Chart compiled by Katie O’Connor
Photographs by Eric Fogleman
If you were to make a list of pros and cons about St. Louis, the price of real estate would be the first thing in the pro column. Mention the state of the market to a real estate agent and get ready for a thousand-watt—make that a million-dollar—smile. Business is good. Very good.
“Spring has sprung early this year,” says Peggy Shepley of Dielmann Realtors. “The market is good and strong.”
Everyone echoes the same sunny sentiment. “I have been doing this for 20-plus years,” says Steve Mathes of Coldwell Banker Gundaker. “I started out when interest rates were 16 percent to 18 percent. We didn’t know better. Now so many people can afford to own, everything is really clicking. Economic problems haven’t filtered down to real estate. It’s the one area that has not been affected. It’s been good year after good year.”
Nationally, the median house price from the fourth quarter of 2003 to the same period of 2004 grew by 8.8 percent, according to the National Association of Realtors.
St. Louis has done better. Mike Travaglini, president of the St. Louis Association of Realtors, estimates fourth-quarter growth from 2003 to 2004 at 9.3 percent. The median house price here in the final quarter of 2004 was $129,100 (as opposed to $470,900 in Los Angeles, $403,600 in New York and $149,300 in Kansas City).
But the source of the growth comes from a variety of segments, depending on whom you ask. According to Travaglini, the greatest growth has been in homes valued at less than $200,000. “Properties that were selling a few years ago for $80,000 to $90,000 are selling for $150,000 to $170,000. In some cases, people have doubled their money in the last three years. It is a very affordable price range. Over $300,000, the properties are appreciating but not at the same rate.”
But some local real estate agents say the more expensive homes are selling like gourmet hotcakes. Real estate company Janet McAfee just completed its best year ever, according to Mike Winfrey, a McAfee agent. “We took it apart by sectors, and we sold more houses than ever in the $1 million-plus category. The upper-end market is very, very strong.”
The central corridor remains popular, but people are buying all over the region, says Steve Holekamp of Prudential Alliance. “People want more house for the money, so they go west. Then they get west and they decide they don’t want to drive, so they decide to get less house in terms of size but be in town.”
But many still argue west is best: Wildwood, St. Albans, St. Charles, St. Peters, Jefferson County. “As people are moving further west, they are looking to get a little more square footage for their dollar,” Winfrey says. “The further west they go, and when they cross the river and get into the St. Charles and St. Peters area, the more they get.”
Travaglini says the number of building permits in Jefferson County is soaring. “[It] has grown by leaps and bounds and is continuing to do so,” he says. “Recently, the number of new building permits in Jefferson County outnumbered those in St. Louis County, and St. Charles is teeming with activity. There are a lot of hot spots; there isn’t just one.”
One of the most notable is downtown. “There has been great growth in the city,” Holekamp says. “It’s amazing.”
“I see a surge to the city and boy, does that make me happy,” Shepley says. “I am seeing people looking seriously at Lafayette Square. In one week, I did two sales down there. A good mayor gives confidence to the city, and I think with all the new building, lofts and restaurants, people start thinking, ‘Maybe I am missing something by being out in the boondocks.’”
In the heart of downtown, lofts have become the trendy and affordable way to downsize, while contributing to the revitalization of the Washington Avenue area. But the area is still not a guaranteed investment. “I’m having some concerns about lofts. I haven’t seen many resales yet,” says Gail Hunyar, a local real estate appraiser with 22 years of experience. “A lot of these folks are going to be transferred to other jobs. We’ll be able to tell in two to four years when the young, single families start having kids and move out.”
Another sizzling neighborhood is Maplewood. “You can get a really good house for the money,” Holekamp says. “They have had pretty rapid growth in the last few years. It wasn’t long ago when it was harder to sell property in Maplewood.”
Then there is the central corridor, where prices continue to shoot skyward. For example, in Clayton. “It’s unbelievable,” Winfrey says. “Four or five years ago, you would have been able to buy a home in the Moorlands in the $400,000s to $500,000s. Now you can’t even think about getting in there unless you are in the fives or sixes. And in Claverach Park, they’re $800,000 and up. If you look back three to five years, you just can’t believe the prices.”
As for new construction, Mathes sees it in the central corridor as well as out west. “Hot new construction areas are Olivette and Creve Coeur,” he says of the markets in which he specializes. “People are still building in Ladue and Clayton, it just costs more. For affordability, people are turning to University City and Olivette, where the property is sometimes $100,000 less.”
It’s not only the area but the house the buyer can buy. Holekamp sees people still longing for the dream house.
“Homeowners are still fascinated by the big home, if they can afford it,” Holekamp says. If they can’t have size, they at least want a place that’s move-in ready. “They are willing to accept less home if it is just drop-dead gorgeous and perfect. There is the baby boomer who is downsizing somewhat, and he is willing to go from 6,000 square feet to 3,500 square feet, but he wants it to be really perfect.”
Shepley agrees that no one seems particularly interested in renovation. “Buyers are usually both working,” she says. “They don’t want to move into something that needs work. The last thing they want to do is to put in a new bathroom. Or even paint. I have heard people object if the carpet color is wrong.”
For others, renovation is a small price to pay for the chance to buy a historic home with “good bones” in one of the areas optimists refer to as “up-and-coming.”
There are great deals to be had in neighborhoods such as Forest Park Southeast and Old North St. Louis, but buying in these areas is risky, because while some neighborhoods, such as Lafayette Square, can safely be called revitalized, others have a more uncertain future. With an abundance of affordable real estate just a bit of elbow grease away from beauty, these neighborhoods all aspire to be the city’s next real estate gold mine. Not all will succeed.
