What's the State of the St. Louis Real Estate Market....I know!

STATE OF THE MARKET
SEPTEMBER 1, 2007
ENTIRE ST. LOUIS MARKETPLACE

No offense, National Media. I know the bad housing market makes a great story, but hey St. Louisians, what you need to know about Real Estate is that ALL REAL ESTATE IS LOCAL.

What does that mean? It means you need to know about the real market in your area, not nationally. How is St. Louis doing? More importantly, how are the areas where you live specifically doing? Then you'll know if it's a bad market or a good market or a so-so market.

Either way, the market is the market. No matter how it is, if you have to buy or sell, this is the market you are dealing with. So you need to be educated so you can make intelligent decisions to win at this market whether you are a buyer or a seller.

So here we go. First of all, this report is about the entire St. Louis area from the arch to far north, far south and far west...here's how St. Louis looks.The bad news (that's what you've been hearing) is that overall, the number of home sales is down by about 13%. In 2006, 21,312 homes were sold in St. Louis. In 2007, thus far that number is 18,698. So we realtors are selling less houses...bummer for us. But more sellers are either electing to stay out of the market, or perhaps their homes aren't selling (hmmm, thjat would be another interest idea...how many houses aren't selling in the 2007 marketplace...I'll blog on that another day) but I digress.

The other bad news, days on market are up 16%. In 2006 it took approximately 70 days on average for a house to sell in St. Louis, which by the way, is still a pretty good number...only 2.3 months to sell your home. Now in 2007, it's up 16% which sounds bad, but in reality...it's only another 11 days...which is still under 3 months! So be patient...your house will sell, just not as fast as in the good ole days This is not a microwave housing market...pop it on the market, it's done. This is a slow roaster marketplace. It will sell in due time and I'll tell you how in a minute.

Now, finally the good news!!! Guess what...you never hear this anywhere but the average sales prices are actually UP overall....by 4%! That's great news for St. Louis. Maybe that's why Forbes said we are in the top 5 of all Seller's markets in the nation. Specifically, they said St. Louis was #5. Now, personally as a Realtor working this market day in and day out I don't buy that. This is not a Seller’s Market, it’s clearly a Buyer’s Market. Or if we are one of the best markets in the nation, then it is really bad out there. Because, if you're a seller, this still feels like a pretty stinky market to you and I feel your pain. This is no fun for anyone.

Ok, back to the good news. So prices are up...isn't that the bottom line that you Sellers really care about anyway? Prices on average in St. Louis were $190,873 in 2006 and now in 2007 they are averaging $198,644...so that's a 4% increase over 2006. Mind you 2006 was a pretty hard year too, but forget about 2005. Forget about the sales prices in good old days, forget about what your neighbor got for his house in 2005...those days are gone. Long gone! Accept it sellers! Denial doesn't help you and prolongs your pain in getting that all important contract on your home.

Ok, so you are a seller. How do you become one of the lucky ones who gets the contract? How do you get part of that small bit of price appreciation over the 2006 marketplace? Well, drum roll please....here it is:The old adage is price, condition and location. Well, location is a fixed component. Whatever location you have, you have. That's what you have to deal with. So that leaves price and condition. Those are your factors to bring you success. And you the Seller have control over both of those things. So if your house isn’t selling, stop complaining about your realtor or the market and take a look in the mirror…or at your house and your price.

Have you priced it competitively? Does it show the best in the marketplace? If not, that’s why you are not selling. The ones that do those 2 things, they ARE selling! In this tough market, the houses that show the best and are priced the best---win. It’s as simple as that. It’s still Real Estate 101.

If you choose a price that is higher than the market, you'll lose. When you look at your price band compared to others houses you are competing against, you need to be priced in the lowest 30% of that overall price band to get a contract. Plus your condition has to be in the best 30% of all the houses you are competing against. If you are in the lowest 30% on pricing and the top 30% on condition then you are IN the market and you'll sell. If you are in the highest 70% of pricing and the lowest 70% of conditon, then your ON the market and you won't sell till you change one or both of those factors.

