St Louis Distressed Home Sales Down From a Year Ago

St Louis distressed home sales declined during the first quarter of this year with distressed  home sales (foreclosures, REO’s and short sales)  in the 5-county core St Louis market (city of St Louis and counties of St Louis, St Charles, Jefferson and Franklin) accounting for 15.0% of all home sales,  This is down 18.5% from the first quarter of 2013 when St Louis distressed home sales accounted for 18.4% of all home sales, according to newly released data from RealtyTrac. As the table below shows, all the counties that make up the core of the St Louis real estate market (on the Missouri side of the river) saw short sales and REO’s decrease in the first quarter of 2014 from a year ago with the exception of REO sales in St Charles that increased 5% during the period.  All counties saw an increase in foreclosure auction activity from the first quarter of 2013 to the first quarter of 2014.

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What homes are selling in St. Louis?

what homes are selling in st louis?By: Dennis Norman

Lately the news on the real estate market has been a little more optimistic and almost encouraging at times.  Most of the news and stats are national or regional and, as I and others have said many, many times, all real estate is local.  So what’s going on in the St. Louis market and more specifically, what is selling here?

In putting together stats for this post I included data from the following areas:

Refinancing borrowers choose fixed-rate loans over ARMS

Freddie MacFreddie Mac announced that in the second quarter of 2009, refinancing borrowers overwhelmingly chose fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or fixed. In fact, ninety-nine percent of prime borrowers who originally had a conforming ARM selected a new conforming fixed-rate mortgage when they refinanced.

While 30-year fixed-rate mortgages still tend to be the preferred loan, more borrowers are choosing 15-year fixed-rate loans than before. “When interest rates hit very low levels for fixed-rate mortgages, borrowers often take tis opportunity to lower their interest rate and shorten their loan term,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “In April mortgage rates reached new lows for both 15-year and 30-year fixed rate loans. Many borrowers could shorten their loan terms without having a big increase in their mortgage payments, thereby building equity faster, reducing the total interest paid over the life of the loan, and ensuring that their loan is largely paid off by their retirement.”

Almost thirty percent of mortgages in St. Louis are underwater

Dennis Norman
Dennis Norman

According to a report issued by First American CoreLogicmore than 15.2 million U.S. mortgages, or 32.2 percent of all mortgaged properties, are in a negative equity position. In addition, according to the CoreLogic report, there are an additional 2.5 million mortgaged properties that are approaching negative equity. Negative equity and near negative equity mortgages combined account for nearly 38 percent of all residential properties with a mortgage.

firstamerican corelogic
The numbers for St. Louis are a little better than the U.S. numbers. In St. Louis, 170,871, or 29.50 percent of all properties with a mortgage, are in negative equity. A total of 208,259 mortgages, or 35.95 percent, are in near negative equity or negative equity.
The total property value of the property in St. Louis that is at risk of default is over $26.5 billion. By comparison in Chicago there is $134 billion of property at risk of default and $310 billion in Los Angeles.
Negative equity, often referred to as “underwater” or “upside down”, means the borrower owes more on their mortgage than the home is worth. Near negative equity is when mortgages are within five percent of being in a negative equity position. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

Advice to sellers from a St. Louis REALTOR – final post in the series

By: Dennis Norman

We’ll pick up where we left off after parts one and two of this series about selling a home in this market:

Question- Now for the $64 question, how should a seller properly price their home in this market?

Answer- In today’s market sellers are in fierce competition with one another for buyers. A seller can do everything right in presenting their home from maintenance and upkeep to staging, but if the price is not appropriate buyers will move on quickly. The simple truth is, there is another seller around the corner ready to set their price to appeal to the buyer pool. Unfortunately, an over-priced listing in today’s market sticks out like a sore thumb. A professional REALTOR(R) should be able to assist a seller in pricing their home appropriately for today’s buyer. Continue reading “Advice to sellers from a St. Louis REALTOR – final post in the series

Advice to sellers from a St. Louis REALTOR – part two of a series

By: Dennis Norman

We’ll pick up where we left off in part one of this series about selling a home in this market:

Question- How should a seller select an agent? What should they look for in an agent and what should a seller avoid?

Answer- Years of experience is not as important as it once was. Certainly, the seller needs an agent with market knowledge, but the fact is today’s market is new territory for all REALTORS(R). I believe a seller in today’s market needs to be certain their REALTOR(R) has a firm grasp of marketing a property to today’s buyer, which according to research by the National Association of REALTORS(R), is looking to the Internet for their next home. Continue reading “Advice to sellers from a St. Louis REALTOR – part two of a series

Advice to sellers from a St. Louis REALTOR – part one of a series

By: Dennis Norman

If you are a homeowner looking to sell your home today I don’t think I need to tell you it could be a challenge. In an effort to address some of the questions you may have about selling your home now as well as provide some useful tips and information

Now, lets find out what it takes to sell a home in this market: Continue reading “Advice to sellers from a St. Louis REALTOR – part one of a series