2008 May | St Louis Real Estate Voice

Archive for May, 2008

St. Louis Real Estate-Market Watch May 24th, 2008

St. Louis Real Estate Market Watch by Art Wagner @ Keller Williams Realty Southwest, Sunset Hills, Mo.
May 24th, 2008
The Anatomy of St. Louis Real Estate

The St. Louis Home for Sale Team provides a weekly St. Louis County and Bi-weekly St. Charles County Market and Jefferson County Market Watch Report to review and plug into your home buying or selling scenario. Your questions and comments are welcome!

The St. Louis Real Estate Market this week continues to hold steady without any major ups or downs. Our active listings have increased a bit, along with the number of homes accepting contracts which drives our pending ratio up to 17.46 percent. With an average of 5.7 months of inventory, we are definitely in that “transitional” range, and a bit closer to a seller’s market.

Sellers-don’t get too excited, because we are still in a definite buyer’s market. This is evidenced by looking at the “average list price” of homes on the St. Louis County Market Watch Report. Over the last 5–8 weeks, the average list price has been increasing slightly, while the “average sales price” has only fluctuated about $1000.00 one way or the other. We think list prices are heading a bit higher because, one, springtime seems to bring increases. Good weather plus more buyers (competition, as the seller sees it) does not necessarily mean a higher sales price. Two, our slight reduction in inventory over the last six months means less to choose from, which in turn will tend to drive prices up a bit.

Buyer’s in the market now are still being reminded by almost everyone that they are still in control, as it is still a buyer’s market. It may still be a buyer’s market, but with inventory shrinking a bit, and listing prices inching up, buyers will be looking harder for their “Great Buy”. Evidenced by the “average sales price” in the Market Watch, buyers seem to be well-informed regarding the buying process in this unique market we are dealing with over the last eighteen to twenty-four months. It seems like irregardless of the list price increases, buyers are still able to negotiate back down to a lower sales price for their new home.

Robert Sheridan, who writes for RISMedia.com, a great real estate information publication on the Web, has a great article which helps put the current situation with the home buying and selling process and our current mortgage situation into a pretty simple perspective.

He basically states that the surprise these days isn’t the doom and gloom from all the “experts”. The surprise is that the people closest to the situation, who should have known better are still being surprised. He goes on to say that the sooner the people in and around the real estate industry face facts, the sooner we can break this market “standstill” and move forward.

Haven’t heard this current market called a “standstill” yet??? Read his article HERE, it’s a lot of what we have been telling clients and our readers for some time.

For some great information regarding the real estate market and a really cool home-value calculator, check out the report just released by the Office of Federal Housing Enterprise Oversight (OFHEO) at http://www.ofheo.gov/.

Thinking of buying or selling a home? Contact Us for additional information tailored to your specific needs.

St. Louis Real Estate St. Louis County Market Watch May 24th, 2008

St. Louis Real Estate Jefferson County Market Watch May 24th, 2008

St. Louis Real Estate St. Charles County Market Watch May 17th, 2008

St. Louis Real Estate Benchmark Report April 2008

The report begins by breaking the market into 17 distinct price ranges. Then we show current listings and current pending listings which creates a pending ratio, which is helpful on a week to week basis to see if activity is increasing or decreasing in a price category.

The report also shows the last 6 months of results and compares the data to the same 6 months of the previous year.

The Market Analysis includes data on:

Number of Active Listings (Current)
Pending Sales (Going to closing)
Pending Ratio (Active vs.Pending)
Sold (Last 6 months)
Expired (Last 6 months)1
Average List Price
Average Sale Price
Average List to Sales Price %
Days on Market (DOM)
Months worth of Inventory (Based on current pending rate)
Buyers Market: > 7 months of listing inventory

Transitional Market: 5 - 7 months of listing inventory (sometimes called a “balanced” market)

Seller Market: < 5 months of listing inventory

Average % Sale Price/List Price (0-30), (31-60), (61-90), (91-120), (120+)DOM

Notice that you’re paying a penalty for over pricing. . .hey. .it’s a fact!!

