St. Louis Real Estate-Market Watch January 17th, 2009

Saint Louis Real Estate Market Watch by Art Wagner @ Keller Williams Realty Southwest, Sunset Hills, Mo.
January 17th, 2009
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!

St. Louis Real Estate- Short Sale Misconceptions Abound.

Lately, we have been involved in a number of “short sale” transactions and feel a need to say something here.

A brief defintion of a Short Sale is when a homeowner must sell their home for less than they owe on the current mortgage, or mortgages. This is part of the “pre-Foreclosure” period, and the lender is already involved, as they must approve the “short sale” offer from a buyer. A number of things may cause this situation; job loss, divorce, job relocation, medical emergencies, or any major life changing event.

Many people we talk to think that this is an opportunity to get a “great deal” or “steal a home” for far less than it is really worth. In some parts of the country, where short sales and foreclosures are a very large percentage of the business, this may be the case. In our local St. Louis Market, our foreclosure and short sale percentages are about 5-8 percent of the current market.

OK, there are instances where a home is sold on a short sale for well below market value. The major reason for that in our market is that the home is in need of repair and / or updating. The homes in our market that are up-to-date, and in good repair will sell at or slightly below market value.

Lenders involved in the Short Sale process will do their own evaluation of the value of a home, much in the same way that a Realtor will determine a home’s value. The lender will hire a Realtor to do a Comparative Market Analysis of the home and then apply their own formula to determine what value they will accept for the home. We can’t divulge that formula, because we don’t know it and different lenders operate differently. We can say that needed repairs, location, condition, and comparable sales in the area all come into play. The lender will also weigh their costs associated with having to own the home, if they have to foreclose on it, and what their benefit would be to sell it now. The costs to the lender to own the home could be tens of thousands of dollars.

The bottom line is this: In our local St. Louis Market, good quality homes, whether in a short sale position or not, will still command a fair price. Homes that are dated and in need of repairs will continue to be the “deal of a lifetime” that everyone is talking about.

Buyers, if you are looking for a “move-in ready” home, expect to pay a fair price. If you are ready, willing and able to pick up a paint brush, hammer, or maybe even call a contractor, you will certainly be able to find your “Great Deal”. For the most part, in our market the two do not go hand-in-hand.

Think about this: Home values now in St. Louis are terrific, coupled with historically low interest rates. If everyone could get their drastically reduced, bargain priced home, what is that doing for real estate values going forward? We are lucky; we’re in a fairly stable market, and I would hate to see our home values degrade further into the future.

Take a look at our recent Market Watch Report; Our compilations, which are based on our Multiple Listing Statistics include any short sale and foreclosure activity in all price ranges. We continually can show average list price to sales price percentages in almost all price ranges above 97 percent.

There are good deals and great value in our market now, and a lot of us won’t realize it until the market starts to move upward again.

REAL ESTATE AGENTS AND FOR SALE BY OWNERS- Are your listings and / or home sitting on the market too long?? 120 days or more?? We have a program designed to get your listing or FSBO home sold. Real Estate Agents get paid their commission in full. Contact us for more info.

WHO DO YOU KNOW NOW that is challenged with their mortgage payments OR needs to sell for less than their home is worth?? WE CAN HELP!!

WHO DO YOU KNOW that’s thinking of buying or selling a home?

Contact Doug Aegerter or Art Wagner for more information and a FREE Comparative Market Analysis (CMA) of your home or your neighborhood.

Fill out the form below to view the Market Report.

This entry was posted on Sunday, January 18th, 2009 at 7:43 pm and is filed under St. Louis Market Reports. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.