Posted by belsner under Homeowner
Sometimes the experts who project trends in residential housing and real estate find that they have to correct their predictions. Once the final statistics are in, if they consistently reveal errors as wide of the mark as 50%, it’s just embarrassing. Such was recently the case with Harvard’s LIRA remodeling project—and for those of us who represent buyers and sellers in the St. Louis home market, the resulting revisions were meaningful.
Harvard’s Joint Center for Housing Studies’ statistical barometer for home improvement activity is known as “LIRA”—its Leading Indicator of Remodeling Activity. And as their research analyst Abbe Will wrote recently, it had become evident that “the quality and reliability of the LIRA’s benchmark data series declined markedly.”
When your benchmarks are no longer meaningful, there is only one thing to do: it’s called “re-benchmarking.” In this case, it caused JCHS to overhaul the very activities that it was attempting to measure. Instead of just projecting home improvement spending alone, the new “re-benchmarked” LIRA is broader. It adds maintenance and repair spending to remodeling activity.
What do the new findings augur for St. Louis’s home market prospects? First good news: it looks as if the new projections should be much more reliable. And the graphs reveal a strong surge in national remodeling spending—not only for the remainder of this year, but for well into 2017. When remodeling spending is strong, real estate values (and prices) rise, too. For St. Louis homeowners, the addition of the right kind of improvements is one way to bump up the value prospective buyers see a property.
One feature that St. Louis’s luxury homes share is a well-planned, open kitchen. Where that is precluded by structural elements, one work-around is the addition of new appliances with a contemporary look. Stainless steel ovens and refrigerators have a way of creating a “luxury home feeling”—even when the spaces they occupy are relatively modest.
Another feature that signals opulence is at least one luxury bathroom. Spa-style baths can go far in that direction—and the resulting photography can add major eye-appeal to a listing. More modest improvements like changing out faucets for brushed nickel or other metal finishes (not gold, please!) can make outsized differences. Add fluffy new towels, and perhaps a scented candle—and the formerly so-so bathroom can become a mind-changer.
With LIRA’s home improvement activity projected to strengthen more than 8% this year—and promising further acceleration into next (to nearly $325 billion!)—it demonstrates the faith that consumers across the nation have in the growing value of their home investments.
If you are evaluating the merits of various possible improvements for your home, I hope you won’t hesitate to give me a call. I’ll be glad to offer some incisive feedback on the preferences we have discovered with today’s St. Louis buyers!
Posted by belsner under Market Trends/News
You don’t have to be planning to add your own home to the St. Louis listings to be curious about how it would do if it were up for sale. If you are considering a change of residences, it’s twice as likely that you have been checking out the latest listings in St. Louis to see what comparable properties are asking, which are already under contract, and which have been listed for the longest times…
Most important in the interest any listing elicits is the photography—combined with the Big Three: Asking Price; Number of Bedrooms; and Number of Bathrooms. But there is also the list of possible amenities—and how each stacks up with buyers across the nation. Some of them seem to attract the most eager buyers, while others seem to draw the most yawns. I’ve done an informal (and definitely unscientific) audit of what the leading commentators have come up with as “least popular” home amenities. Here’s a sampling of the 10 top least exciting contenders:
1. Elevator. Almost every source mentioned this. People don’t want elevators in their homes, except for a small percentage of seniors. This is fortunate, because very few St. Louis listings ever include them.
2. Two toilets in the master bath. Not terribly surprising, but not to be confused with two sinks in the master bath, which (at least here in St. Louis) is a definite plus.
3. Cork flooring. Cork has excellent thermal and acoustical qualities. It’s lightweight, warm to the touch, hypoallergenic…but, alas! None of that seems to matter. Unpopular, apparently.
4. Wet bar. This could have some connection to the next:
5. Wine cellar. The vintage wine storage problem is, apparently, not high on most folks’ gotta-have-it lists.
6. Daycare center nearby. This is a surprise—you’d think it would be a strong positive for professionals with little ones. Perhaps this is a reaction to negative news stories about daycare centers in places other than St. Louis…or perhaps, since other properties are within the same “nearby” radius, it’s just not enough of a differentiator to make it a listings winner.
7. Two story family room. Although this can be a delightful architectural feature, to some buyers it might hint at would-be grandeur that could make a family room less cozy.
8. Two-story foyer. Ditto.
9. Laminate countertop. Not surprising: stone seems to rule the roost in countertop mentions (as it has for years). One commentator found that Gen Xers “hold laminate countertops in the same disregard” that their elders hold for next-door baseball or soccer fields.
