Turn on the nightly news any day of the week and chances are you’ll see a not-too-flattering story about today’s housing market. But Kathy Beilein, general sales manager at Laura McCarthy Realtors, says the St. Louis market hasn’t seen the extreme highs and lows that have devastated other parts of the country.
“Prices here are stable and basically have remained so over the last few years,” says Beilein. “We didn’t participate in the price frenzy between 2004 and 2006 like other parts of the country, so when our prices were high, they weren’t incredibly so, and when prices fell, we remained somewhat stable.” A sign of a good market, according to Beilein, is when an area starts the year with more houses for sale in most categories than it had the year before. Even as sales slowed beginning in 2005 and continuing through 2007, St. Louis started 2008 about level with the year before, which was unheard of in other parts of the country, Beilein reports.
Last year was an interesting one, she says, for buyers, sellers and agents alike. “It was a transition year. Sellers didn’t know where to price, and although agents had a sense of where to place the home, it took a while for sellers to catch on to the market cycle,” says Beilein, who has been in the business since 1979, nearly all of it with Laura McCarthy. “We are a niche company in that we specialize in the central corridor, but we sell across all price ranges and geographic areas, from the Central West End to St. Charles.”
She says that within the St. Louis market, there are minimarkets with municipalities and even micromarkets within neighborhoods. “What’s going on in far West County, for example, is different than what is going on in the Central West End,” she explains. “Areas differ by number of homes on the market, price range and demographic.” But overall, some conditions have been constant in almost every market segment. “The time a home is on the market has increased, but the number of buyers has remained strong. We’re back to the ‘normal’ market we saw a few years back, homes must be priced reasonably to move.”
One segment that has remained strong throughout the market transition is property valued at $1 million or higher. “For sellers in the upper end of the market, 2007 went down as a good year, with prices higher than they were a year ago,” says Beilein. And thanks to jumbo loan legislation recently passed by Congress, that trend will continue. “People who qualified for jumbo loans used to be able to borrow only up to $417,000, but that loan limit has been raised. That is a change that will help mid-level buyers, too, those looking for homes between $600,000 and $800,000,” she says.
Things are expected to remain steady as we enter 2008, Beilein predicts. “Prices are stable or increasing in most states, including Missouri,” she says. “The National Real Estate Association is projecting prices will go up in the Midwest.” Inventory will also increase. “There is pent-up demand right now, so as people see that it’s not such bad idea to have a house on the market, you’ll see supply go up, which will continue to attract buyers,” she says.
Beilein says nervousness about the market stems from the saturation of information. “Between TV news, the papers and the Internet, people are getting information from many different sources, some of which can be conflicting. They come into the market with questions that need to be answered,” she says. One common misconception she’s heard pertains to mortgages. “There is talk out there that it is difficult to get a loan. Loans are still readily available, but under the conditions that were in place a few years ago. If you can put money down and are not credit-challenged, you will not have a problem,” she says.
To get your home noticed in a market that favors buyers, it’s important to set yourself up for quicker sale by making sure your home is in good condition. “Buyers are particular right now. Homes need to look current, have attractive landscaping and exterior colors, and a fresh look inside,” she advises. But she warns against going overboard. “Talk to your agent before you make any changes. They are in the market every day and they know what’s out there and where the emphasis should be. Avoid overspending, like putting on a brand-new roof when the existing one is fine. It can be as easy as just refining spaces.”
Buyers will continue to have excellent leverage, she emphasizes, and if you are a seller moving up the market, you’ll reap those benefits on the buying end. “It’s a great time to buy, and real estate remains one of the strongest investments. No matter what happens in the stock market, housing continues to appreciate and garner tax benefits.”