revitalize its city and make it an attractive place to live, work and start a business.  This website is about real estate, so while I think this is a tragic event and have prayed for the Michael Brown family, Darren Wilson and his family as well as the community as a whole, and continue to pray that all the facts are revealed so justice will prevail, the focus of this article is the Ferguson real estate market and the impact this has had, and will have, on it.

Ferguson Home Prices Have Been Recovering From The Trough…

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