10. Pet washing station. Sorry Fido; looks like it’s off to the groomer for you.
There they are—but if your own St. Louis home has one or more of these attributes, never fear…we’re experts at coming up with creative approaches for marketing them in new and exciting ways. Give me a call when it’s time to start creating your listing!
It’s probably just an inevitable part of the human condition.
For almost everyone, awaiting any St. Louis home inspection is pure, unadulterated jitters time. Nail-biting time. Edge-of-your-seat time.
It isn’t because anyone seriously expects any of our St. Louis home inspectors to be ogres. Certainly the inspectors I recommend are uniformly courteous, professional, and quite empathetic. They should be empathetic, because of the situation—which consists of a buyer standing by, ready to become the proud owner of seller’s St. Louis dream house. With only the home inspection remaining to be conducted…
In other words, the inspector is asked to perform a professional service, the purpose of which is to uncover any previously unknown defects.
Potentially derailing the otherwise blissful scenario of uniting of buyer with house.
That is why, in the backs of both seller’s and buyers’ minds, there is usually some form of this scenario: the seller is in the act of dropping the front door keys into the outstretched hand of the buyer, only to have the home inspector snatch them out of the air. Caved-in roof has suddenly materialized; termite-infested inner walls discovered; fireplace housing found to actually be made of strawberry jello (all right, I made that one up). The point is, if you have house-hunted extensively to little avail—then finally found THE place of your dreams, you really really don’t want your St. Louis home inspection to turn up any bad news. Ditto if it’s your home about to be sold. With the additional factor that if some defect turns up that you knew nothing about, you still could wind up looking like a jerk…
Given the tension and anxiety involved with the profession, it’s just short of miraculous that our home inspectors aren’t all fighting peptic ulcers. The reason is probably because, when all is said and done, performing a thorough home inspection is a high-skill accomplishment—one of great value to both buyer and seller.
For the seller, the home inspection ritual is an exercise that bolsters the buyer’s confidence in the wisdom of such a momentous transaction. Without it, who knows how many homes would not change hands as readily? For the buyer, even when no defects are discovered (as is often the case), the home inspection report serves as an invaluable handbook, filled with useful details about the nature and status of the residence’s structure and systems.
Some agents believe they should spare jittery home buying clients a nerve-wracking experience by counseling them to stay away during the actual home inspection. However, accompanying the inspector is a valuable way to get in-depth knowledge about the workings of their new residence. Plus—there’s no better way to get over those jitters than to acquaint yourself with the real value you are about to acquire.
Having an experienced St. Louis agent on your team is an excellent way to prevent any jitters from developing in your home buying process—another good reason to call me!
Posted by belsner under Buyer
If you are a house hunter who isn’t reluctant to dig in and roll up your sleeves, it could be worth your while to take a look at St. Louis “bank-owned” offerings. Deciding to do that is less popular than you’d think.
Bank-owned is a word that can summon up all sorts of negative connotations, causing even people who usually think of themselves as unemotional to hang back. Like “REO” (short for real estate-owned, a synonym for bank-owned), it is applied to St. Louis homes whose ownership has been reclaimed by the lender. Foreclosures and real estate auctions that follow are never jolly circumstances, so many don’t even consider looking at the subject residences.
It is partly because of the inauspicious histories that such properties can carry with them that the majority of St. Louis home seekers automatically shy away. Yet it can be forcefully argued that, especially for prospective homeowners who are on the lookout for bargains, the “bank-owned” moniker ought to draw special attention. St. Louis’s bank-owned homes usually take some additional care in how they are examined and purchased, but they can also present value that is worth the extra effort.
Because a bank-owned home is being offered for sale by the lending institution that holds its deed, the precise way any one can be purchased varies depending upon the policies of the company involved. Some of the mythology about homes that have been through foreclosure are not true—for instance, it is not usually true that only cash offers will be considered, or that an auction will be involved (usually that phase has already come and gone).
What IS definitely true is that bank-owned homes have a better-than-average chance of needing some level of rehabilitation. On the other hand, if a bank is selling the property, it’s a safe bet that any cloud on the title (a second or third mortgage or other creditor liens) has been dealt with. It can be the case that a bank comes into possession because of just that kind of problem—and any newly created “freed value” might be had by a new owner at a head-turning discount.