The Benchmark Report is produced monthly for:

Single Family Residence
Ranch Style
1300 - 2000 sq.ft.
3 Bedrooms
1.5 Bathrooms

Art Wagner can be reached at art@stlouisrealestatevoice.com

Posted by art | Read More | Your Comments Are Welcome! | 05.25.2008

St. Louis Real Estate - Mortgage News - Live Talk

Filed under: For Buyers, For Sellers, Mortgage News

Someone Finally Heard the Message! by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

Stop the presses! After attempting to brand myself as “Your Residential Lending Expert” for over the past 2 years, one of my past clients has finally heard the message. Dave Simons who hosts the “Dollars and Sense” money show on KMOX 1120 AM radio has asked me to join him on Wednesday, May 21, 2008 to discuss what is going on in the mortgage industry. At this time I am scheduled to go on air at approximately 10:10 a.m. The length of the visit should be around 10 minutes.

You can tune in or check out their live stream at www.kmox.com.

For questions or comments, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, Mortgage+News, Home+Buyers, Home+Sellers, KMOX+1120, Dave+Simons

Posted by doug | Read More | Your Comments Are Welcome! | 05.19.2008

St. Louis Real Estate-Market Watch May 17th, 2008

Filed under: St. Louis Market Reports

St. Louis Real Estate Market Watch by Art Wagner @ Keller Williams Realty Southwest, Sunset Hills, Mo.
May 17th, 2008
The Anatomy of St. Louis Real Estate

The St. Louis Real Estate Market this week is exhibiting more signs of improvement as active listings are increasing and accepted contracts increasing. These events have pushed the pending ratios up in most price ranges, with the average pending ratio better than 2 percent higher than two weeks ago. We are also seeing the average listing price inching upward a bit-another good sign. We’ll see if the average sales price inches up along with it in the months that follow.

For the most part, our inventory still remains in that “Transitional” area of 5–7 months. This is all great news for sellers in the marketplace, as sales are stronger and pricing seems to be getting better.

BUYERS-you better watch our market carefully the rest of the year, as your “golden opportunity” for your deal of a life-time may be slipping away. With current inventory levels and with sales strengthening, you have more competition for less inventory than you had a couple of months ago.

If the current forecast from Lawrence Yun, chief economist for the National Association of Realtors, is accurate you will see pricing start to inch upward in the second half of this year and continue into the next several years. Mr. Yun is forecasting home prices in the “Middle America” cities that have been relatively stable to increase 20 percent to 30 percent in the next five years. Based on statistics, St. Louis falls into that “relatively stable” area. Read the complete article at RISMedia.com.

Thinking of buying or selling a home? Contact Us for additional information tailored to your specific needs.

St. Louis Real Estate St. Louis County Market Watch May 17th, 2008

St. Louis Real Estate Jefferson County Market Watch April 3rd, 2008

St. Louis Real Estate St. Charles County Market Watch May 17th, 2008

St. Louis Real Estate Benchmark Report April 2008

The report also shows the last 6 months of results and compares the data to the same 6 months of the previous year.

The Market Analysis includes data on:

Transitional Market: 5 - 7 months of listing inventory (sometimes called a “balanced” market)

Seller Market: < 5 months of listing inventory

Average % Sale Price/List Price (0-30), (31-60), (61-90), (91-120), (120+)DOM

Notice that you’re paying a penalty for over pricing. . .hey. .it’s a fact!!