There is a big distinction. You want to be in the market, not on the market. On the market homes are sitting there not selling. They don't show well, they have old wallpaper, old kitchens and baths, they haven't been updated in last 10 years, they have the old carpet, maybe there is a tell-tale pet smell, or just a tired appearance. Buyers aren't jumping off their couches (where they are pretty happy to be right now) to get a tired and average house. That doesn't inspire them. That doesn't emotionally make them fall in love with that house and right now we need them inspired.

So stage your house. Clean it up. Declutter it. Freshen it up. Paint it up. Pull down wallpaper. Add some new landscaping and mulch. If you are not willing to do what it takes to improve the condition, then you better price it as a wholesale house on sale at a great discounted value because that’s how the market see it, not with a retail price. Retail prices are for houses that show great!

If you are a Seller whose house shows great, great! You are halfway to sold. Now all you have to do is price it to sell. Next trap, if you say my house shows so much better than everyone else's then I'll just jack the price up to the max, then you're going to lose too. Remember house sales are down, that means less buyers. Less buyers with more housing inventory means those buyers have lots of choices and they want a good value.

Price Matters. If you are the most expensive property in your price band, unless they totally love you, they'll keep shopping. And Buyers as I’ve said have lots of choices...lots & lots of choices. If they feel you are overpriced, they won't make an offer. They will move on, looking for the best value and you may not get them back. You get one shot in this market. Make it compelling!So price it right. Price it to be in the market, rather than on the market.

If you are an unmotivated seller and you don’t have to sell, then do whatever you want. It’s your house and your time, except that it can also waste everyone else's time frustrating buyers, other realtors and your realtor who is working hard to get your home sold with an overpriced listing. Realtors can't make the market pay what you want.

So here's the key to winning the game of real estate right now. Price it right and make it show the best in class!. Your house needs to be one of the Top 3 that shows the best in your competition and it needs to be priced as one of the best values to get that all important contract. Good luck. And if you need a Realtor, call me!

If you would like to know specifics on how the market looks in your city or town, e-mail The Anne Dunajcik Group at info@stlouishome.com and we'll do the research and get back to you and post it on our web site and blog too. Just remember ALL REAL ESTATE IS LOCAL!

Anne :-=)

Pricing in the Midwest down 2.2%

Ok, the bad news is that the Midwest...that's us in St. Louis too...home sales dropped 8.4%...that's why there is so much inventory and that's why it's taking so much longer for homes to sell...the other factor that is bad is that prices have dropped 2.2% in the midwest...so that's not good...

however, if you take the long-term view of home pricing like you do your stocks...overall you are still way up what you paid for your house (unless you bought it just a few years ago). Homes in our area have been appreciating and appreciating, so most of you still should not have to bring money to the closing table and things are picking up. Houses are still selling, it just takes a while. So cheer up, it's getting better sellers. We'll get there. It might still take a little bit longer due to the recent lender issues, but we'll get there. St. Louis is a relatively stable market and that's a great thing. Because we didn't have the crazy upswings of a California or a Florida, we also haven't experienced the crazy downswings. Slow and steady...that's St. Louis.

Tomorrow, I'll do a specific analysis on pricing in the St. Louis area and we'll take a look at the facts!

Anne :-)

Second-Quarter Metro Homes Prices Improving But Sales Down in Most States
WASHINGTON, August 15, 2007 -
Home price trends are improving in metropolitan areas but existing-home sales during the second quarter were below a year ago in most states, according to the latest quarterly survey by the National Association of Realtors.

In the second quarter, 97 out of 149 metropolitan statistical areas 1 show year-over-year increases in median existing single-family home prices, including nine areas with double-digit annual gains; 50 had price declines; and two were unchanged. In the first quarter of 2007, revised data shows 83 areas had annual price increases, while in the fourth quarter of 2006 only 68 areas were up.

Lawrence Yun, NAR senior economist, said the price trends are encouraging. “Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006,” he said. “Recent mortgage disruptions will hold back sales temporarily, but the fundamental momentum clearly suggests stabilizing price trends in many local markets.”

Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate2 of 5.91 million units in the second quarter, down 10.8 percent from a 6.63 million-unit pace in the second quarter of 2006. Six states showed increases in the sales pace from a year ago; one was unchanged and complete data for two states were not available.
The national median existing single-family home price was $223,800 in the second quarter, down 1.5 percent from the second quarter of 2006 when the median price was $227,100. The median is a typical market price where half of the homes sold for more and half sold for less, but there has been a downward skew in the national comparison because sales have declined in many high-cost areas and risen in some lower cost markets.

“Since all real estate is local, this report on metro area home prices is more meaningful than our monthly data on national prices because metro areas are less subject to price distortion that can result from geographic changes in the composition of sales,” Yun said.

NAR President Pat V. Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, explained how homes are holding their value. “Unlike stocks, where significant equity can vaporize overnight, there is little volatility in home prices, and most homeowners are experiencing very healthy long-term gains,” she said.

“The costs of construction trends up from one year to the next, so even in areas that experience price declines, owners who maintain their property generally retain most of the equity that has built-up in their homes over time.”

A separate NAR survey shows the typical owner stays in a home for six years. “While local conditions vary greatly, a typical owner who bought six years ago is seeing a 45 percent increase in the value of their home. Even so, it isn’t valid to directly compare homeownership with stocks. Although a home is normally a long-term appreciating asset, it is primarily shelter – most owners sell when their needs change, not when the market turns,” Combs said.

An analysis of all available data over the past six years shows almost every market experienced price gains from the second quarter of 2001 to the second quarter of this year.

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 6.37 percent in the second quarter, up from 6.22 percent in the first quarter; the rate was 6.60 percent in the second quarter of 2006.


In the Midwest, total existing-home sales dropped 8.4 percent to a 1.39 million-unit annual level in the second quarter compared with a year ago. The median existing single-family home price in the Midwest was $163,500, down 2.2 percent from the second quarter of 2006.

Lender Implosion! Buyer beware!

Did You Know… 116 Mortgage Lenders have imploded since late 2006.
(Source: www.LenderImplode.com 8-10-07) It’s sad to say, but this number increases almost EVERY day! It was 112 last Friday.

So… What’s causing these Lenders to tighten up their guidelines or even close their doors? Watch this video for your answer so you’ll know what to say when your client’s ask you. http://www.mortgagemarketguide.com/suewoodard/20070807/cnbc.asx


Now that you have watched the video and checked out www.LenderImplode.com it proves, now more than ever, your client’s credit score makes an enormous difference to the types and terms they will qualify for, if they qualify at all.


Buyers
- Work with a professional, AND make sure they are employed by a solid company. An internet lender or small “mom and pop” broker will typically be a greater risk because they normally don’t fund their own loans. Therefore they are subject to greater uncertainty with investors changing guidelines frequently.
- Find out exactly what program your client is going to use. If it’s an “Agency” loan (Fannie Mae, Freddie Mac, FHA, or VA) those are less likely to kill a deal due to guideline changes.
- Anything that is an “Alt-A Loan” (Stated Income, Stated Asset, No Doc, etc…) or Sub-Prime (credit issues) with a high LTV (over 80%) is subject to change, even after the loan is locked.
- If the loan isn’t a “slam-dunk” loan (high credit score, full document, with money down) ask for a “Loan Commitment” (subject to property) verses a “Pre-Approval.” A lender can “Credit Approve” (credit, income, debts, reserves, etc…) the client ahead of time without a specific property. Once a contract is written then issue a Full Loan Commitment for that property.
- Try to close within 30 days when possible. The longer it is before the closing date the more time available for guideline changes.
- Keep and eye on www.LenderImplode.com. Not only does it tell you which companies have gone out of business, it also shows you who’s about to.

If you need help choosing..call me!

Why I love Keller Williams...KW Cares! It's real!

I'm pretty new to Keller Williams. Our office in Kirkwood is just 1 year old. We opened our doors last year in 2006, but already we've grown to over 100 agents strong and we were in the Top 10 of ALL St. Louis real estate offices...Can you believe that...in just 1 year..And we are just getting started. Across the country Keller Williams has grown to the be the 4th largest real estate company with over 75,000 agents. But in St. Louis, we can sometimes be Keller Who? but we are quickly building a reputation of quality agents that care. But our agents don't just care about our clients. We care for each other. Keller Williams motto is God first, Family Second and then Business. But it's not just talk. We really do care for our own.

