In St. Louis county, during the past 6 months, 3072 homes were sold.  During that same period of time, 3694 homes expired out of the Multiple Listing Service (MLS) without a successful sale.  Most St. Louis real estate listings do not sell.

Marketing exposure contributes to this lack of success.  But I believe the most significant reason that homes do not sell is pricing.  You see, by virtue of the fact that they are included in the MLS, they are getting a great deal of exposure.  All real estate agents have access to the listing.  And remember that most buyers find a house through a Realtor.

But Buyers and their Realtors typically do not look at overpriced listings.  And if they do, they usually do not make realistic offers if they have to suffer the stress of “low-balling” the seller.  I talk to sellers everyday who say, “Let’s start the listing high and see what happens.”  What happens 99 out of 100 times is that the house gets no showings.  By the time we get realistic with the price, the “Days on Market” make the house look like it must have some defect.

St. Louis, and the rest of the country, has been experiencing a real estate recession.  The best way to combat this crisis is to work with a Realtor who know how to price homes.  You must have a Realtor who researches prices every day and knows how to apply them to your situation.  For more information, please visit http://www.RussellNolting.com.

We.ve seen a solid increase in St. Louis real estate sales this year.   Lawrence Yun, chief economist of the National Association of Realtors is predicting a 20% increase in home sales for the first half of 2010.  We can count on 2.6 million home purhcasers taking advantage of the credit.  Yun admits that his prediction is assuming that we will continue to see historically low interest rates of around 5.0 to 5.5% — for today’s rates contact my mortgage partner Matt Eversgerd of Stifel Bank at 314-620-7227.

Currently, the Fed plans to end its purchase of Mortgage Backed Securities.  We will see rates rise on this action.  But we shouldn’t see rates go through the roof — they will likely land in the high 5s.  The rate change from today’s 4.875 for 30 year fixed rate money to the likely 5.875% we will see in 2010, means that every $100,000 that you borrow will cost you an additional $60 per month.

For example, a $250,000 loan today has a principal and interest payment of $1324. If rates increase a full percentage point, as expected by mid-2010, that same loan amount will cost you $1480.

I’m optimistic about 2010.  Throughout this past year the St. Louis real estate market has had it’s ups and downs, but my sense is that our outlook is better than it was a year ago.

One of the reasons for my optimism…. During 2008 and 2009, while the overall St. Louis transaction volume sank by 30%, mine went up.  I’ve sold 80 homes during the 08/09 decline.  So, Nolting Real Estate is doing something right for St. Louis real estate buyers and sellers.  Check us out.

Real estate appears to be stabilizing across the Country

A recent report shows improvement in real estate across the country.  St. Louis real estate seems to be leveling as well. The well known S&P/Case-Schiller index shows that the 10 city index and the 20 city index a marked improvement in real estate in the majority of cities that it tracks. What the reports displays are small improvements or minimal devaluation in home values. Home values are up anywhere from .1% to 3.4% in ten cities. In other areas real estate values have remained flat and in harder hit areas home values are decreasing at significantly lower rates.

While the news is certainly not staggering it is encouraging because it indicates that real estate markets across the Country and right here, in St. Louis, are leveling out. Home values are falling less sharply and people are being drawn back into the real estate market. It is no surprise what is stimulating the market. Low home values, low interest rates and the First Time Home Buyer Tax Credit have combined to create an ideal buyer’s market.

For more information on the latest info click here for a report from Yahoo real estate.

1. Short sales are impossible and never get approved. It is true that short sales are more difficult but they are not impossible. A Certified Distressed Property Expert has extensive training to help homeowners in distress.
2. Banks Don’t Accept Short Sales. In reality, banks are doing whatever they can to avoid a foreclosure.
3. You must be behind on your mortgage to negotiate a short sale. Many lenders today focus on verifiable hardship, monthly cash flow shortfall and insolvency - not just people in default.
4. Buyers Avoid Short Sales. Many agents report that buyers call them looking for short sales. Short sales are becoming synonymous with a “good deal”, specifically with international buyers.
5. Listing your home as a short sale is embarrassing. Recent estimates state that 1 out of 5 homeowners in the U.S. is in this situation. You are not alone!
6. Banks prefer to foreclose. Banks do NOT want to foreclose. Banks, investors and the federal government have all publicly stated that if a person qualifies for a short sale, then the deal needs to be considered.
7. There is not enough time to negotiate a short sale before my foreclosure. Many lenders today will stall a foreclosure up to the final day of the process, with a legitimate contract.

Nolting Real Estate broker, Russell Nolting, is a Certified Distressed Property Expert® (CDPE). One of only a handful of Realtors in St Louis with this designation, a CDPE is a real estate professional with specific understanding of the complex issues now confronting the real estate industry.  Through comprehensive training and experience, we are able to provide solutions for homeowners facing hardships in today’s real estate market.

The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. I believe that in almost all cases, the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional who has the CDPE designation. We have the tools needed to help homeowners find the best solution for their situation.

While enduring financial difficulties is challenging for any family, the process of finding a qualified real estate professional should not be.  If you would like to discuss your situation, please call Russell at 314 267 2636.  Consultations are free of charge and your privacy will be protected.

