Newspaper article St Louis Post-Dispatch (MO)

Pent-Up Demand and Low Mortgage Rates Lift St. Louis Housing Market

Newspaper article St Louis Post-Dispatch (MO)

Pent-Up Demand and Low Mortgage Rates Lift St. Louis Housing Market

Article excerpt

Summer is here, and the St. Louis housing market is bopping along at a brisk pace.

Up is the number of homes sold compared with last year, as is the median sale price. Down a good down is the number of days a house stays on the market unsold.

"Credit is still very tight even though the market is much better, and we are very pleased with the first half of the year," said Jim Dohr, president of Coldwell Banker Gundaker in St. Louis.

And yet, there are reasons for concern. While most millennials polled say they want to buy a house, many lack the credit score needed these days to qualify for a mortgage. As a result, the number of first-time homebuyers is down by 25 percent, Dohr said.

"First-time buyers fuel the move-up market, but there is pressure as you move up the food chain, so to speak," Dohr said.

As a result, the area's market for pricier homes those that cost more than $750,000 is relatively slow.

Also affecting the market is the slower pace of home construction. While 7 percent ahead of last year, homebuilding is still recovering from the housing bust. Dohr said lenders remain cautious with builders who nearly went broke and are still trying to get back on their feet.

Permits issued through May for construction of single-family homes in St. Charles County the area's largest home construction submarket totaled 874, compared with 844 last year, according to the Home Builders Association of St. Louis & Eastern Missouri. Permits issued in St. Louis County totaled 371, two fewer than last year.

Dohr said the biggest boost to the St. Louis homebuying market is "tremendous pent-up demand." Also helping sales are continued low mortgage rates and empty nesters ready to downsize, said Karen Erlanger, a Coldwell Banker Gundaker agent.

Among them are Rob and Gail Freeman, who moved last week from a three-bedroom split ranch in Richmond Heights to a two-bedroom brick house in Shrewsbury. Their experience illustrates the market's two sides: Listed houses sell fast, and finding a house can be difficult.

After one adult child moved away and the other entered college, Gail Freeman said she and her husband put their Richmond Heights house on an online real estate site. Twelve hours later, an agent with a buyer responded.

"So I said: 'Honey, let's pack,'" she said.

As a result, the Freemans had only a couple of weeks to find a new house. For hours each day, Erlanger showed the Freemans house after house. Other buyers outbid them on two houses, including one for which the Freemans offered $10,000 over the asking price.

Gail Freeman, 56, an interior decorator, said suitable homes were scarce.

"We saw a lot of dogs," she said.

The couple bought the Shrewsbury house because it is near Gail Freeman's mother and is their preferred size.

"It's a little bit of dog, too, but I think I can make it work," she said.

A plus for the Freemans is that they paid less for their new house than what they got from the sale of their old house.

"We bought cheap, and we sold high," Gail Freeman said. …

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