Mark's Market Update - Interest Rates and Inventory Trends

Posted by Mark Gellman on Monday, December 10th, 2018 at 10:11am.

Welcome to another edition of Mark’s Market update. Great news, interest rates down to 4.75% from a high water mark of approximately 5.4% a month ago. This positively impacts buyer's buying power For simplicity purposes, a $2,000 payment per month at 4.75% interest rates approximates a $390,000 home. While at 5.25%, the same $2,000 payment would equate to a $360,000 home. Simply the interest rate going down .5% would increase buying power by approximately $30,000 - which is great for buyers! What is happening in St. Louis and St. Charles County, when reviewing Months of Inventory, Unit Sales and Sales Prices? In St. Louis County, all price points; Months of Inventory has increased Nov 2018 vs Nov 2017 by 8%, Unit Sales decreased 9%, while good news is Sales Prices increased 9%. This means that although not as many homes sold Nov 2018 vs 2017, the great houses that are selling, are getting a premium over 2017. In addition, the decrease in sales and not as many homes coming off the market for the holidays, which traditionally occurs around this time. When evaluating St. Charles County, all price points; Months of Inventory has increased Nov 2018 vs Nov 2017 by 20% and Unit Sales decreased 15%, (reflecting a significant softness in St. Charles County). Even for the great homes, sales prices have only increased 8%. Lastly an interesting market segment I reviewed were luxury ($1 million + homes) in St. Louis County. I compared November 2018 vs November 2017 and noted that List to Sale price decreased by 4%. This meant, that many sellers were overpricing their homes, but ultimately sold their homes, but at a significant discount over list price. In addition, sales prices have fallen 1.5% year over year. However, the good news is the fact that luxury homes in St. Louis County, over $1 million are indeed selling, with sales Nov 2018 vs Nov 2017 up 10%. This reflects the motivation of many of the luxury sellers, who are overpricing their homes and then becoming significantly more realistic, when they are negotiating and ultimately many sales are occurring. If you are a buyer, it is a great time to write offers on Luxury Homes (there are some great values). If you have any questions about buying, selling, investing or you want to understand a current home evaluation, don't hesitate to call, email or text. Thank you so much and have a fantastic Holiday Season. Lastly, if you have any questions about buying power or interest rates, do not hesitate to reach out. Have a fantastic day! See our latest selling option: www.stlrocketlisting.com

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