Saint Louis MO Real Estate Today

Press Release: The Kelsey Group, REALTORS Offers Job Loss Protection to St. Louis Homebuyers #stl

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The Kelsey Group, REALTORS^® Kelsey Group, REALTORS Website the leading independent real estate company in Ballwin, MO., announced today it has the implementation of the HELP Program including 24 month job loss protection program for Saint Louis MO home buyers. This program becomes available by becoming part of the Creative Alliances, LLC (Enhanced Marketing) group.

CEO/Team Leader Stephanie Combs noted that “as Real Estate professionals it is our responsibility to provide our customers and clients with every opportunity for a financially stable home life for their family and loved ones. More than any other organization, The Kelsey Group, REALTORS^® understands that in these uncharted economic times, we need to do more and let our clients know we understand their circumstances.”

The Kelsey Group, REALTORS^® is proud to be one of the first real estate companies to offer the HELP Program with 24 Month Job Loss Protection to help buyers (via home sellers) make real estate decisions with a greater degree of confidence.  “This program will be the difference many St. Louis area consumers are looking for to proceed with their real estate plans” according to Combs.

Many potential homebuyers are concerned about what might happen if they were to lose their job. The Kelsey

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Group, REALTORS^®’ new Job Loss Protection program, part of the service called HELP (Homeowner Education and Loan Protection) from the Rainy Day Foundation, will help to ease the worry. It’s provided by the seller.

The Job Loss Protection portion of HELP will assist buyers who purchase a The Kelsey Group, REALTOR S^® listings as well as Buyers who are working with The Kelsey Group, REALTORS^® agents covered by Job Loss Protection in the event of an involuntary job loss within the first 24 months of the loan. The program covers mortgage payments up to $1,800 per month for up to 6 months. HELP also offers six months of phone counseling and monthly educational e-newsletters. Job Loss Protection is an important and timely service that gives St. Louis Metro area sellers a way to differentiate their property and provides buyers the confidence to purchase.

Please see a “HELP certified” The Kelsey Group, REALTORS^® agent for additional details or call the firm’s 24Hour Consumer HELP Program Hotline (866) 993-5661 x 957 for buyers or sellers who are interested in further details.

The Kelsey Group, REALTORS® is the leading independent real estate company in the St. Louis market with 67 sales agents.  Sales volume for the firm was in excess of $78 Million Dollars and more than 300 sold units for the calendar year 2008.  The Kelsey Group, REALTORS® recently announced its acquisition by Cottrell Realty Group, led by Kevin Cottrell and Stephanie Combs.  

Download Complete Press Release Here Kelsey Group, REALTORS Offers Home Buyer Job Loss Coverage Program

Download Complete Copy of the Help Program Flyer Here HELP Program Description and Flyer - For St. Louis MO Home Buyer Job Loss Assistance

Podcast - Realtyminute.com - St. Louis MO Real Estate Market Statistics

The latest Podcast is now available online:

St. Louis Market Overview Real Estate Podcast

"Kevin Cottrell's understanding of the real estate market in St. Louis is second to none.  Any party interested in finding out what's really going on would be well suited to listen to his analysis and advice."

          - Greg Abel, Broker/Owner - Avenue Real Estate Group

During this weeks session- Greg Abel and Kevin Cottrell review current market trends as well as a general economic discussion and review of current press coverage of the real estate market nationally and how it compares to the Saint Louis marketplace.

Discussion centers around the key market indicators including pending sales, active inventory and how the current market conditions for St. Louis MO Real Estate Market combined with an artificial deadline of November 30th for the $8K first time home buyer credit may prove to be the 'perfect storm' in reverse causing much angst for home buyers in the next 100 days.

Again, the Podcast can be accessed via the following link.

Latest Podcast -

The latest Podcast is now available online:

St. Louis Market Overview Real Estate Podcast

"Kevin Cottrell's understanding of the real estate market in St. Louis is second to none.  Any party interested in finding out what's really going on would be well suited to listen to his analysis and advice."

          - Greg Abel, Broker/Owner - Avenue Real Estate Group

During this weeks session- Greg Abel, Kevin Cottrell and Russ Miller review current market trends as well as a general economic discussion and review of current press coverage of the real estate market nationally and how it compares to the Saint Louis marketplace.

