Multiple offers. First-day-on-the-market sales for over the asking price. A jump in the number of transactions.
That’s a snapshot of the local housing market.
Through the first three months of the year, the number of homes sold in St. Louis and St. Charles counties, plus St. Louis, was up 8 percent — to 4,768 — from 4,405 in the first quarter of 2015, according to the Mid America Regional Information Systems. The quarterly figure is preliminary.
In addition, the 4,402 homes and condos under contract indicate the likelihood of strong sales this month, given that 2,179 residences sold last April.
“We are crazy busy with sales and as I can see and hear, so is everyone else,” said Bob Bax, a broker and co-owner of Berkshire Hathaway HomeServices in St. Louis.
• A house in Ladue hit the market last month at $1.275 million and within a day had two offers. It sold for higher than the asking price.
• In Webster Groves, first-time buyers hoping to purchase a house for $200,000 lost out to multiple offers from other buyers. Also in Webster, a house sold sight unseen for its asking price of $219,900 the day before it officially went on the market.
Bax said sales are strong in all areas, including St. Charles County, the region’s leading submarket in house sales and construction.
Is another housing bubble building in St. Louis? Probably not, Bax said.
The bubble that began a decade ago was a result of easy mortgages and the unrealistic belief that houses would never decline in value, he said.
“I think now that this is just pent-up demand over the last few years by buyers and now the sellers are realizing they can push the limit,” Bax said.
Steve Breihan, an agent in Berkshire Hathaway’s Clayton office, said much of the metro area has become a seller’s market. He provided the example of a buyer with a $450,000 budget and willingness to pay above the asking price for a house off Carman Road in west St. Louis County. He came in second to a buyer who offered cash, thereby avoiding an appraisal, and even waived a home inspection.
“This buyer pulled out all the stops and, consequently, got the house,” Breihan said.
Homebuilding has slowed from the go-go days of a decade ago and is limited largely to St. Charles County, he said. Elsewhere in the region, building sites are limited, especially in inner-ring suburbs.
The Metro East is part of the healthy market. February sales in St. Clair County grew by 23 percent — to 182 — from a year earlier, according to the Realtor Association of Southwestern Illinois. Median prices rose between 10 percent and 27 percent in St. Clair, Monroe and Clinton counties. March figures are not yet available.
Doug Payne, the association’s president, said the mild winter and buyer demand are helping sales this year.
“These positive factors coupled with the continuation of low interest rates provide a great time for current homeowners to think about moving up, listing their homes for sale and tapping into pent-up buyer demand,” he said.
According to Freddie Mac, the average rate for a 30-year, conventional, fixed-rate mortgage was 3.59 percent this week — the lowest since February 2015.
Home construction remains nearly flat, however. Permits for single-family homes rose 3 percent in February in the Missouri portion of the metro area, according to the Home Builders Association of St. Louis & Eastern Missouri.
Kim Hibbs, the association’s president, said he expects the upward trend to continue this year.
“This is good news because new homes contribute not only to the tax base and employment but new homeowners spend thousands in the local community after a purchase on furniture, landscaping and other items,” he said.
Nationwide, pending home sales — in which a sales contract has been signed, but the deal has not yet closed — rose in February to their highest level in seven months and remained higher than a year ago, the National Association of Realtors reported this week. Regions led by the Midwest had increased contract activity, the association said.
The group’s pending home sales index, a forward-looking indicator based on contract signings, rose 3.5 percent in February and was 0.7 percent above February 2015. Lawrence Yun, NAR’s chief economist, said pending sales in February rose to the highest index reading since July.
“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers,” he said. “Without adequate supply, sales will likely plateau.”
NAR forecast that U.S. existing-home sales this year will increase 2.4 percent, to about 5.38 million. In 2015, existing-home sales rose 6.3 percent and prices rose 6.8 percent.
On the downside, existing-home sales fell 7.1 percent in February as a result of persistently low inventories and price rises in parts of the country, NAR said. Yun said the sales decline was tempered by price appreciation that lessened to 4.4 percent, which was still above wage growth but more favorable than the 8.1 percent annual increase in January.
“Any further moderation in prices would be a welcome development this spring,” Yun said. “Particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition.”
AFFORDABILITY HELPS AREA
Affordability is a factor that put St. Louis on a top 10 list for 2016. In December, realtor.com ranked St. Louis second, behind Providence, R.I., as a top housing market to watch. Jonathan Smoke, realtor.com’s chief economist, said some top markets — San Diego and Boston — are also among the priciest.
Some markets — including Providence, New Orleans and St. Louis — are experiencing real estate recoveries based on better economic conditions forecast for 2016, Smoke said.
The St. Louis Association of Realtors cited his finding in reporting sales figures for February. Sandy Hancock, the group’s president, said factors in Smoke’s prediction are median sales price and the days a house remains on the market unsold.
February Multiple Listing Service figures for St. Louis and St. Louis County showed that the year-over-year median home price rose 6 percent, to $148,000. Days on the market dropped from 170 in February 2015 to 114 this year.
“These two indicators alone mean that whether you’re interested in buying or selling a home in St. Louis this year, you should know that homes are selling faster now, and prices continue to rise,” Hancock said.
Mid America Regional Information Systems data for its St. Louis region, an area that includes St. Louis, St. Charles, Jefferson and Franklin counties and St. Louis, showed 6,102 homes for sale in February, compared with 6,052 the previous year.
The value for homes sold in February breaks down to 62 percent sold for $199,900 or less, 25 percent sold between $200,000 and $499,999 and 13 percent sold for $500,000 or more.
John Gormley, chief executive of the St. Louis Association of Realtors, said the area remains affordable, noting that more 60 percent of February sales were for less than $200,000.
MARIS figures also showed the area’s housing inventory edged up in February to six months, compared with 5.9 months in February 2015. Economists consider 6.5 months of housing inventory healthy balance of supply and demand.
“What we are seeing here is an uncommon combination of factors that give credence to St. Louis being designated as one of the hottest real estate markets in the country,” Gormley said.
If the national economy remains strong and mortgage rates stay low, St. Louis could have one of the best years for home sales since 2007, he said.