With The Future Uncertain, Ferguson Real Estate Market Takes A Hit
While giving a tour of a two-story, French colonial style home that's for sale on the north side of Ferguson, realtor Pearce Neikirk said the past months have been hard on his business.
“All of us are working without the rule book here,” Neikirk said. “We don’t know how to work with this kind of a situation.”
During the course of one August weekend, Ferguson became synonymous with all kinds of trouble: Tensions between police and constituents; economic disparities and protests that escalated into violence at night. Neikirk normally does a brisk business, but after the unrest his office didn’t get a call inquiring about a Ferguson property for more than a week.
Neikirk said his clients who had just put their homes on the market were suddenly stuck. The few buyers who were interested in property in Ferguson would ask how close it was to the protests on West Florissant Avenue.
In response, Neikirk reduced the prices of many of the properties he was trying to sell and allowed six sellers to break their contracts with him.
“It’s not something we like to do. But in this circumstance it just seemed to be the right thing to do,” Neikirk said. He added that he expects most of the homes will go back on the market in the spring, when demand tends to pick up.
St. Louis Association of Realtors president Beth Braznell said it’s unclear what the long-term effects of the Ferguson unrest will be for the housing market there. She’s worried that homeowners could be taken advantage of.
“My main concerns are that speculators may be going into the area and doing what we call blockbusting, or panic selling. Trying to get people to sell their houses very, very cheaply,” Braznell said.
Braznell says the phenomenon can also happen in communities hit by a natural disaster if large amounts of people try to leave an area at the same time thereby lowering property values.
The effects of a slower housing market could be mirrored in commercial properties and the rental market as well. Braznell said,
“This isn’t just something that’s going to affect a few blocks in Ferguson. There may be businesses that were looking to relocate to the St. Louis area that reconsider. We may see changes in the structure of homeowners’ policies or prices. I just don’t know how this is going to shake out.”