Discussion centers around the key market indicators including pending sales, active inventory and how they effect the key market players including Sellers, Buyers, Real Estate Brokers/Offices and agents.  Interesting discussion about how some price ranges are turning to a sellers market with low inventory levels and activity reminiscent of the 2003-2004 market.

Again, the Podcast can be accessed via the following link.

Latest Podcast Live - Economic Pearl Harbor & St. Louis MO Real Estate Market Review #stlouis

The latest Podcast is now available online:

St. Louis Market Overview Real Estate Podcast

"Kevin Cottrell's understanding of the real estate market in St. Louis is second to none.  Any party interested in finding out what's really going on would be well suited to listen to his analysis and advice."

          - Greg Abel, Broker/Owner - Avenue Real Estate Group

During this weeks session- Greg Abel, Kevin Cottrell and Russ Miller review current market trends as well as a general economic discussion and recap of Warren Buffett's position on what needs to be done by Congress and the Obama Administation to turn around the "Economic Pearl Harbor" that the US is facing.

Discussion centers around the key market indicators including pending sales, active inventory and how they effect the key market players including Sellers, Buyers, Real Estate Brokers/Offices and agents.

Again, the Podcast can be accessed via the following link.

 

Latest Podcast - Review of MLS and Market Statistics for St. Louis MO Real Estate Market

 The latest Podcast is now available online:

St. Louis Market Overview Real Estate Podcast

"Kevin Cottrell's understanding of the real estate market in St. Louis is second to none.  Any party interested in finding out what's really going on would be well suited to listen to his analysis and advice."

          - Greg Abel, Broker/Owner - Avenue Real Estate Group

During this weeks session- Greg Abel, Kevin Cottrell and Russ Miller review the latest MLS data and market statistics for the St. Louis Metro market.  Discussion centers around the key market indicators including pending sales, active inventory and how they effect the key market players including Sellers, Buyers, Real Estate Brokers/Offices and agents.

Again, the Podcast can be accessed via the following link.

 

Why Obama's Plan will Increase Short Sales and Foreclosures!

Here's a re-run of my analysis of the Obama Housing Plan:

Unfortunately, and not just for St. Louis MO homeowners who may be in trouble, it is much ado about nothing ... To complicate things, unfortunately, our friends in the media know little (and want to report less about the truths of the market – remember sensational title sell best) about the housing crisis that we're living through, but let's start talking about this new "Homeowner Affordability and Stability Plan" that was announced by the President.

Obama’s administration is saying that the plan will enable "up to 4 to 5 million responsible homeowners to refinance."  That's true ... and a great boom for loan officers and title companies, but let's look a little more at these claims that they will stop foreclosures.  It helps folks who right now aren't the ones really struggling ... and ignores the folks under water on their mortgage beyond 5%.  Please let me explain as the media and most of the rest of the world missed this 5% issue – and it’s a big one for foreclosure and mortgage relief.

Let's read directly from the White Houses' summary:

Download Home_stability_plan 

"Consider a family that took out a 30-year fixed rate mortgage of $207,000 with an interest rate of 6.50% on a house worth $260,000 at the time. Today, that family has about $200,000 remaining on their mortgage, but the value of that home has fallen 15 percent to $221,000 - making them ineligible for today's low interest rates that now generally require the borrower to have 20 percent home equity. Under this refinancing plan, that family could refinance to a rate near 5.16% - reducing their annual payments by over $2,300."

Yep, they sure can do that ... but guess what?  Most of the folks who will take advantage of this are not the folks that are in foreclosure or currently facing foreclosure!  If they have a conventional mortgage with Fannie and Freddie, they aren't the issue right now ... for the most part, the subprime garbage is.

But there's a magic number out there 105%.  Yes, that's what we're talking about.  If the loan is less than than 105% of its current market value, they might be eligible for refinance.  

Here’s the crux of the issue and why this issue will NOT fix short sales and foreclosure volume in the United States.

The vast majority of the people in foreclosure (or who have been foreclosed on in the past year) purchased with 100% financing (80/20 purchase loans) or have pulled all of their equity out via a refinance using a home equity loan and/or a ‘cash out’ first/second mortgage ...

