The downtown St. Louis city condo market “took off like a rocket ship” by doubling the sales volume for the first two months of 2017 compared to the same time in 2016, according to Barry Upchurch, president of St. Louis REALTORS®.
He called that organization the largest local real estate association in Missouri, with more than 8,000 members.
Not only did the dollar per square foot of condos increase – from $124 per square foot to $130 per square foot for the first two months – but also median sale prices held at $216,000, as consumers sought slightly smaller condo units averaging around 1,500 square feet compared to last year’s 1,610 square feet, Upchurch noted.
“The Central West End (CWE) area, another key anchor of the central corridor, was a different story,” said Upchurch, who has run Barry Upchurch Realty with his wife, Diane, for the last 18 years in St. Louis County. “While the condo market performed slightly better against 2016 for the first two months of 2017 in total number of sales, both the dollar per square foot dropped from $205 to $194, as did the median sales price for the first two months, which went from $265,000 down to $231,000.
“Most significantly, the average square footage of condos dropped from 1,833 to 1,471, again showing that consumers want smaller living spaces for a slightly lesser sale price as interest rates start to move upward,” he said.
Another key trend in the Central West End area is that the sale of single-family residential home sales was cut in half for the first two months of 2017 compared to 2016, and the median sale price dropped from $389,000 to $268,000, Upchurch said.
“While this could be a temporary pull back in stand alone single-family homes, this is something to keep an eye out for as the spring selling season begins in earnest,” Upchurch said.
St. Louis REALTORS® issues a monthly housing report for St. Louis city and county combined and all St. Louis Realtors have access to this for their clients.
“While months of inventory both for the city and the county continue to be down at 5.2 months of inventory, the days on market is also down to 122 from 180 days in January of 2016, making this a real seller’s market,” said John Gormley, chief executive officer of St. Louis REALTORS®.
Upchurch added that the good news for the overall central corridor is that nearly 400 single-family homes and condos were absorbed by the market over the last year, ending in the month of February 2017.
“With approximately 140 homes and condos on the market, there is only about 4.2 months of inventory on the market right now,” noted Upchurch. “The Central West End only has 3.5 months of inventory and the downtown condo market approaches 5.5 months of inventory, making it more of a neutral market.”
Usually, six months of inventory is considered a neutral market, neither a buyer nor a seller’s market, he said.
But Upchurch explained that 3.5 months of inventory in the Central West End “is proving to be a seller’s market as we are seeing multiple contracts on a home and condo when they come on the market.
“In addition, sellers are becoming more picky with terms and conditions, like obtaining bulletproof pre-approval letters,” he said. “This all points to the fact that you need an excellent negotiator in your corner.”
The Central Corridor will be interesting to watch this spring selling season, because it could go either way, Upchurch said.
“There may be low inventory in the Central West End, but buyers are starting to be more selective in their decisions early in 2017, another good reason to have a qualified St. Louis Realtor in your corner whether you are a buyer, seller or both,” he said. “If the downtown condo market continues to heat up, much of that existing inventory could go away, leaving buyers with nothing but a pre-approval letter in their hand and no place to hang their bike.”
Recently, St. Louis REALTORS® hosted the National Association of REALTORS’ Chief Economist Lawrence Yun, who pointed to something he called the “Animal Spirits” of the optimistic consumer who might cause GDP to rise this year.
“Now is the time to act. If the economy heats up, then interest rates will follow,” Upchurch said. “We are seeing some real excellent bargains out there now, given what your monthly payment will be.”
That good outlook is verified by Paul and Amy Mittelstadt, Realtors with Coldwell Banker Gundaker, who said positive trends continued in the 2016 CWE real estate market.
While 2015 was an excellent year for residential real estate sales in the CWE, with 373 sales reported to the Multiple Listing Service, 2016 continued to see additional improvements, they said.
“The total number of sales dropped only slightly in 2016, with 359 total sales, $100,000 and up compared to 373 in 2015,” Amy Mittelstadt said.
“The condo market had 229 sales, $100,000 and up, a bit better than the 220 in 2015. However, the average condo price per square foot jumped from $173 per square foot in 2015 up to $185 per square foot in 2016. The average sale price for condos also increased from $259,000 in 2015 up to $294,000 in 2016.”
Paul Mittelstadt said the highest price paid for a condo in 2016 was $2.5 million for the 27th floor at the Chase Park Plaza, “so 2016 was a very good year for CWE condo sales.”
The single-family market had 130 sales in 2016, $100,000 and up, they said.
“This was down slightly from 2015 when there were 153 sales,” Paul Mittelstadt said.
“The good news is that the average price per square foot increased from $135 per square foot in 2015 up to $143 per square foot in 2016,” he said. “The average days on the market also improved in 2016, from 76 days in 2015, down to 67 days in 2016.
“The highest price paid for a single-family house in 2016 was $1.295 million for the home at 4638 Pershing Place. The market was surprisingly slow in the price points above this,” he added.
Amy Mittelstadt said an encouraging trend they’ve observed in the past two years has been the influx of St. Louis County residents to the Central West End.
“These are primarily empty nesters whose children are no longer living with them,” she said. “They tell us that they are attracted to the vibrancy and walkability of our neighborhood.
“This is a buyer pool which we didn’t see 10 years ago,” Amy Mittelstadt said. “And fortunately, we continue to see buyers coming to the CWE from out of town, people who are coming to St. Louis to work for Washington University, BJC Health Care, St. Louis University, Wells Fargo Advisors, Boeing and many other employers.”
As a comparison, between January and February 2016, there were 37 sales of condos and single-family homes. The average sale price was $386,000 for a single-family home and $371,000 for a condo, and days on the market averaged 155, Amy said.
Between January and February of 2017, there were 34 sales of condos and single-family homes. The average sale price was $350,000 for a single-family home and $342,000 for a condo, and days on the market averaged 93, continued.
Paul Mittelstadt said he and wife Amy “have been the number one Realtors in the CWE for the past seven years, and, in 2016, we sold 30 CWE properties.
“Our average sale price was $483,000. Forty percent of the buyers came from out of town, 37 percent moved in from St. Louis County, and 23 percent were already CWE residents,” he said. “So this is an ideal profile for the neighborhood, with a genuine diversity of people moving into the CWE.”