When hurricane Katrina happened..the entire National Association of Realtors raised $5.8 Million and that's terrific and makes me proud to be a realtor. But what is even more astounding, our company Keller Williams raised $5.3 in a company at that time of just 55,000 realtors. We raised almost as much as the ENTIRE real estate community. That's putting your money where your mouth is.

But even closed to home here is St. Louis, we gave back to our own. Please go to my website www.stlouishome.com click on the You Tube button and watch the Share the Light video.

I think you'll be touched and inspired. I won't spoil the story blogging about it...just watch it...

Anyway, that's who we are at Keller Williams. I'm blessed to be here. The water's different at Keller Williams! I like it.

People that care! People that take the time to love others. How refreshing. And isn't that just what we all should be doing anyway? So take some time and love someone today!

Anne
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AUSTIN, TEXAS (Jan. 24, 2006) — In a concerted effort to help its Gulf States market centers recover from Hurricane Katrina, Keller Williams Realty Inc. and its public charity, Keller Williams Realty Cares (KW Cares) has raised $5.3 Million.

The amount is not far behind the collective fundraising efforts of the National Association of REALTORS®, which has raised $5.8 million for hurricane relief.
Keller Williams Realty Vice Chairman Mo Anderson says Keller Williams Realty’s giving culture has enabled the real estate franchise operation to “respond meaningfully” to its associates in need. As of the end of the year, donations from Keller Williams Realty’s 57,000-plus associates and the company’s 500-plus market centers across the United States and Canada – earmarking 10 percent of their profits to KW Cares, had totaled $5.3 Million.

“We are making history in real estate with KW Cares, which has been supporting our associates in times of extreme hardship since 2003,” Anderson says. “At Keller Williams Realty, we believe you have to give to get, and we were determined to surpass our goal of raising $5 million for our Gulf States associates.”

In addition to the fundraising campaign, KW Cares launched a long-term relief program called Heart 2 Heart, which is helping more than 700 Keller Williams Realty associates rebuild their lives and businesses. The adoption program enables volunteer Keller Williams Realty market centers in other regions to assist specific Gulf States associates impacted by Hurricane Katrina.

Susan Spencer, owner of the Keller Williams Advantage Olney/Rockville Market Center in Maryland, says her family is limiting their gift-giving this holiday season and spending the difference on a Gulf States Keller Williams Realty family that she and another Maryland market center adopted through the Heart 2 Heart program. Spencer, who joined Keller Williams Realty as a prospective owner this past May, says the company’s teamwork-oriented culture attracted her to Keller Williams Realty.
“You don’t particularly find that in real estate; it’s typically every man and woman for themselves,” Spencer says. “But at Keller Williams, it’s about people helping people – and that applies both professionally and personally.”

Keller Williams Realty associate Patricia Peyton of Metairie, La., knows firsthand the impact of KW Cares’ Heart 2 Heart program. After losing everything to Katrina, Peyton’s adoptive market center in California – together with some Keller Williams Realty associates in North Carolina – rallied to personally deliver new furniture, equipment and appliances for her home and office, as well as an SUV.
“To know that you have a company like this behind you is so comforting,” Peyton says. “What I really think is so beautiful is how everybody in this company came together. When we call it family, it really is a family. Agents from all over the country really stood behind us. You could really feel the caring. That’s why they call it KW Cares.”

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About Keller Williams Realty Cares
Founded in 2003, Keller Williams Realty Cares (KW Cares) is a federally qualified 501(c)3 public charity created to support Keller Williams Realty associates and their families in times of extreme hardship. It is the heart of the Keller Williams Realty culture in action – finding and serving the higher purpose of business through charitable giving in the communities where Keller Williams Realty associates live and work. The charity gives 100 percent of the donations to Keller Williams Realty family members in need and charities that are aligned with the mission and values of Keller Williams Realty and KW Cares. Keller Williams Realty International, the franchise operation’s headquarters, covers the charity’s administrative costs. For more information, visit KW Cares at (www.kwcares.org).