An here’s the kicker – and a bigger issue outside of St. Louis MO’s Real Estate Market - most homes lost at least 15% of value last year, and in California, Nevada, Arizona and Florida, at least double that to more than 30%.  Obam’s plan does nothing for these homeowners.

Now let's think about this further.  In order to refinance with Fannie and Freddie, you have to not only have equity in your home (or in this case you can't be under water more than 5%), but you also have the meet the guidelines for a loan refinance.  That means you have be employed.  You must have a job.   Stated and exotic NINJA (no income, no job, no assets) loans aren't around anymore.   So everyone who just lost their job doesn't qualify for this help.

But is this a good idea, regardless of whether it won't help people facing foreclosure?  Our answer is -Yes. If we can reduce mortgage rates – thus allowing millions of Americans to have more money in their pockets – this will collectively translate into more consumer spending and a speedier and more robust recovery from the recession.   Frankly I like this idea a lot more than the $400 a year tax credit that will do little to actually help our economy.

Now back to the foreclosure / short sale problem at hand.  Unfortunately, with 80%+ of distressed properties having a first and second mortgage, modifications for those who were over leveraged is going to be next to impossible unless they've been paying extra payments to bring down their loan balance.  

If you were listening carefully you hear what Obama signaled that he supports?

Cram downs.  What is a Cram Down?  Unless you were in the real estate business in the early 1990’s during the commercial real estate S&L crisis – you likely have never encountered or heard of this term. It was commonplace then and was effective – but costly (to lenders).

That's when a bankruptcy court judge steps in and basically modifies loans and cuts its principal balance – the balance amount is crammed down to a lower amount. If you’re a lender (or mortgage holder) you DO NOT like the thought of this as it guarantees costs and losses – all from a judicial system that is supposed to figure out a fair and reasonable amount to cram down the loan principal balance amount to.   

This certainly sounds like an exciting premise if you are a homeowner facing foreclosure and ready to file or already in bankruptcy.  But here's the rub: if you violate the sanctity of contracts, you will add uncertainty (and costs – which could be significant) to the end investor, which means they are not willing to pay as much for the loan portfolio.  Bottom line here, this cram down scenario will drive up interest rates.

One of the most common question I’m getting now is the following:  In fact, I spoke with a Ballwin MO homeowner contemplating his options.  Will cram downs slow short sales?

NO! , the reason people do short sales is to save their credit and stop a foreclosure.  Do you think those doing short sales want a bankruptcy on their record – something that will certainly delay their ability to purchase a home in the future significantly longer than short sale w/o foreclosure?  NO – definitely not. 

No, those are the individuals that don't want to a short sale anyhow ... those are the ones that really want to stay in the home and believe with a modification they can afford it.

What cram downs may do is create an incentive for lenders to approve more short sales and modify more loans.  Why?  Because they don't necessarily want to roll the dice with a bankruptcy court judge. 

Another question we hear every day now – in fact I heard this from a homeowner from Webster Groves and another in a condo in Kirkwood – “But I read that these banks are putting moratoriums on foreclosures?  Won't that mean fewer REOs and short sales?”

This is a key fact that the Obama Administration and the media miss daily - Who owns the majority of loans in trouble?  It isn't the banks!  It is the investors that purchased these loans.  They then hired a servicing company to service that loan on behalf of Collateralized Debt Obligation A76XE63 in Singapore.  This is critically important: the majority of homes in foreclosure are not owned by banks, they are owned by investors who bought mortgaged backed securities.

To further complicate things – as was noted in article in the Wall Street Journal today – these very investors are now threatening to sue the servicer if they mess up a modification or mishandle a foreclosure.  "The securitization has split the interest in the home loan among so many different parties that it is difficult for servicers to make a modification without fear that some significant party may sue or do something else that hurts the servicers," Kurt Eggert, a professor at Chapman University, told the Journal.  And Obama thinks that the minor financial incentive in the plan announced this week will overcome this fear of being sued – I would not expect so! (see below for specifics on the monetary carrot offered in the plan to lenders)

So, we've talked about loan refinance and cram downs.  What about the modification for those who are in foreclosure?  What is that all about?