The paths to buying bank-owned St. Louis homes can require patience and an experienced hand at residential negotiations, so if you are considering going after one yourself, be sure to pick a real estate agent with the requisite background. That’s true in any house-hunting endeavor, of course—and a reason I hope you’ll give me a call!
As every college freshman will tell you, it’s those “Introductory” classes that can wind up being the most time-consuming. Since they cover a lot of territory dealing with subjects that are new to you, they can be the hardest to keep up with. If St. Louis real estate had its own college department, its “Introduction to” class might be a lot easier than some of the other departments’—but there would still be a few basics some of the freshmen might need to master before proceeding much further.
When it comes to St. Louis real estate, the equivalent of the freshmen are the first time home buyers. They don’t need a whole class to be prepared to dive in, but they should be aware of some basics. Some financial preparation comes first:
⦁ For openers, find out what your credit report says. If there are mistakes, it takes time to get them corrected, so this is Job One.
⦁ Then, before even starting to discover what properties are available, you should sit down and work out how much you can afford. That will point you toward the portion of St. Louis’s real estate offerings you should spend your time and effort examining. If you do it the other way around, you are too likely to waste time visiting houses that would put too much strain on your budget.
⦁ There are many different kinds of home loans—with differing cost and cash flow implications. The difference between variable and fixed interest rate loans and the difference between down payment percentages will have major impacts on your monthly family operating budget, and what you can comfortably afford. An important part of being an informed buyer is making sure you know what loan types are available—and the financial implications of each.
Then comes the search—the house hunt. If you haven’t already made contact with the St. Louis real estate agent who will help with your search, it’s time to do so. Most of the basics are pretty much common sensical:
⦁ Knowing that sellers pay the Realtor® fee, locate a licensed St. Louis real estate agent with a good reputation, experience in the area, and with whom you can communicate easily: one who “speaks your language.” (Hint: call me!)
⦁ Instead of planning to just go out to “see what’s out there,” first get as clear a picture as possible of what features you know you require. Make a list with both “wants” and “must haves”—and stick with it. Remember that allowing the “wants” to become more important than the “must haves” will usually prove to be a bad idea.
⦁ When you make an offer on the house you’ve been looking for, be sure the contract specifies that you can request repairs or back out of the deal based on the inspection results…and be sure to have that inspection!
If I’m your agent, I’ll be sure to remind you!
If you set your sites on selling your St. Louis home in short order for the best price, one of the most reliable ways to add to your effort is to introduce effective home staging. If you have the requisite artistic flair and some time to devote to the project, you can try your hand at staging your house yourself. Alternatively, you can turn the project over to a professional St. Louis staging company.
And for quite a while now, there is a third alternative.
The importance of good staging is undeniable. It is sometimes called “the gentle art of temporarily redecorating a house”—and it’s a gentle art that’s been found to be an effective adjunct to many a home’s marketing campaign. The National Association of Realtors® research shows that staged homes are on the market for 17 days fewer than comparable non-staged listings (the national average is 14 days vs. 31). Although hiring professional stagers has a cost, it’s often pointed out that it is likely to be less than what a first reduction in selling price would run.
Home staging is said to have gotten its first impetus in the early 1970s, when a student of theater began working in real estate. The stagecraft approach proved effective, and eventually evolved into a professional service that can be offered and many differing levels of involvement—all the way from simply rearranging furniture to emptying a house out and filling it with rented furniture.
One of the most common staging precepts for St. Louis homes is that, since first impressions are so important, it should be completed before MLS photos are taken. That’s where that third staging alternative comes in: it’s strictly for the photos. This is the kind of staging that isn’t even what you might call “real.” It’s virtual.
Yes, the age of virtual staging is now well established. When vacant real estate will make for lifeless, uninspiring pictures, a little “advanced 3D rendering technology” can come to the rescue.
“Digitally furnish any home so it looks its best…all you need are photos or a floor plan” promises one of the leaders in the field. Owners send in photos of empty (or nearly empty) rooms, and the virtual staging company sends back photos decorated with sofas, wall paintings, draperies, beds, dining room tables, chandeliers, carpeting—any number of décor items that add atmosphere and style to the original. Believe it or not, they really look real!
But they aren’t. The argument in favor of this approach is that virtual staging accomplishes what any staging is meant to do: it helps potential buyers imagine how they might choose to decorate a room or household. The price is a fraction of traditional staging (a single room can cost as little as $49), and the turnaround time is a matter of days. The downside is that, whereas the listing photos for a traditionally staged home looks like what prospective buyers experience when they make an in-person visit, the virtually-staged property looks quite different. Unless the buyer has been properly prepared, that could be quite a letdown!