I've heard the market's bad, but I've decided not to particpate

Dear Abbey? Dear Ann Landers? No, Dear Anne/your St Louis go to girl for real estate

hello blogger fans...this is your St. Louis blogging site for all things real estate and for all things St. Louis...so feel free to use me as your Dear Abby or Dear Ann Landers...but actually it will be just Dear Anne. I've been a top selling realtor for 22 years in St. Louis...yes I know...I'm getting old...but hey after all this time I've probably seen and experienced it all in my 22 years and plus now I've got wisdom...so feel free to ask me questions and pick my brains about anything and everything related to St. Louis real estate and I'll do my best to be your go to girl for answers...

Your Dear Anne

How is St. Louis weathering the foreclosure storm?

Not too good, Not too bad overall. How's that for waffling?

Given how big St. Louis is, our foreclosure rate isn't too bad...unless you were the one that got foreclosed on. :-(

The St. Louis metropolitan area, though not immune to the headline-grabbing sub-prime mortgage meltdown, is weathering the storm better than most. While we are the 18th largest metropolitan area in the country, the 2007 Midyear Metropolitan Foreclosure Market Report™ from RealtyTrac places St. Louis 58th on its list measuring foreclosure rates in the 100 largest metropolitan areas.

"This report clearly demonstrates that not all local housing markets are flooded with foreclosures," said James J. Saccacio, chief executive officer of RealtyTrac. In the first half of 2007, one in 151 (0.6%) of home mortgages in the St. Louis were foreclosed on. Compare that with Detroit, which had a foreclosure rate of one in 29 (3.4%).

Our area has remained relatively stable despite the disconcerting numbers and news accounts. Buyers will continue to be able to borrow money with confidence as long as experienced companies remain steadfast in securing stable, fair products for their clients.

Countrywide...The reports of my death have been greatly exaggerated.

Mark Twain once said the now famous quote:

The reports of my death have been greatly exaggerated.

I think the reports of Countrywide's death have been greatly exaggerated too. Although they are in tough times, I think they'll weather the storm and hang on to live another day. They are too big to let them fall. Remember Chrysler bail-out in 1983...Chrysler has lived to see another day...Countrywide will too...that doesn't mean lenders shouldn't get back to the basics, back to the fundamentals. When you forget the fundamentals of a game, you lose. That's what is happening to lenders. They forgot the fundamentals. They made anybody a loan anytime and now it's coming back to bite them. This isn't a fun time for home buyers, home sellers, realtors or lenders...but for the long-run, it will be good that the mortgage (whoever's is left) will get back to the basics and make quality loans and then can all get back to a better housing market with realistic sellers and strong, qualified buyers and happy endings. The good news is that because of Countrywide, the Fed finally cut rates...so it's not all bad news!

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THE RATINGS GAME: Countrywide Upgraded As Analysts Say Lender Can Weather The Storm

August 17, 2007: 11:58 AM EST

BOSTON (Dow Jones) -- An analyst at Banc of America Securities upgraded shares of troubled mortgage lender Countrywide Financial Corp. to neutral from sell Friday, saying that tapping its $11.5 billion credit facility should provide Countrywide the time needed to address liquidity and capital concerns.

In a research note, however, analyst Robert Lacoursiere cut his price target on the stock to $21 from $31. Shares of Countrywide (CFC) , the largest U.S. mortgage lender, closed Thursday off 11% at $18.95 after it said it borrowed $ 11.5 billion from a group of 40 banks due to problems finding money in credit markets. To reduce its reliance on credit markets further, the company said that it would try to originate nearly all mortgages through its banking operation.

Lacoursiere said the upgrade doesn't reflect any shift in his bearish stance on the residential mortgage market. Instead, the stock price "fairly balances the probability of a conservative worst-case outcome of a liquidity induced distressed asset/breakup sale valued $7.25 against the prospect of a smaller and much less profitable company that we would value at $23.50 today."

