The 5-year mark: Local home prices and sales continue climbing slowly upward, say Realtors
This article first appeared in the St. Louis Beacon: The local housing market, which hit bottom after the U.S. financial crisis in 2008, is continuing its slow but steady recovery, says the head of the St. Louis Association of Realtors.
Through August, home prices have edged up this year in St. Louis County and St. Louis, and it’s taking about a month less to sell them, said Donna Zerega, president of the Realtors trade group, which has about 8,000 members.
"The bottom line is that everything’s up -- except days on market, which is down. All those signs are good,” she said.
Sales slowed in August, but that is normal, as well, Zerega said. August is traditionally a slow month for home sales because many buyers are focused on back-to-school planning. She expects sales to pick up again in September and October, slowing around the holidays -- the traditional market cycle.
Housing was at the heart of the financial crisis five years ago and plays a vital role in the nation's economic recovery. The failure of risky, subprime mortgages set off a flood of foreclosures across the nation that started the economic dominoes falling. Some of the nation’s largest financial institutions teetered on collapse due to their heavy investment in complicated mortgage-backed securities. The stock market plummetted, along with real estate sales.
The house price bubble wasn’t as big in St. Louis, so neither was the crash, said Zerega, who is with Prudential Alliance and has been selling real estate for 30 years. Even so, it’s been a slow climb up from the bottom, though recent numbers have been encouraging.
"This year has been better than last year, and that was better than the year before,” she said.
By the numbers: Where are we now?
These statistics were provided by the St. Louis Association of Realtors:
• Days on market: In general, houses are selling about a month quicker than a year ago. In St. Louis County, the average days on market were 77, down from 102 in August 2012. In St. Louis, the drop was even greater: 74 days, down from 109 in August. A similar decline was reported in St. Charles County: from 110 days in August 2012 to 74 last month.
• Prices were up: The average sales price in St. Louis County was $225,436, up from $201,505 in August 2012. The city average climbed to $131,615 from $120,174 in August 2012. In St. Charles County, the average stayed about the same: $195,773 in August 2012, compared to $196,170 this August.
• The average median sales price for St. Louis and St. Louis County was $141,000 through July 2013. The average median price for St. Louis and St. Louis County was $124,000 in 2012 and $119,000 in 2011.
• More sales: In St. Louis County, 1,468 homes sold last month, compared to 1,275 in August 2012. The city saw 308 sales, compared to 285 in August 2012. In St. Charles County, sales rose to 610 in August, up from 544 in August 2012.
• A steady climb: During the first three quarters of this year, 10,024 homes have sold in St. Louis County, and 2,245 in St. Louis, totaling 12,269. In 2012, sales for the entire year for St. Louis City and County totaled 15,224, compared to 13,311 for 2011.
'Nobody wants to take a loss'
Local Realtors report more activity among young first-time homebuyers who are trying to avoid increases in mortgage interest rates. And rising prices are spurring older homeowners, who have been waiting to downsize, to list their homes, Zerega said.
"It seems like all segments are moving better than they were, including the million-dollar segment,” she said. "You might think they’re not as affected by interest rates, but there’s something to be said about attitude. Nobody wants to take a loss -- or solidify a loss.”
The housing recovery has been uneven across the region, Zerega said. Some popular neighborhoods in St. Louis County have been short on listings, with quick sales in communities like Ballwin and Webster Groves. On the other hand, prices and days on market have not risen in Franklin and Jefferson counties.
Rising interest rates, although still low, could impact future sales, she said. Interest rates have risen about 1 percent; the average 30-year fixed rate is now about 4.5 percent.
The slowing of foreclosures – both regionally and nationally -- has contributed to the increase in prices, she said.
"There are still some neighborhoods that have been affected, and it’s hard to turn that around because the comparables are still so low,” she said.
Zerega said that price and location are still the keys to success.
"When you price a home you have to take into consideration condition and the location and other homes like it in the location,” she said. "A home sells because it’s priced right for the condition and the market.”
The 5-year mark: Snapshots of the recovery
This series of economic snapshots focuses on where the U.S. economy stands five years after the meltdown of some of the nation’s largest financial institutions.
To learn more, check out this Washington Post graphic that summarizes the major events of that harrowing week in September 2008.