Metro-east remains a seller’s market even as sales slow. Here’s expert tips for buyers
Sales are down for single-family homes, condominiums and townhouses in the St. Louis area compared to last year, according to the latest monthly housing report. The St. Louis Association of Realtors reports inventory is up from last year and slightly up from February, but prices are still high.
Scott Haggerty, president of the St. Louis Association of Realtors, told the News-Democrat conditions have become a little more favorable for buyers compared to last year.
“Last year, there was a big influx of buyers going way over list price. The concessions, I would think, were ridiculous. Meaning very little protection for the buyer, and that’s not a good place for the buyer to be in,” Haggerty said.
Belleville home prices are up 4.2% from last year, according to real estate site Redfin, but home sales were down about 40% this March compared to March 2022.
In O’Fallon, Ill., Redfin reports home prices are up 1.7% from last year. There were 48 O’Fallon homes sold in March 2022 and 32 sold this March.
While most experts still don’t consider the St. Louis metropolitan area to be a buyer’s market, those looking for a new home generally have more options now due to a slight uptick in inventory. Single-family home inventory is up 5.1% from last year, while inventory of condos and townhouses increased by 0.6% in the same period, according to the St. Louis Realtors’ report.
From February to March, the most recent month for which data are available, inventory increased from a 1.3-month supply to a 1.4-month supply, Haggerty said. For reference, real estate website Redfin estimates average inventory is about four to five months’ supply.
A potential explanation for low inventory is people are staying in their homes for longer, reducing the amount of transactions.
The National Association of Realtors reports the average U.S. seller in 2020 lived in their home for 10 years. This number may continue to increase as some people work from home and others are willing to commute farther to the office to live in their preferred area, Haggerty said.
One factor that may lead to increased sales is declining interest rates, Haggerty said. The current average rate is around 6%, and it could drop more in the coming months.
“They look very, very much like they’re going to continue to go down a little bit and probably end up around the 5.4%, 5.3% rate,” Haggerty continued.
Although interest rates may be easing, sales are still down in St. Louis and Illinois from last year. The Illinois Association of Realtors reports statewide sales were nearly 20% lower in March 2023 compared to last March.
Here’s what to know about buying or selling in the St. Louis area in the current market as interest rates creep down, but inventory remains tight.
Tips for buyers and sellers in Illinois, St. Louis
Although it may be tempting for sellers to price their homes high since they have an advantage, Haggerty recommends they price competitively instead.
If your home is worth $400,000, Haggerty said you should consider listing it around $389,000 or $392,000 rather than $405,000 or $410,000 to garner more interest and schedule more showings. This could help reduce the time your home sits on the market, as average St. Louis area homes currently take about 35 days to sell.
For buyers who aren’t working on a tight time constraint to move quickly, patience may pay off, Haggerty continued. Homes that have been on the market for 7 to 10 days are more likely to sell for asking price or a little less.
Buyers who have the financial means to up their earnest money or waive an appraisal rider may stand out, but there are also options for those who need to stick to their budget.
You can offer desirable terms to a seller, such as being flexible on the closing date and possibly allowing them longer to move out. Another option is to make an offer “as is,” or let the seller know you won’t be asking for repairs.
If your inspection shows large issues you’re not willing to deal with, your contract should still allow you to back out. This may be attractive to sellers as they won’t have to offer money for smaller items, but still protects buyers.
This story was originally published April 26, 2023 at 10:03 AM.