Under the plan announced by Obama this week - First, the lender reduces the interest rate on the mortgage to no more than 38% of the borrower's income.   (Note: what if they don't have a job...kinda hard to do, huh?).  Interesting side note – the average debt to income ratio for our short sale clients who we gain approval on their sale is 83% - BEFORE the mortgage debt is added in – with mortgage debt –their ratios are over 100% meaning they are paying more out per month at their current loan interest rate than they take in per month.   These clients would NOT be eligible for the program.

Second, the government will match dollar for dollar the reduction from 38% to 31% debt to income ratio (government is buying down interest rates, not a bad idea, but the investor has to take the hit getting to 38% which many of them won't do).

Third, lenders must keep the modification in place for 5 years.

In order to incentivize lenders, the government will pay the $1,000 for the initial modification and then will give a $1,000 payment for the next three years if the loan is current.

Then the government will give a carrot to the homeowner of a $1,000 principal reduction for up to $1,000 each year for the next 5 years.

So does this do anything to really stem the foreclosure tide?  Unfortunately not really ... because lenders know the nasty statistics that most folks don't want to talk about.

But the New York Times told it to everyone on its front page today.  Guess what?   Read it for yourself: "The nation's 14 largest banks reported that more than half of the loans they modified last year were delinquent again after just six months, according to the federal bank regulator, the comptroller of the currency."

Yes, after just six months over half of the modifications that were done went back into foreclosure.  Why?  First of all, a lot of people that never should have been homeowners became homeowners with 100% financing.  They aren't ready for the responsibility of owning a home and aren't able to manage their finances accordingly. Second, the economy has a lot of folks wiped out and they've lost their job.  And third, after paying for a property that they know is $75,000+ underwater, at some point they just walk from it because it frankly doesn't make economic sense to keep it, especially since their credit is shot already because they've missed so many payments.  They can bail out now, rebuild their credit, and buy something again in a few more years (with a short sale they only have to generally wait about 2 years).

So what really happened this week?  A big mess just got messier.  False hope was given to millions of people facing foreclosure that own homes that are never going to get refinance or modified in a meaningful manner.

If you are behind on your mortgage and looking for foreclosure help in Saint. Louis MO – have zero or negative equity or are looking to evaluate whether a short sale is the right option for you, please CALL US TODAY – 314-779-3688 or email us at shortsalehelp@cottrellrealty.com . 

For qualified homeowners – we are getting more than 80% of our short sales approved by lenders.

Readers looking for additional short sale information can click here.

We expect the volume to continue to increase in 2009 with lenders becoming MORE and not less inclined to do a short sale vs. a cram down or foreclosure.  Its saves them money and mitigates their losses.

Stimulus Bill the Economy and Real Estate – A positive perspective for St. Louis MO

The following is our analysis and review of the Stimulis Bill and Treasury announcements made this week – This is the number one topic on every home buyer and seller in the St. Louis MO market at present.

 

The Stimulis package AND the Treasury's package related to stabilizing the markets must be reviewed holistically as in our view, as the plans compliment each other.  This is certainly how the Obama administration and team are looking at it.

 

Most real estate economists, NAR (National Association of Realtors) and we believe that 4 key tenets are needed to actually see real stimulus in the marketplace:

 

Here they are: 1) Raise loan limits for high cost areas, 2) make the $7,500 tax credit a true tax credit and NOT a loan, 3) find ways to push interest rates down (which are higher than they should be due to systemic risk in the markets currently) – our view is the premium in the market was about 200 basis points (or 2% as of last fall), and lastly 4) help provide proactive foreclosure/short sale solutions.

Now here’s the positive perspective of where the economy is at present:

 

1) Residential loan limits will be raised to $727,000 in high cost areas

 

2) The Stimulus Bill raises the tax credit to $8,000 with NO payback [aka – it’s a true credit]

 

3) Interest rates on residential mortgages have come down 125-150 basis points since the fall of 2008.  They are at historically low rates – not to take away the lament of buyers and borrowers who may have missed the absolute low point in 2009 which occurred several weeks ago.

 

4)  The Stimulus Bill – as approved this past Friday - has over $50 billion for foreclosure mitigation.   Geithner’s Treasury plan, albeit poorly received this past week, has signaled that the second half of TARP and TALF monies will be used to mitigate foreclosures.  We’ll certainly hear more on this in the next week or two as the actual plan is released by the Obama Administration.

