Interestingly, my very urban neighborhood of Tower Grove Heights 
Commerce and industry (aka JOBS) have also slowly moved into areas surrounding the city. We also have another urban “hub” in Clayton, so my guess would be that the abandonment described in this article may be limited to the fringes of the metro area, Franklin County, St. Charles County, Jefferson County, and the Metro East.
Last month we were able to list the Ballpark Lofts! A Blue Urban project, these lofts were long thought to be sold out within 1 day. An NFL style draft was a great concept, but did, combined with the recession, didn’t work out past the theory. As downtown specialists, never heard until recently that there were some units that didn’t close that had come back on the market.
So today, the buildings completed. The units are spectacular, many having views of the stadium, Stan Musials statue and the Gateway Arch. Spring training starts next week, and in a short time the area surrounding Busch Stadium will take on a new life as it does every year.
We’re holding the lofts open today for the first time and we have a special buyer’s incentive! Any unit reserved today will receive a custom paint package at closing!
The open house will be from 12pm to 3! We hope to see you there!
My good ole American Heritage Dictionary (2nd College Edition) defines depreciation as “a decrease or loss in value because of wear, age, or other cause.” That’s what the dictionary says. Lately, media portrayal of real estate depreciation has been the rage.
Recently I received a message from someone asking how much homes have depreciated in their neighborhood (also mine) in the past few years. Look at the news…..10%, 20%, the stories are endless. But are they correct?
My thought is “no.”
An important factor in the definition is that depreciation can only accurately be determined on one subject property. By definition, a “decrease or loss in value” (or an increase) can’t definitively be calculated by averaging current sales and subtracting. It has to be explored by looking at one property and determining the difference in its value based upon what it sells for, then averaging that number by the months or years between sales. While appraisers generally use the “comparative sales approach” to estimating the value of a property, we have to keep in mind that it still is an estimate.
The problem with TV, Print, and internet media news is that they are taking an average of what homes sold for in the past then averaging home sales currently and calculating depreciation based on the two averages. Question: What if all the trashy houses sell in 2009 and the nice ones sell in 2005. What if there is a balance between distressed (foreclosure) sales in 2005 but an increase in foreclosure sales in 2009? Does the market value drop for a home in great condition even though the only sales are homes in poor condition?
The truth is that foreclosures aren’t something new. In trying to establish a value, appraisers really aren’t supposed to compare homes in good condition being sold at market in non-distressed situations with foreclosures. Also, if a home sells for 15% below market value, but needs that same amount of repairs and updates, appraisers consider that too. The problem today is that there are some situations where finding a non-distressed sale that is similar to the subject property is difficult.
It was great to get a question from a home owner because it gives me the opportunity to try provide a realistic case study that people can see. Hearing the news is something just about everyone does, but the style of reporting, producing sound bytes, over-generalizing etc. really would gloss over most of the facts in just about any industry.
Coming up……Case Study of Tower Grove South home appreciation.
Last week, I put down a fair amount of information on the downtown real estate market and provided the sales information about the area. I also talked a bit about how the year of 2008 felt for a real estate professional (2008 Real Estate Sales Downtown ).
The post is something I’ve tried to do for a few years. Putting the year in perspective.
Of course, that was just downtown.
Hearing a news broadcast yesterday, I heard some remark about housing values and felt that the report was misinformation; exagerating the markets downturn.
Today I pulled up the city wide sales statistics. Looking at single family residential, condominiums and multi-family homes, the report is included below, but the most notable data follows:
Year—-Total Sales Number/$ Value—-Average Price—Days on Market
2007——–5000 / $701,227,559———$140,246—————88
2008——–4532 / $515,009,046———$113,638—————99
We’re hearing lots of talk about foreclosures. Stories of 
predatory lending, struggling banks, their effects on home prices. It seems that everyone is a looser when it comes to foreclosures. Then, late at night, some slick info-mercial on real estate comes on and talks of making millions in real estate through distressed property sales (aka foreclosures and tax sales).
St. Louis has its share of foreclosures. It seems that there are more in the county now, but there has always been a fair amount right here. So naturally, those in the market to buy get excited. They may not buy into the info-mercials plot to make millions, but maybe they can just find one great deal for their own residence. What a deal!
When it comes to foreclosures, there are just a few things important to know about the process that seem to get glossed over or missed completely. Buying foreclosures does come with some drawbacks too.
The public perception today is that banks are in trouble. That is also a fact, but to derive logically that because banks are in trouble, they will be more accomodating in selling off their owned assets (REO) portfolio is a FALACY. Today banks are as slow and seemingly disinterested in working to sell properties as they ever have been. Negotiation processes haven’t changed, and problems dealing with buying foreclosures have actually increased in the past few years.
Another fallacy which can sometimes work out well for a buyer is that banks sell properties below market.
Banks sell <a href="distressed property“>distressed properties. People get behind, they are unable to perform repairs and do regular maintenance that a financially responsible homeowner would do. Additionally, most of the time, some additional destruction takes place. My quasi-psychological speculation is that people resent the bank and the house so they destroy or otherwise dismantle the place, lowering the value significantly. When buyer’s see the place after the foreclosure, its sometimes overwhelming how much stuff needs to be done to even make the place livable. Painting a few walls may not be much, but re-painting an entire house can take a full week or more of full time painting.