Home staging—virtual and otherwise—is just one example of the many tools available to assist today’s St. Louis home sellers. Give me a call to explore how we can put them to work for you!
For St. Louis real estate watchers, it was The Washington Post that came up with the most interesting angle on last week’s most commented-upon real estate headline—which was that across the U.S., home ownership rates had slipped to 1960s levels.
CNBC went with the straight numbers (“Home ownership rates drop to 63.4%”); while website zerohedge decided on a more attention-grabbing route (“Homeownership Rate Crashes to Lowest Since 1965”).
St. Louis readers whose brows might have been furrowed by zerohedge’s “rate-crashing” spin could have been relieved somewhat had they fled to sites like businessinsider, which added, “but may be bottoming” to the sobering news. Yet it was still The Washington Post that made off with the most interesting exposition. Their take was to zero in on the “why” of falling homeownership numbers with: “All the Reasons It’s So Much Harder to Buy a Home Than It Was for Your Parents.”
Chief among all the reasons The Post found was voiced by Lawrence Yun, who is the National Association of Realtors®’ chief economist. It is, in a word, affordability. As many St. Louis listings reflect, the rebound in residential real estate has meant that asking prices have been rising steadily for some time. “We’ve seen a general rise in the purchase market in wealthier areas and densely populated urban areas,” according to one Boston mortgage exec. “Now the recovery has spread to more rural and up-and-coming areas, too.”
Since The Post headline promised “All the Reasons,” it didn’t stop at affordability. As another economist is quoted, “sales are hitting record highs, prices are growing…but…there’s a chronic inventory shortage.” And NAR’s Yun agrees with that second reason. “People need to focus on the fact that we have a major housing shortage in this country.” More reasons are “income inequality,” which is another way of citing concerns about home prices rising faster than wages; and “rents are up,” which makes saving for a down payment harder for wage earners.
Do all those reasons “it’s so much harder to buy” add up to a coming slump in real estate sales? The jury may be out on that, but the public perception that homeownership is worth pursuing anyway is not. “Most consumers still believe that homeownership is financially worthwhile,” according to The Post, which quotes a 2015 Demand Institute survey. DI found that a full 78% of heads of households agreed—or agreed strongly—that “homeownership is an excellent investment.”
I agree whole-heartedly, of course; and whether your next foray into St. Louis homeownership is as buyer, seller (or both) the odds are excellent that you do, too. All good reasons to give me a call!
Owners of St. Louis homes for sale each have their own individual goal hierarchy. The bottom line is nearly always at—or close to—the top of the list, like everything people sell. But there can be other considerations that rival fetching the largest amount of cash. Some of the St. Louis homes that are for sale are adjacent to family members—or long-time neighbors who are just like family—so another wish might be to hand off to a new owner who seems likely to keep the place in good order.
More commonly, high among target goals is the wish for a speedy resolution. In fact, for some, personal or professional demands warrant that their homes for sale need to be completed as quickly as possible. Where speed is absolutely the overriding objective, the first tactic is also the one most likely to achieve that goal:
Tactic #1: Price it right—right from the start. An asking price that is at or slightly below other comparable St. Louis homes for sale is all but certain to draw immediate attention, more showings, and garner offers sooner than homes that are pegged at premium price levels. This is true across all price ranges, even at the seven-figure estate level. Those who price their homes for sale at a figure that shows they are ready to move have good reason to assume that that the Field of Dreams dictum will hold: “they will come!”
Tactic #2: Update as needed. Where it is prominent, fresh paint, a new fixture or two, and fresh landscaping touches have a good chance of making any home stand out from the pack. If the asking price is reasonable, the object is to be competitive with other St. Louis listings. A home that is desirable from a style and condition standpoint should be among those most likely to get the earliest action.
Tactic #3: Observe the Three “De’s”—Deep Clean, DeClutter, DePersonalize. These are the steps we hear so often from every informed quarter—the steps that make a home “show ready.” True deep cleaning might well involve professional help. We all know how to clean our homes, but a real pro has special tools (and tricks!) that really make a place shine. Decluttering means storing all those items that we usually have around, but which we really don’t need every day. Depersonalizing means stashing the personal artifacts that would otherwise tag a home as emotionally belonging to someone else—anyone other than the wished-for new owner. These three “De’s” can speed any “home for sale” into a “home that’s sold.”