Building Blocks, a blog on the Saint Louis Post-Dispatch’s website, recently posted an interesting article entitled “Is the worst of the St. Louis housing slump behind us?”

The market is strange. I sold more St. Louis, MO, homes in 2008 than ever before in my 10 year career as a Realtor. But I noticed sales starting to slump in late October 2008. The winter has been tough.

Fast forward to the present…my 20 St. Louis Metro area house listings are starting to get activity. People in all price ranges are starting to look again. Buyers are choosier than they used to be. They spend a great deal of time looking at every option. I showed one couple 35 properties. Everyone seems to think that the amazing deal is out there.

In my central and west county market, the Selling Price to List Price ratio is just over 95% since Jan 1. This should show you that the buyers who are successfully closing are paying pretty close to asking price.

It’s hard to tell if the slump is over, or if we are just seeing the Spring up-tick.  But one thing I know is certain:  

Russell Nolting
http://www.NoltingRealEstate.com

Real Estate absorption rate for St. Louis is defined as the number of months required to sell the current, St. Louis real estate inventory.  In a tough real estate market, this number is an important one to keep in mind.  The chart below shows the absorption rate for a selection of zip codes and for St. Louis county.  

Particularly shocking is the number of home sales last month in the Des Peres/ Town and Country/ 63131 area.  I’ve covered this area for a long time and am surprised to see only 4 sales in the zip code last month.  I’m sure next month’s numbers will paint a different picture.  We look at absorption rates as trends.  Nevertheless, 4 sales is pretty shocking.  

We look at absorption rate to help us gauge our expectations for our homes that are on the market.  If you put your 63021 home on the market today, you will be competing with 287 homes.  We can reasonably anticipate that only 31 of them will sell next month.  So what do we need to do to get your home to be picked?

First, we need to price your home in light of the competition.  We need to be priced lower than the competing properties of the same size, finish, and condition.  This will enable us to stand out in the sea of houses on the market.  I can advise you on how to price your St. Louis home competitively.

Second, we need to look better looking than the competition.  Buyers are judging a beauty pageant.  If you don’t stand out as the top of the heap in terms of condition and quality, you’d better be a real steal.  Nobody seems to be interested in painting, removing wallpaper and carpet, gutting kitchens, etc. these days.  The fact is, there is enough inventory out there that they don’t have to.

Consider an appreciating market. You price your home and enter it into the St. Louis MLS (which you can search by clicking here).   Because you have entered an appreciating market you will immediately be underpriced if you entered at market value.  Even if you entered the market overpriced, the market will begin to catch up to you — because the market is going up.  

But what happens when the market is falling?  What’s your strategy then?  Consider a boulder rolling down a hill…  How do you stop it?  You’ve got to get in front.  If you are priced above the market, you are constantly falling farther and farther behind the competition.  And you are becoming more and more over priced.  

When a professional Realtor prices your home in a declining market he should look at the market and then advise you to price slightly lower.  That way you’re getting ahead of the competition.  

To do this, a Realtor needs to not only show you what has sold in the past 6 months, but he must also show you what’s on the market.  Houses on the market are like people waiting to pick up donuts at the bakery.  Nobody wants to be at the end of the line.  Everytime you cut your price, you cut in front of a bunch of people in line.  The goal — CHECKOUT!!  Waiting in line stinks!

If your Realtor has the expertise to price your home, if he’s an expert, professional St. Louis Realtor with lots of experience, listen to him.  Want to know what your St. Louis home is worth?

Financing Condos in St. Louis

There is a serious financing problem with condos in St. Louis and throughout the country.  A little background… lenders love homebuyers to have 20% down.  These loans have very little risk.  When you put down less than 20%, lenders typically require that you get PMI, or Private Mortgage Insurance.  PMI is an insurance policy, paid monthly (rates based upon loan amount and credit scores — usually about 0.7% of the loan amount annually), that insures your loan in the event that you default.  

Recently, PMI companies have decided to stop insuring condo loans in “distressed” markets.  Distressed markets are housing markets that will likely continue to see declines in home value values.  Mortgage investors are considering St. Louis a “distressed” area in terms of home values.  We are not alone in this. 

Bottom line is this:  If you want to buy a condo in St. Louis, you must have 20% to put down.  Conversely, if you need to sell a condo in St. Louis, you will have to find a buyer who can put 20% down.  The ramifications are obvious, aren’t they?  It’s going to take a long time to find a buyer.

FHA is an answer to this problem.  FHA continues to loan 96.5% of the purchase price to qualified buyers — even on condos.  Here’s the catch:  Not every condo complex is FHA approved.  FHA loans are only available on select developments.  

The other answer to this crisis is the portfolio loan.  The portfolio loan is a loan from a smaller bank that will keep the loan in house and not sell to Fannie Mae or Freddie Mac.  Because they are not selling off the loan, they are able to make their own decisions on whether or not to loan.  Typically the rate will be higher and the terms less beneficial to the owner.

If you’re in the market for a St. Louis condo, you need an expert lender.  Call Matt Eversgerd of First Integrity Mortgage Services for professional advice.  His number is 314-620-7227.