Repairs, Warranties, and Disclosures. Generally in a home purchase, the buyer hires a home inspector to come out and inspect all systems. This can be done while the home is under contract. If inspections aren’t satisfactory, the buyer can back out with a refund of earnest money. With foreclosures, there usually isn’t an “inspection period”, and if the buyer chooses to perform inspections, they could and often do loose the house to another buyer. So they’ve just spent $250-400 for an inspection on a house they can’t buy. No warranties come with foreclosures and there also isn’t any information available from the seller regarding when updates were made or problems experienced. These “Seller Disclosure Statements” are sometimes very useful in finding out about the condition of the home and how well it was cared for. Lastly, most non-foreclosure sales can be contingent on certain stated items being repaired. This list of items to be repaired comes after the price negotiation. Foreclosure sales virtually NEVER fix anything. Sales are done “as is”.
As a professional, many deals are done and buyer’s sometimes just don’t add up all the hassles and costs that are required with a foreclosure that wouldn’t be if the home was purchased from an owner occupant. Deals can be had, but many times it seems that if a home buyer or real estate investor had realistic costs prior to the negotiation, they would be getting just as good of a deal by NOT buying a foreclosure.
These are just a few circumstances, no where near a complete picture of the problems that could happen in buying REO properties. The bottom line in buying foreclosures: BUYER BEWARE!
My first goal in life, like any self-respecting St. Louisan, was to get out of town. Born with a negative opinion of my hometown, I failed at my first and only goal just long enough to find out I was wrong.
Living in St. Louis, it seemed that life would obviously be so much better elsewhere. I remember the first time I met someone relocating here from Florida. What was nuts was that the WANTED to be here. They started citing positives about St. Louis like we were a large URBAN FOREST and had great affordable homes, etc. One time I met a flamboyant fashion designer from New York City that had been relocated here. He hated St. Louis. His attitude seemed to typify so many of the local residents that have, as Mayor Slay describes it, a “Geographical Inferiority Complex.”
One of the big problems with St. Louis was that it was a seemingly endless collection of suburbia. We had a city, of course. Escape from New York was filmed there; a fantastic reflection of how most suburbanites felt about St. Louis. It was OK to go into the city if you worked there, or were going to a Cardinals game or being charged with a federal crime . Oh sure, there was also the Fox Theater, Lacledes Landing, Forest Park, [includes the (free and renowned)Saint Louis Zoo, The Art Museum, the History Museum, the Science Center, and the Muny Opera]. We had the Cards, Blues and the Rams too. And who can forget the Gateway Arch? Still, the city was to be avoided if possible.
College years was when my rebelious spirit got the best of me. I took the metrolink for free into the Central West End, went out to the late night clubs along Washington Avenue, Soulard and Benton Park, hung out in Forest Park, and really started to like the city. Only in small doses though.
I ended up working in the city.
Worse yet, I was required to travel around the city regularly. A thought came to mind; “this place isn’t so bad!”
Getting into some of the neighborhoods, I saw a sense of community unknown to me as a life-long suburbanite. I heard about farmer’s markets, and festivals. Friends started to move to the city. I saw some of the ill-fated “inner ring” suburbs turn around too. Places that were considered rough towns began the process of gentrification and rehabilitation.
What I saw was the beginning of a shift in our culture. Places all over the country had begun to turn around their “inner city” urban areas and it began to happen in St. Louis.
Today St. Louis continues to move forward in revitalizing itself and more and more people are making the choice to support it by relocating to one of its great neigbhorhoods. There is still more work to do and hopefully future posts will point out ways to get involved in the ongoing transformation.
Welcome to City Living: St. Louis Style!
This is a blog about St. Louis City. Its history, its present; Life in St. Louis, its ups and downs. Back in 2005, I started a blog Lofts in the Lou (http://www.LoftsintheLou.com). Downtown St. Louis is an awesome area and we are huge fans of the loft district and its recent boom. As a real estate professional and blogger though, often the stuff that comes up in life doesn’t always pertain to downtown. I’m not sure what plan is there, other than continuing to post to Lofts in the Lou and seeing where this new blog goes.
Working in real estate, it’s my business to find out what people want in a home and an area and help them find that. I work with clients throughout the area, but often find myself in the city. “Why?!?” “What are you going to do with your KIDS?!?” Those were questions posed to me by other Realtors when I told them I was moving to the city. Sometimes there is an anti-urban message in areas surrounding St. Louis City.
What brings many to the city is affordability. Home buyer’s can get so much more space for the money in the city in many cases. The city is more cosmopolitan and energetic. City homes have character and many older features that are rarely found in suburbia. The City has a greater concentration of amenities and activites. Museums, Parks, Theater, Sport & Concerts Venues; all within a few minutes drive and surrounded by great restaurants. The City embraced urbanism before it was the “new thing”.
Once a client said about his wife, “well, there’s a Wal-Mart and a two Grocery Stores, she’ll never have to go more than a few miles away.” If big box retailers and chain restaurants really get you going, then maybe city living won’t impress you. As a realtor, I always set my values aside.
Of course, the city does have problems. What city doesn’t? Most likely these will come up in St. Louis City Living.
Thanks for visiting St. Louis City Living! Come back Soon!
STL CITY LIVING 