 

Our belief is that these monies will be applied through a government guarantee, used to drive down mortgage interest rates by government (Federal Reserve) purchase of another $200-300 billion of mortgage paper from the GSES's (Fannie Mae and Freddie Mac).  Such a purchase would thereby free them up to turn around and make a similar amount of new mortgages.  Finally, Fannie has just recently agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.  The pool of investors who can purchase property just got larger!

The final dynamic that entered the market this week is a much anticipated ‘voluntary cease and desist’ on foreclosure sales – initially by JP Morgan Chase and Citigroup.  Market expectations are that more than 95% of lenders will follow suit and stop foreclosures for the next 3 weeks.

 

We’ll keep you posted.  2009 is certainly shaping up to be an exciting year!

 

Kevin Cottrell / Cottrell Realty Group

http://www.cottrellrealty.com

 

 

St. Louis Real Estate Market - Latest Podcast is live regarding the Stimulus Package!

 The latest Podcast is now available online:

St. Louis Market Overview Real Estate Podcast

"Kevin Cottrell is my go-to source for the most reliable information on the St. Louis Real Estate Market.  Whether you are a seller, buyer or real estate agent looking for reliable and accurate data or analysis on the market, he's the best source around."

          - Russ Miller, Sr. Loan Officer, MetroCities Mortgage

During this weeks session- Greg Abel, Kevin Cottrell and Russ Miller cover the key topic on everyone in St. Louis' mind - the stimulus package and its potential effect on the residential real estate market.  Kevin also discusses key market statistics including St. Louis MO January 09 recap for new listings and pendings and implications for the market

Again, the Podcast can be accessed via the following website address.

http://www.realtyminute.com/

Former HUD Secretary shares view on Job Losses vs. Home Price Drops driving foreclosures

Former Secretary shares his views on CNBC this morning in key areas that all home buyers and sellers in St. Louis should pay attention to:

*  Buyers are moving back into markets - including Saint Louis - as rates move up.  Fear that they may miss their best opportunities to buy as rates rise

*  Foreclosures are in pockets in specific areas - this is definitely true in St. Louis MO as we've outlined in previous blog posts

* Foreclosures are concentrated in California, Arizonia, Florida, Nevada - even these areas are seeing increases in sales volumes now

*  Majority of loans are government sponsored - we've certainly seen this in St. Louis - 80% of sales are below limit allowed for FHA

*  Job creation is key to turning markets around - No better time for stimulus plan - today's the day

See complete interview here

This is yet another well-placed party who is now discussing the fact that 2009 will be a tough year but things have begun to turn around for the real estate markets -  This is consistent with what we believe to be the case in St. Louis MO - as was discussed in our previous post - supply has already corrected - the number of new listings in the market for January was at a level of 2002 and availability (active listings is at the lowest levels seen in years). 

With buyer sentiment increased following positive action by Congress - we expect demand to continue its strong pace throughout 2009 - and there's even a slim chance - that buyer (demand) activity could even pick up in 2009 over 2008 levels with a great package from Congress and the Obama administration.

Stay tuned - 2009 is going to be a very interesting year!

St. Louis MO Real Estate Total Market Overview - MLS Market Statistics and Real Estate Market Update

Cottrell Report – Total Market Overview for Week Ending 2/6/09

Saint Louis , MO Real Estate Market Update & MLS Statistics Overview

		Current WK	4 Weeks	1 Yr	Trend
Active Listings		3,954	3,881	4,680	+
Pending Ratio		9.6%	9.4%	12.9%	=
Pendings Previous 30 Days		262	199	n/a	+
Pendings below 300K (%)		77.8%	82%	n/a	+
Price Reductions		11.2%	9.4%	18.2%	-
Days on Market*		84.1	90.5	69.8	+
List/Selling Price(%)**		95.1%	95.3%	96.9%	-
*Weighted Average Days on Market for Listings Sold
**Average List/Sell% for all listings sold in past 6 months
Source: MARIS MLS Data Deemed Reliable but not Guaranteed
© 2008 Cottrell Realty Group/Incubation Realty Group LLC  ALL RIGHTS RESERVED

 

Download TMO2009_020309

Download Crg_list_to_sell_analysis

 “The Saint Louis MO real estate market remained unseasonably slow this past month.  Many listings – including new or reduced priced listings – had NO or few showings…The icy and cold weather combined with waiting for a stimulus package and foreclosure rescue plan from President Obama and Congress certainly did not help.”

