After a tough few years, the St. Louis housing market is looking up. St. Louis on the Air host Don Marsh spoke with real estate experts Allen Brake and Brock MacLean to get their forecast for the St. Louis home buying season.
Brake is a realtor with Realty Executives of St. Louis and MacLean is an executive vice president of homes.com, an online home search service.
“From an overall, national perspective we’ve got a strong housing market that’s solidified the gains and is continuing to move in the right direction,” said MacLean. “A lot of the experts anticipate that we may see a four or five percent gain over 2014. That’s on the heels of double-digit national growth in pricing in 2013. So certainly a slower period and I think a change in the buyer profile.”
For the past few years the main home buyers have been investors turning the homes into rental properties, said MacLean. But with prices on the rise, fewer investors are purchasing homes. Now the buyer profile has shifted to prospective home owners looking to take advantage of “favorable interest rates and some easing of lending restrictions.”
According to Brake, the average interest rate is 4.5 percent in St. Louis right now—still a good interest rate, historically speaking. However, a buyer has to have a good credit score to get that rate.
“And that goes along with your loan-to value, as well. So people that wanted to buy a $200,000 house, say, can’t afford that now. So now they’re looking at a $150,000 house,” Brake said.
A Seller’s Market
Brake and MacLean agreed that it is a seller’s market right now in St. Louis due to the limited number of houses on the market.
“Depending upon the areas of St. Louis you’re talking about … you have to watch the market very, very closely because of the inventory being low. You’re seeing multiple offer situations,” Brake said.
Because the trend for the past few years has been to rent instead of purchase a home, the country has a “pent-up population” of home-buyers, said MacLean.
But at the same time, a portion of the population has come to prefer renting, “not as always an option that is strictly economic based but from a flexibility standpoint, the ability to be transient or capture opportunities that may be in other parts of the country,” he said.
Advice for Buyers and Sellers
Buyers should be realistic about what they are looking for, clearly define what their search criteria are, and research what the local market is like to find out the pricing trends, said Maclean.
Sellers should interview realtors before hiring one to make sure the realtor they hire knows the area and can talk knowledgeably about the property, said Brake.
According to MacLean, despite the increase in home prices in St. Louis there are still opportunities for buyers to find good deals.
"While there's been a strong rebound, there's still some room from where the highs were 5, 6 years ago," he said.
TLC's "My First Home" features a St. Louis couple this week, along with their realtor, Allen Brake.
Saturday, April 26, 2014
For more information, visit the TLC website.