The Benchmark Report is produced monthly for:

Single Family Residence
Ranch Style
1300 - 2000 sq.ft.
3 Bedrooms
1.5 Bathrooms

Art Wagner can be reached at art@stlouisrealestatevoice.com

Posted by art | Read More | 2 Comments » | 05.18.2008

St. Louis Real Estate - Mortgage News - Declining Market 2

Filed under: Appraisal News, For Buyers, Mortgage News

Declining Markets Part 2 by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

So what defines a “Declining Market?” Some investors have taken their large paintbrush out and if an area; county, city or zip code has seen their average sales price drop in the last quarter; they are calling it a “Declining Market.” Others have chosen a smaller brush and have stretched the time out by reviewing the last six months. Then the rest of the investors have left the defining to the appraisers, which is whose shoulders it should fall on. They are the ones whose job is to provide support that the investor is making the right decision to purchase a loan on a certain piece of property.

So when I checked with a few appraisers to learn their definition of “Declining Market” I was not surprised to find that each appraiser had their own Declining2 definition of “Declining Market.” The thing to remember about appraisers is that what they do is not a science; it is more of an art. So again we use the paintbrush analogy and there are some appraisers that are running scared and using their large paintbrush and putting the term “Declining Market” in all of their appraisals. Others are taking the time to do a statistical review of the cost of the homes in the various areas and are applying the term when there is a continued decrease of value that exceeds 5% over three six month periods and then there are others who are only applying the term if the valuations have changed by greater than 10%.

In addition, most investors are only concerned with reducing the loan to value on Conventional loans. On FHA and VA loans, the appraiser has factored the market into the value and it does not have an impact on the amount the borrower can borrow.

For questions or comments on this, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, Mortgage+News, Appraisal, Home+Buyers, Declining+Market

Posted by doug | Read More | 4 Comments » | 05.13.2008

St. Louis Real Estate - Market Watch - May 12th, 2008

Filed under: St. Louis Market Reports

Delay Hey, it’s MOTHERS DAY, Art’s out of town, and mom’s on a dial up.

Check back Tuesday for your copy of the market report.

Meanwhile, be nice to your mom.

Posted by doug | Read More | Your Comments Are Welcome! | 05.11.2008

St. Louis Real Estate - Mortgage News - Declining Markets

Filed under: Mortgage News

Declining Markets by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

As the foreclosures and short sales begin to take effect on the housing market one of the single biggest changes that is occurring is the dreaded “Declining Market” label attached to a property in the appraisal. I have seen investors make the predetermination that certain zip codes, cities and counties are in declining markets and thus they are lowering their exposure by reducing the maximum loan on the properties in that area. Other investors have said that they will only apply declining market guides if the appraisal states that the property is in a declining market. Either way, when the declining market rules come into play, the only person that loses is the borrower.

Here are a few examples:

• The borrower is planning on putting only 5% down to purchase the property and the investor has deemed that entire zip code to be a declining market. They will only lend on the property if the buyer puts 10% down.
• An investor is planning to purchase a home with 10% down and the appraiser notes that the property is in a declining market. Now the investor has to put 15% down to get the loan.

In both cases if the borrower has the additional 5% it is an inconvenience, but the transaction will still go forward. But if the borrower does not have the additional 5%, then the deal is dead. In most cases the seller has lost valuable days marketing their property while the waiting for the buyer to get loan commitment.

Now that we know the challenges this brings I will discuss the inadequacy of how this is applied in my next post.

Chris Scheer

Chris can be reached at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, Mortgage+News, Declining+Markets, short+sale, foreclosures

Posted by doug | Read More | 1 Comment » | 05.10.2008

St. Louis Real Estate - Building Inspection - New Construction

Filed under: Building Inspection News, First Time Home Buyer, For Buyers

NEW CONSTRUCTION INSPECTIONS by Harry Morrell ASHI Certified Inspector, Allied Building Inspection

For those buyers that are considering a new home purchase and believe the home inspection should be waived just because it is a new home, BEWARE. There are many circumstances to consider when buying a new home relating to the inspection process in general that buyers should know.