Although Lacoursiere warned that "sizable risks remain," he said Countrywide's use of its credit line gives the company breathing room. "As a result we think the possibility of a liquidity induced distressed sale [is] unlikely," the analyst wrote.

Still, the company faces headwinds such as higher financing costs, slipping fundamentals and credit pressures, and Lacoursiere slashed his per-share profit estimates for this year and 2008. "Seeing the potential for a volatile saw- toothed performance as the market reassesses risk and confronts multiple quarters of poor results against deteriorating fundamentals, we do not see this as an opportunity to build a position," he said.

Credit agencies have already lowered their ratings on Countrywide's debt. The uncertainty surrounding the company's future highlights how far the pain that started in subprime mortgages has spread into other home loans that were seen as more secure.

Housing prices are down in many areas of the country, and more borrowers are defaulting as their mortgage rates rise. Several mortgage lenders have gone out of business or stopped originating new loans as sources of short-term financing have dried up. In response to the trouble in credit markets, the Federal Reserve on Friday said it has cut the discount rate to 5.75% from 6.25%.

The stock market rallied in response to the Fed's rare move as Countrywide's share gained more than 18% at $22.50 Friday morning.

Earlier this week, the stock plunged after Merrill Lynch analyst Kenneth Bruce downgraded the shares to sell from buy.

"We fear that the acceleration of margin calls and forced asset sales in the capital markets could lead to more problems for Countrywide to finance its mortgage operations," Bruce wrote in a note to clients Wednesday.

"Should a liquidity event occur, for which the likelihood is increasing, Countrywide shares would probably witness further selling pressure," he said.

Morningstar analyst Erin Swanson in a Thursday note took a more cautiously optimistic tone. After reviewing Countrywide's financial position, "we believe the chances of bankruptcy are remote and the firm will be able to operate through the current liquidity squeeze," the analyst said.

Although the company is facing "unprecedented disruptions" in the mortgage market and won't be able to completely sidestep the near-term pressure, "any earnings hit will not destroy significant value," Swanson said.

"The waters ahead are choppy, and market fear is not subsiding," the analyst said. "However, we contend that as the best-positioned mortgage originator, Countrywide is highly undervalued right now."

"Although the situation is currently dire, we think Countrywide's strategy leaves the company viable over the long term," added analysts at Fix-Pitt Kelton in a report Friday. "Essentially Countrywide is walking away from market-based financing and moving to a more stable source of financing at the bank."

Meanwhile, some are backing the "too big to fail" argument.

"In our view, the odds favor having the government save Countrywide rather than letting it fail," said Stanford Group in a note Friday. "The disruption to the economy would simply be too great."

Lender Implode Meter!

With the “Lender Implode” (lenderimplode.com) meter currently at 128 this week (was at 116 last Friday), and with drastic changes in the Sub-Prime and Alt-A market, what are the options for you “credit challenged” buyers? I’ll give you a hint, there are two answers, and both have 3 initials.

Give up?

FHA and PMI are the answers you’re looking for.

Here’s the scoop…

FHA: In the past, many people viewed FHA contracts as a pain due to stricter appraisal guidelines and Underwriting criteria. Well a lot of that has changed; actually it changed back on 12/19/05.

FHA terms allow for some credit challenges, somewhat weak credit scores or no score, and little down payment (3%).

PMI: In years past PMI was a “four letter” word, but the days of the 80/20 combo loans are all but gone. People used to do this type of transaction to avoid PMI, but today you will see it more and more. Here is why it’s not necessarily a bad thing.

*PMI on loans originated in 2007 are now tax deductible in 2007 if you make under $100,000
a year. This is new as of this year.

*PMI can be dropped in the future, without refinancing, as long as there is 20% equity and the client has no late payments on the mortgage. While an 80/20 was typically refinanced a few years later incurring additional closing costs and starting over at 30 years, again.

*A client with credit issues is much more likely to have their loan approved if it has PMI because the lender is protected by the PMI Company against a loss.

*Lender Paid Mortgage Insurance (LPMI), is now available for those that qualify. There is no monthly PMI paid by the client at all, and this option is cheaper than the 80/20 combo loan.