St. Louis Housing Report ~ Sales Trends 2001-2010 (Part 1)

by Karen Goodman on February 2, 2011

How is the St. Louis housing market?

I get this question a lot. Over the next few days, I’ll be publishing several reports to answer that question.

Today’s charts come courtesy of Brian Copeland. Brian wanted to compare how a number of nearby cities were doing and he asked me to run the numbers for St. Louis. In return, he put together these charts for me.

NOTE: Brian wanted to compare cities as closely as possible, so he asked me to not include the outer ring suburbs. As a result, the charts below are based on sales in St. Louis City and St. Louis County only. Click on the charts to make them larger.

1511 320x240 sfh volume and avg sp 2001 2010 St. Louis Housing Report ~ Sales Trends 2001 2010 (Part 1)

1510 320x240 condos volume and avg sp 2001 2010 St. Louis Housing Report ~ Sales Trends 2001 2010 (Part 1)

Highlights:

Single Family Homes:

While the number of single family homes sold each year has been dropping since 2006, the number of sales dropped dramatically in 2010. With 18,960 homes sold in the peak year (2004) and only 11,784 homes sold in 2010, it isn’t surprising that only the most aggressively priced sellers had offers.

At the same time, the average sale price increased for single family homes last year from $168,829 (2009) to $181,574 (2010).

Why are prices going up when fewer homes are selling?

Just because the average sale price went up, doesn’t mean that the value of your home went up.

My guess is that there were more current homeowners who decided to buy a more expensive home last year compared to the prior few years. The housing market became heavily weighted towards 1st time home buyers ever since the federal government established the housing tax credit for 1st time buyers in April 2008.

In November 2009, the tax credit was expanded to include some current homeowners, and that sent many people with bigger budgets in search of a new home. Then, the tax credit expired on 4/30/10. After 2 years of tax credits available for 1st time buyers, the number of 1st time buyers buying property dropped dramatically on May 1.

With fewer entry-level budget buyers purchasing homes, the average sale price was bound to increase.

Condos:

St. Louis condo sales followed the same trends as single family homes over the last 10 years. However, less than 1,700 condos sold last year compared to almost 12,000 homes.

With less than 1 in 10 buyers choosing a condo over a single family home, the only condos that sold were the ones that were priced the most aggressively.

One significant difference between single family homes and condos worth noting is when the market peaked. While both single family homes and condos had the highest average sale price in 2007, there was a big difference in sales volume. Home sales peaked in 2004 while condos sales were at their highest levels in 2006.

Final Thoughts:

Homes were definitely selling last year, but only the most motivated sellers who priced their homes appropriately got offers. The rest ended up either in foreclosure, leasing out the home, or deciding not to move.