These three tactics are among others that can come into play, but they are arguably the most important where speed is paramount. And there is one more that is vital, too—one that meshes nicely with all the other marketing initiatives:
Tactic #4: Call me!
Posted by belsner under Market Trends/News
The days of boring slideshow type “virtual tours” are disappearing fast. Today’s St. Louis listings can include actual virtual walk-through videos, breathtaking aerial drone shots, and sweeping panoramic 360 degree views. Now it appears there can even be the possibility of James Bond-style suspense.
That’s right—Double-O Seven himself (almost).
While not exactly typical of listings here in St. Louis or (to be fair) anywhere else, the marketing employed by some Tiburon, California listing agents is creative. Hefty listing price tag? Check. Gorgeous photos for the local MLS? Check. Superb staging? Check and double-check. It’s a five-minute, web-designed, creatively written and staged, well-lit, deliberately horrendously acted—and persistently cheeky James Bond-style spoof. One high point is when the Bond stand-in (this has to be the agent) opens the sleek luxury car door and a sippy cup falls out onto the driveway.
As consumers, Americans have developed into a short attention-spanned and click-happy group. We in the real estate agent contingent have learned to make the most of this. As consumer habits have evolved, so too have our marketing strategies. A comprehensive marketing package is only part of the value I bring to the table when area clients engage me to put together their St. Louis listing and marketing backup materials. Data-driven pricing strategies, deep networking, and the solid work ethic that backs it up are part of the package as well.
Thinking of listing your St. Louis home this summer or fall? The James Bond approach works for the spoofy example because of the property’s Bond Street address—so we won’t be using a spy movie motif for your offering. But our approach will be creative and in tune with your home’s key selling points—along with a marketing plan that’s compelling and designed to get your property S-O-L-D for top dollar!
Contact me anytime for a complimentary consultation.
Posted by belsner under Mortgage
If you have ever looked at your St. Louis home’s mortgage balance and thought, “Yikes! That’s a lot of money!” you’re not alone. Such a gulp-inducing moment can be triggered by listening to one of the celebrated financial gurus explaining personal finance. Much of the latest financial wisdom is aimed at extolling the virtues of an entirely debt-free existence—which would seem to preclude any six-figure home loans on the family ledger.
For most every St. Louis family in the early or middle years, that debtless goal—although it pencils out as a good idea—is pretty much unattainable. If owning makes more financial sense than renting (it almost always does), unless the family can operate from a garden shed, taking on a home loan is unavoidable fiscal reality. Since home ownership is the acknowledged path for making headway when it comes to shelter, is there a good reason to worry about the mortgage that goes with it?
Last week, Daniel Bortz, a reporter in the Finance section of realtor.com, came up with “8 Surprising Facts” about mortgages—a few of which should serve to alleviate any free-floating anxiety homeowners might associate with their St. Louis mortgages—even hefty ones. Here are three that may or may not be very “surprising,” but in any case, certainly are relevant:
⦁ Mortgage interest rates can get really high…
In October 1981, mortgage interest rates averaged 18.45%! When you take a look at your typical 2016 St. Louis mortgage statement, and note how low your current monthly interest payment is, “Yikes! That’s a lot of money” should become, “Yikes! What a great deal!”
⦁ Even billionaires like Mark Zuckerberg have a mortgage
This could be the most anxiety-alleviating surprising fact of all. The Facebook founder refinanced his home with an adjustable-rate mortgage (the kind financial gurus tell you is the riskiest way to go). He refi’ed a 1.75% adjustable with a new 1.05% adjustable—a maneuver that saves him $1,981 a month! Why, since he could obviously pay cash for any property, would he take a mortgage at all? It could have something to do with the tax advantage home loans feature.
⦁ People celebrate their last mortgage payment in bizarre ways
This is hardly surprising—but does bear indirectly on why your St. Louis mortgage should be little cause for financial anxiety: it’s going to eventually disappear! And since the asset (the house) is counted as a positive which balanced the liability (the mortgage), month by month that liability gets smaller as the value you own grows. The Yikes! balance of the loan is negated by the Yippee! value of your property. (BTW, the “bizarre ways to celebrate” include Archie Bunker’s torching the paperwork in an episode of All in the Family).
These positives are the financial ones, but they are also bolstered by this real world big fat plus: owning your St. Louis home undeniably imparts a feeling of security and stability—something that most of us find to be nearly priceless.
I hope you’ll feel free to give me a call for feedback or advice whenever any St. Louis real estate questions arise. I’ll be standing by!