If you are buying a home close in to the metropolitan area from a well known and reputable general contractor chances are that the home will be well built and up to code. However, consider that this well known builder uses many sub contractors who can always have that one bad day or are in a rush to get to that next job. Short cuts occur all the time even in those multi-million dollar homes. In the world of construction speed is everything and sometimes digs right into the heart of the quality and craftsmanship that all home buyers want. Your home inspector will go back over all the important and significant structural and mechanical components to make sure you are getting the quality that you are paying for. Remember code inspectors do not do a top to bottom inspection. If you are buying a home out in rural areas from a weekend/amateur home builder, I have four words for you, GET A HOME INSPECTION!

New construction inspections can be grouped into three major categories:

Phase Inspections
End of Construction Inspections
Warranty Inspections

Phase inspections are recommended for the buyer that is purchasing a new home in a rural area with no or little code enforcement to ensure good building quality and safety and usually includes the initial foundation pour, framing, mechanicals, and roofing.

End of construction inspections are the most common and usually are more than adequate for any purchase close in the metro area.

Warranty inspections are a great idea for builders who offer a one year top to bottom warranty.

Home owners can get their inspector to perform a top to bottom inspection before that one year warranty expires. Most common defects discovered during these type inspections are foundation wall cracks, leakage or water/moisture intrusion, concrete pad settlement, and drainage and grading issues.

Harry Morrell Most home inspectors have a solid general background in residential home building and have looked at thousands of homes during their career. Do not get side tracked by that new home being perfect. Spend a little now for an inspection to avoid paying more for a major repair or replacement later.

Harry O. Morrell can be reached at harrymorrell@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, New+Construction, Home+Buyers, ASHI+Building+Inspectors

Posted by doug | Read More | Your Comments Are Welcome! | 05.09.2008

St. Louis Real Estate - Mortgage News - Going Down

Filed under: For Buyers, Mortgage News

Lock and Load! by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon MO

Well the Federal Reserve has lowered short term interest rates once again and if you believe the written statement coming out of the meeting, they are finished lowering interest rates. The “inflation” boogeyman is haunting them as well it should be. Mortgage rates have not gone as low as they should have, for a majority of reasons:

1. RISING OIL PRICES
2. Falling value of the dollar.
3. Mortgage Backed securities are not an attractive investment.

Rising oil prices are the single biggest concern with our economy. This nation is so dependent upon oil that most everything that we do involves some use of oil or oil byproducts. Why the U.S.’ Oil Dependence is Bad for the U.S. Economy. Prices for all consumer goods are being affected by the rising price of oil, making it less likely that the consumer will have extra money to spend on non essential items.

The falling value of the dollar does have a positive; it makes it more attractive to foreign nations to purchase American goods. Unfortunately, we have become less of a manufacturing nation than we were 40 years ago. The Dollar’s Decline and Its Implications.
Along with purchasing goods, we may see foreign investment in US Real Estate since we also have declining value in real estate.

The Sub-Prime Mortgage Crisis has put a stain on all mortgage backed securities. Most investors have been trying to rid themselves of mortgage backed securities. Even though short term rates have fallen, interest rates on mortgages have not followed. This trend is brought about by the simple law of supply and demand. As the demand for mortgage backed securities has lessened, their price has gone down. When the price on a bond goes down, the yield (interest rate) goes up. Until we see demand for the mortgage backed securities increase, which would drive the yield down, we will continue to have interest rates well above where they should be.

So why do I say lock and load? The Federal Reserve is almost out of bullets to stimulate the economy. Some are predicting that the economy will soon recover. Once the Fed sees signs of a recovering economy, they are going to want to start raising rates to slow the economy. And even more importantly, reload their own gun. We have now seen the Fed lower short term rates from 5% to 2%. They would like to have some room to work again with interest rates. If they need to get some room to work, raising rates is the easiest thing for them to do. For buyers looking to purchase a home or owners wanting to refinance, it means that rates are no longer going down and now will only go up. So find your house, lock your rate and start saving your pennies. We are going to be fighting inflation for a few years! Chris Scheer can be contacted at chrisscheer@stlouisrealestatevoice.com