 

Now - For some good news!

 

Some well priced houses and condos are receiving offers and selling (provided  seller’s are motivated and realistic in their pricing expectations)  – we have negotiated 2 contracts in the past 7 days and are working several other offers  currently on additional listings.

 

Supply side – Listing Inventory Continues to be a record low levels – market has corrected with significantly lower available listings – In the current market, available listing inventory is 15.5% lower than the same period last year. 

 

For reference, 2008 available listing inventory levels were approximately 15-17% below 2006/2007 levels.  This has resulted in a market contraction of more than 25% (compared to the peak of the market in 2005/2006 in sales represented by the number of transactions.

 

This trend appears to be continuing with 17% fewer listings being activated during January 2009 when compared with January 2008.  The last time new listings were at this low a level was January 2002.

 

In addition, sellers are much more realistic now – those that do NOT have to sell are not selling or attempting to market their homes or condos in St. Louis.  As we’ve previously discussed, a fairly significant population of sellers exist in the Saint Louis Metro market who are in current loan products that no longer exist.  As such, they are unable to sell and then re-purchase again.  As such, many of them who would normally be coming on the market to sell during the spring selling season are not coming on – hence the significantly lower listing inventory.

 

  Note: If you have a listing that has been rejected by the market – few or zero showings or showings and no offers – call us today at 314-779-3600 for a free NO OBLIGATION listing evaluation.

 

We sold a record number of 91+ homes in 2008 - despite the challenging market conditions.  Ask me for details on our aggressive, proven marketing plan and how it can get yours sold too!

 

Pending Ratio stable again week over week!

The pending ratio remained near the mid 9% range which is considerably lower than the same time last year when the ratio was %.  This ratio very close to the lowest level of 2007 and we expect the pending ratio to decline further based on seasonal reductions of buyers in the fall and winter in Saint Louis, MO.

 .

As was mentioned above, the supply side of the St. Louis Metro Real Estate market has contracted significantly.  In addition, the trend which began in October/November 2008 on the buy side of the market (as measured by pendings has continued). Activity below $300K price points (as measured by the % of contracts – # of pending contracts in the most recent past 30 days) continues to dominate sales.  This is directly the result of plentiful financing using FHA loan programs for buyers at historically low rates.  FHA loan limits beginning Jan 2009 for the St. Louis Metro were adjusted to $271,250. 

 

Now as buyers purchase homes up to the loan limits allowed by FHA, this frees up equity for sellers of these home, a portion of which will purchase a new home in a higher price range – commonly referred to as a ‘move up buyer.’ 

 

The easiest way to see this happening in the market is to closely watch the % of transactions below 300K and as the active buyers using FHA financing continue to generate additional move up buyers with closings, the % will decline (with a larger # of pending contracts initially in the $300-350K range and then $350-400K price range).

 

This is exactly what we are seeing in the Saint Louis Metro since early January.   The wild card in all of this analysis is the rumored availability of a stimulus package from Congress which will increase the amount of a home buyer tax credit to $15,000 with availability to all buyers (not just first time home buyers).  In addition, the tax credit will supposedly be a true credit without the restrictions on repayment and qualifications which burdened the tax credit program introduced by Congress in mid-2008. 

 

This will truly be a watershed week provided Congress gets a realistic stimulus plan in place which gains approval and is signed into law by President Obama.

 

“A huge number of Saint Louis MO home sellers reduced their prices in the past 7 days – more than 453 price reductions -represents a reduction by almost 1 in every 12 listings! …”

Price Reductions continue at record levels

 

 

Despite having lower levels of inventory, the buyer pool has also decreased to a level where there are more active listings available in many submarkets in St. Louis MO than buyers who will purchase in a reasonable timeframe. Relative pending ratios for these submarkets and price ranges are well below 10%.  In these specific areas, even significant price reductions have been met with limited to no new showings.  These areas are definitely targets for sellers to consider  Lease/Purchases – something we’ve  developed as a successful aggressive strategy to re-position a listing to compete with a large number of available properties. 

