Short Sale Success: Key is to Change Our Mindset!

Short Sale Success: Key is to Change Our Mindset!

A couple of interesting facts in this post from a real estate "insiders" blog that I follow (e.g.:  a buyer who engages in the purchase of a short sale will typically purchase the property at a 21% reduction to the current market value).  We've handled a number of short-sale transactions (buy- and sell-side) and would be pleased to discuss any questions you might have.

Shadow inventory improves...

Interesting article linked below from CNNMoney on the foreclosure mess. As I've blogged about previously (see condo entry from 7/13/2011), foreclosures have had a very real and measurable impact on the market. However, I find it unlikely that there is a massive shadow inventory that will roll over us like a Tsunami. This would imply a level of communication and coordination (not to mention agreement) among the various institutions involved that simply does not exist. Further, if so many were on hold, at least some participants would be releasing inventory in classic "prisoner's dilemma" fashion.

Here's the link: Shadow inventory improves but still threatens housing recovery

Urban farmer turns his yard into a cornucopia of produce

We helped Jake in the purchase of this property. Way to go Jake!

Urban farmer turns his yard into a cornucopia of produce

630 W. Polo Drive, Clayton, MO

One of the most interesting properties on offer...

Mid-year Market Overview

We ran some reports at the end of April.  The Clayton and Ladue markets were looking great.  We were so busy achieving sales that I never got around to posting about them.  We’re now at mid-year and have just run, for all MLS transactions, single family home sales reports for January-June 2011 compared with the same period in 2010.  There is still some good news to report – just a little less rosy than if we had written this post two months ago.

Condo Update/Foreclosures

I ran some statistics recently for a client considering purchasing a block of bank-owned condos and was shocked by what I learned.

Looking across all price points for all of St. Louis County, the average sold price for privately owned condos for the period June 2010 to June 2011 was $198,907.  The average days on market was 142.

The REO stats by comparison to privately owned blew me away.  The average sale price was $100, 211.  The average days on market was 74. 

So, your typical REO is selling for half-price and it is selling twice as fast.  That is an amazing difference. 

Here's a fantastic example of one of our current condo listings (nowhere near average and not a foreclosure - just giving it a plug):



What do I mean by REO? 

Expensive Mistake?

In Saint Louis, it is not the standard for listing agents to meet and accompany the buyer’s agent when the buyer’s agent is showing a property to a client.  However, it is a fairly common practice for many listings in the higher price categories.  There are some valid reasons in favor of the practice, but from my experience working with both buyers and sellers, sellers should be cautious:

Move to Improve

What to Consider When You Outgrow the Nest

By Iyna Bort Caruso

The architecture is stunning, the neighborhood ideal and the schools are highly rated. But the home that was once a perfect fit is now a tight squeeze. When there’s everything to love about your house but its size, it’s time to decide: move or improve. 


The benefits of each option are tempting. Renovating is an opportunity to custom fit your home to your lifestyle. On the other hand, moving to a larger estate lets you sidestep weeks or months of construction zone living. 


There is no right answer and certainly no easy answer, which is why experts advise isolating the many variables down to a few manageable decision points.

Despondent Yet? Time to buy. Seriously.

Has there been a time in the last 3 years when you’ve heard a realtor say “Wow, this is a really terrible time to buy”?  No.  In fact, we keep hearing reasons why it’s “a great time to buy” real estate. 

Everybody’s situation is different, so the truth really depends on your individual circumstance.  However, the facts and the recent individual experiences of most of our clients indicate that it is, indeed, a good time to buy.  And a sense of urgency is justified.

But before we get to the facts, let’s do a gut check.  How do you feel?  Setting aside the fear for a moment, what is your gut instinct telling you?  How we feel, collectively, is just as important as the facts because the market is driven by expectation and “the facts” are just a backward-looking description of the result of expectations acted upon.

I came across the graphic below that illustrates why now may truly be a great time to buy.

None of us can predict the future, but a banker I work with frequently has put together an interesting analysis (with specific numbers) that depicts a variety of scenarios dealing with interest rate and price level changes; the examples he gives provide a compelling case for acting now.  And for buying rather than renting.  Here’s the link:

https://edge.mortgagecoach.com/report/edgereport.html#24540-0-2-23639

The Last Great Bargain?

Sabrina Robb represented the buyers of this fine property on West Polo Drive.  The sale, which closed in January at $2million, was an exceptional bargain for 7,300 square feet of living space on .62 acres.  Originally priced at $2.5million and built by a seasoned luxury builder, it is one of the most exciting new homes built in Clayton in recent years.



Front Photo from CB Gundaker's MARIS listing

When the market shifted in 2007, there were a number of high-end spec properties under construction. In By 2009 many of those were competing against re-sales and several had been taken back by the banks.  This made for a year of good deals in 2009;  alot of the inventory cleared out and builders took a break.  At the moment, there are no longer any distress or REO properties available.  Looking at new and newer in 2010, which was still a difficult year for the upper end, the price per square foot increased by nearly 13%, selling price to asking price improved, and days on market decreased.

Was this this last great deal on luxury new construction?

Boom - Clayton luxury market starts strongly in 2011

Between January 7th and 14th, five Clayton properties priced above $1million have gone under contract.  That is an amazing wave of sales:  to put it in perspective, there were only fourteen listed sales closed above $1million in all of 2010.  And now we have five in a week?

What explains the sudden surge? 

Low rates: There seems to be a recognition that rates have nowhere to go but up.  In the jumbo mortgage market the spread narrowed last year and remains better than it was during the worst of the meltdown.

Sellers drawing the line: Many sellers in higher price categories have the strength to wait.  Throughout 2010, many such sellers held the line and buyers have recognized that the best properties still command a strong price - and there's rarely been more top-end inventory to choose from at one moment.  This creates a risky situation, however, because it can be very hard to know - for a buyer or a seller - if a price is just too dear.

Buyers gaining confidence: Most business owners, senior executives, and professionals I talk with are feeling better that - although we may have to struggle along for years - we are no longer staring into a bottomless crevasse.

So what happened the following week?  Five new (and returning) listings above $1million entered the market to replenish the inventory!

Keep calm and carry on.....

Clayton Condo Market

I was meeting recently with a client to provide an updated market analysis.  My client, a financial wizard, loves to see the numbers.  In pulling together my analysis, I used a trend tool to look back at inventory over the last 12 years for Clayton condos.  The resulting graph is startling and the correlation between inventory build-up and events in the rest of the world speaks for itself (although I've added my notes in red).  Sure enough, when the going gets tough, there is a nearly immediate and direct imact on the real estate market.

So where does that leave us today?  From the graph, it certainly appears that inventory is trending the right direction.  As the backlog clears out, the market will further stabilize.  Meanwhile, there continues to be demand for quality condos that are priced to the market.