“I would be very cautiously optimistic of that area,” says Hunyar of Forest Park Southeast, where she gets many appraisal requests. Barnes-Jewish Hospital and Washington University could boost the desirability of the area, she says. Other local institutions haven’t been as successful. JaBoni’s Bistro, the toast of the town when it opened in 2002, became Flying Pig BBQ in February. Nearby ice cream parlor Mangrove also closed recently.
But some haven’t lost hope. The Regional Housing & Community Development Alliance, a not-for-profit organization, has raised $11 million in grant money to bring housing to struggling neighborhoods such as Forest Park Southeast and Old North St. Louis. “In both neighborhoods there are active community-based groups,” says executive director Stephen Acree, who adds that Forest Park Southeast is “thriving significantly more in the last five years.” The RHCDA is also overseeing the first phase of development on 30 acres in North St. Louis. Finished rehab projects and new homes will range from $145,900 to $200,000, but a glance around the area confirms a significant upswing could take several years.
Mary King, of Mary King & Associates, began working around the Benton Park area in 1989. She claims the area’s appreciation has increased significantly. “[Back then] the highest prices were $55,000, and now we are selling homes in the $300,000 to $400,000 range,” she says. “We used to sell one or two a year. Now they aren’t on the market more than a little while.”
She attributes this to more qualified rehabbers embracing the neighborhood, plus the incentive of historic tax credits. Neighborhoods such as Benton Park and nearby Soulard and Lafayette Square are important draws because they are near downtown, but still maintain their own character, King says. And Mardi Gras madness doesn’t detract old French architecture lovers from nearby Soulard, considered one of the hottest neighborhoods in the city in terms of real estate sales.
Lafayette Square, perhaps the poster child for neighborhoods that have gone from grandeur to decline and back again, is one that has been successfully transformed. “You can safely say that Lafayette Square is a good investment,” Hunyar says. “It has a lot of people who entered for the long haul.”
What does the future hold for the market? Guarded optimism may be the operative phrase. All eyes are fixed on interest rates. “As long as the interest rate environment stays where it is and interest rates stay relatively low, we are in good shape,” Winfrey says.
Get An Agent
An agent can make or break a deal. Here’s how to find the right one.
Scout. Get in your car, drive to the neighborhoods you like and look for signs. For Sale signs. You want a person who knows the area, what’s available, what’s coming up and what everything costs.
Browse. Mike Travaglini, president of the St. Louis Association of Realtors and an agent for Coldwell Banker Gundaker, suggests checking the Web for local real estate companies. It’s a quick way not only to look for the best agent, but to see a wide selection of listings to give you a better idea of what you want.
Research. Steve Holekamp of Prudential Alliance recommends picking up the newspaper to “see who handles the kind of property that you are wanting to buy, in the area you are wanting to buy it.”
Interview. Once you find a prospective agent, do a thorough interview. Ask for references. Ask questions. “Don’t necessarily just let them talk to you, but make sure they are listening to you,” Holekamp says.
Network. Of all the ways of unearthing your own real estate agent, the best is personal reference. Ask friends, family, neighbors and potential neighbors. Then call and get started on making your move.
Blue Chip Neighborhoods
Some neighborhoods, blocks, even single sides of the street persist as ever-sparkling real estate gems. Families settle, grow up there and never want to live more than a block or two away. Here are some of the best of the best places to live in our fair city.
- The Wydown area in Clayton. (Arundel Place, Aberdeen Place, Wydown, Ellenwood, Fauquier, DeMun, The Moorlands).
- Central West End. (Portland Place, Westminster, Pershing). Close your eyes and you’re back in the 1800s.
- Ames Place in University City. A neighborhood jewel that has never dimmed, even when the blocks on either side were headed south.
- Orchard Avenue in Webster Groves. A classic Webster street with big houses, large lawns and undeniable charm.
- Woodlawn and Taylor in Kirkwood. Kirkwood’s answer to Webster’s Orchard.
- Geyer Road. “It’s like the gold coast now,” says Steve Holekamp of Prudential Alliance. “Anything that touches Geyer Road east or west is just exploding.”
- The Hill. “It has never seemed to lose its value or attraction,” says Mike Travaglini, president of the St. Louis Association of Realtors.
- Chevy Chase in Ladue. The Fourth of July parade is one of its many draws.
- Pasadena Hills. A tight-knit community tucked away up north by Natural Bridge, known for festive street dances, tours and holiday celebrations featuring horse-drawn carriages and carolers.
- Holly Hills. A trip on foot or by car in this neighborhood should include playtime in nearby Carondelet Park.
- Compton Heights. This historical section is an oasis in the Midtown area.
- Utah Street in the South Grand area. The massive homes are coveted by South City residents.
- Flora Place. Older homes tell the tale of the Henry Shaw era, and ahh, the flora.
Rent or Buy?
Buying a home is a big step and not always the right one. Here's when to buy and when to rent.
Buy if...
- You can write off interest paid on your home mortgage.
- You're tired of not being able to make your abode your own (paint, rehab, etc.)
- You're ready to settle down in your chosen neighborhood.
Rent if...
- Your job requires a substantial amount of travel.
- You're not familiar with the city and what areas show the best appreciation.
- You are considering a move within five years.
If the decision is largely a question of finances and you need help crunching the numbers, visit www.homefair.com/homefair/usr/rentbuyform.html for a calculator that will analyze your annual costs to rent vs. buy.
By Christy Marshall and Traci Angel