 

IMPORTANT NOTE:  Seller’s in some Saint Louis areas may get one and only one shot at selling their house or condo in 2009.  A seller of a condo in Clayton MO or a house in Ballwin MO who receives an offer – however poorly presented or structured – should carefully weigh whether this is the only and best offer they will receive.  We’ve worked with many a disappointed seller – who disregarded the advice from their seasoned agent that ‘this is likely the best offer – and likely the only offer given current market conditions that you will see.”  Smart sellers are getting aggressive and respond without judgment or ego to offers – regardless of how low the initial offering price is.  We recently looked at 20 listings we terminated or we let expire with sellers due to a lack of consensus on the correct price for getting the home sold.  Remarkably, the majority of these listings either NEVER sold -were removed from the market altogether or were re-marketed by other agents and ultimately sold at levels even below what we suggested as the market deteriorated.  In one case in Webster Groves, the sellers have carried two rehabbed homes at ridiculously high prices and now are trying to rent – 18 months later.  This seller commented to me this past week – “God, I really wish we had taken your advice and counsel – we’ve lost a fortune with holding out.”

 

“With the stock market meltdown last fall, smart investors and home buyers are realizing that at no time has the St. Louis MO real estate market ever subjected their invested capital to the extreme risk that the stock market does.  When was the last time you saw a house price decline by 7% in a day in Saint Louis?  - NEVER“

 

Significant Opportunity for Saint Louis for homebuyers!

 

The shift in the real estate market in Saint Louis provides a significant opportunity for home buyers.  With the stock market meltdown, many smart investors and home buyers are realizing that at no time has the St. Louis

 real estate market ever subjected their invested capital to the extreme risk that the stock market does.  When was the last time you saw a house price decline by 7% in a day in Saint Louis?  NEVER 

 

We have received a record number of calls from buyers and investors looking to move capital into real estate using self directed IRAs.  Beware – your friendly investment advisor at Edward Jones, AG Edwards, etc will tell you that you can NOT do this.  This is not accurate.  Smart buyers are already converting their IRAs and investment accounts to self-directed accounts and looking to move in to a more stable investment asset of real estate in  St. Louis.

 

Call us today at 314-779-3690 for more details and a referral to a company that can assist with self-directed IRAs.

 

As we discussed previously, as a home buyer looking in St. Louis MO, you need a market expert buyer agent who can assist with the selection of homes that represent the best value and when you find the best home in Saint Louis MO, provide the critical analysis for potential purchases (is the home priced in such a manner where it represents a significant value, has it had price a price reduction(s) – when, by how much? What do the comparable sales indicate?  These are all key things that a professional buyer specialist can provide – Just make sure your agent is a market expert!

 

We will continue to watch this measure carefully along with the overall list to sell ratio for pricing which has remained below 96% since December 2007.  It is important to note that the list to sales ratio is considerably lower than the 97.4% seen two years ago in St. Louis.

 

 Both indicators show activity as well as aggressive offers being accepted from the relatively smaller pool of buyers who are active in the marketplace.   For reference, the national list/sell ratio is below 90% and in some cases – markets with significant foreclosure and bank owned inventory – way below this number.

 

Readers should note that both the List to Sale Ratio and the Weighted Average Days on Market are lagging indicators of market condition – they contain a rolling 6 months of data – and as such will not be the first indicator of market correction.  The pending ratio (see above) is the leading indicator and as such will show the first and strongest sign of a shift in the market.

Unfortunately, the local and national press focus on other indicators that are either plainly inaccurate or lag (imagine days on market declining for 30 weeks – when pending ratio reversed trend for more than 6 of those weeks) the market in terms of shifts.

 

Based on this fact, the press and most real estate agents and brokers normally watching the days on market would believe that the market is improving (days on market have been declining).  However, the number of buyers under contract (pending ratio) has declined significantly (by over 24%) in the past month.  We’ll be watching this carefully for any continued degradation in the pending ratio.

 

Note:  Complete definitions of all terms for the Cottrell Report are found here.

 

Kevin Cottrell /Cottrell Realty Group in Saint Louis MO