ST. LOUIS 鈥斅燰ickey Harper has been house hunting for seven months. And she鈥檚 on a deadline.
She and her fianc茅 hope to find a home in the city before the new school year so Harper鈥檚 daughter can continue at The Soulard School, which requires students to be city residents. The couple had their eyes set on a renovated Benton Park West home listed for $349,900, but they lost out, even after bidding $25,000 over its asking price.
鈥淭hat鈥檚 the challenge now as a buyer. You don鈥檛 have time to think about it. In less than 24 hours, you have to make an offer,鈥 said Harper, 43, who works in health care. 鈥淚t鈥檚 nothing like what it was when I bought my house five years ago.鈥
It鈥檚 a seller鈥檚 market across the region. A frenzied battle has broken out among buyers who often have to bid thousands of dollars over asking price and forgo common contingencies to land a home. In hot neighborhoods like Tower Grove South, it鈥檚 not uncommon to see a home sell for $55,000 over its asking price. They鈥檙e going for $20,000 over ask in Affton, Florissant and St. Peters.
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The market mirrors nationwide trends: Median existing-home sales prices have surged 17.2% to a record $329,100, driven in part by historically low mortgage rates and a staggering lack of supply, according to the National Association of Realtors.
Vickey Harper looks at the ceiling as she and her family tour a property in the Benton Park West neighborhood of 最新杏吧原创 on Thursday, April 22, 2021. In a very competitive market, some real estate agents are reporting buyers spending tens of thousands of dollars over asking price, creating a market agents haven't seen in years. Photo by Colter Peterson, cpeterson@post-dispatch.com
The 30-year, fixed mortgage rate is 3.08%, down from the same period last year when it was 3.45%. In December, it hit 2.68%, the lowest since FreddieMac began tracking data in 1971.
Houses are spending less time on the market in the metro area 鈥 just 34 days in March compared with 48 days a year ago. Average home prices here have jumped 16.2% to $303,955, according to the latest available data from industry group 最新杏吧原创 Realtors. And prices are rising regionwide: Average sales in Madison and St. Clair counties each grew 13% to $174,000 and $186,000, respectively, in the first quarter of this year compared with the same period last year, said Gerry Schuetzenhofer, president of Coldwell Banker Brown Realtors.
There are also very few houses on the market: A balanced housing market is considered to have six months of inventory. The 最新杏吧原创 region had 1.1 months of inventory in March, meaning it would take a little over a month to sell the area鈥檚 existing supply of homes for sale. It鈥檚 the second consecutive month the area鈥檚 stock has been that low.
鈥淲e are in an extreme seller鈥檚 market,鈥 said Matt Muren, a real estate agent with Berkshire Hathaway HomeServices Select Properties.
In many cases, people are buying homes in 鈥渁s-is鈥 condition, where sellers don鈥檛 make any repairs or improvements. Sellers get to dictate closing dates and can dismiss traditional contingencies like financing, inspections and appraisals that they never would have in the past, Muren said.
鈥楥耻迟迟丑谤辞补迟鈥
Joe Hostman of Hostman Real Estate RE/MAX Results likened the housing market to the Wild West. He鈥檚 seen many homes go over list price by $30,000 to $50,000, and he is advising his buyers to start looking for houses under their budgets to leave room for a bidding war. Desperation from buyers has prompted agents to explicitly state in new listings not to walk the property or to disturb the owners without an appointment, he said.
鈥淚f there鈥檚 a 鈥榝or sale鈥 sign in the yard, people will peek in windows,鈥 Hostman said. 鈥淧eople have no shame.鈥
John Jackson of John Jackson Neighborhood Real Estate said 90% of his listings attract multiple offers. He knows of one South City house that recently had 100 showings over three days and 27 offers. He鈥檚 advising buyers not to make demands 鈥渋f they want to win,鈥 Jackson said.
Classical musician Jennifer Gartley, 41, has been looking to buy since November. She鈥檚 on the hunt for what real estate agents said is the most in-demand house: a three-bedroom, two-bathroom home.
鈥淚 am a data driven, rational person and this feels like a very emotional market. You have to decide everything so quickly,鈥 Gartley said. 鈥淚 feel like I鈥檝e just dipped my toe in the market at this point because there鈥檚 just not that much inventory, and the inventory that鈥檚 out there is not exactly what I want. It feels really overpriced.鈥
"What do you think?" Realtor Matt Muren asks Myla Harper, 7, as she answers with sideways thumbs as her family tours a property in the Benton Park West neighborhood of 最新杏吧原创 on Thursday, April 22, 2021. In a very competitive market, some real estate agents are reporting buyers spending tens of thousands of dollars over asking price, creating a market agents haven't seen in years. Photo by Colter Peterson, cpeterson@post-dispatch.com
An affordable cost of living was one of the major reasons why she moved to 最新杏吧原创 in 2006 after earning her doctorate degree from the University of Illinois. She bought her first home in Tower Grove South after the 2008 recession and sold it 鈥渟hockingly fast鈥 in August.
鈥淚t鈥檚 feeling like 最新杏吧原创 is losing a little bit of that (affordability). I鈥檓 confident I鈥檒l find something, but that confidence comes from the fact that I have this profit from my house. If I was just starting out, I would be in a much different position,鈥 Gartley said.
The market is even surprising to those who work in real estate. First-time homebuyer Jessica Jackson, 27, works for a title company and had been looking for eight months. This past week, her offer to buy a home in Lemay was accepted. Her winning bid: $22,000 over the $165,000 asking price.
鈥淚 definitely didn鈥檛 realize how cutthroat it was,鈥 Jackson said.
鈥楽o anxious鈥
Real estate agents, however, caution sellers from getting too greedy. The list price still has to match the condition of the home or it will sit on the market, agents said.
鈥淚 would say a couple years ago I would get a funny look if I questioned why a home has been on the market for two to three weeks,鈥 agent John Jackson said. 鈥淣ow if it鈥檚 Monday or Tuesday and the home came on the market on Friday and doesn鈥檛 have a sold sign, I鈥檓 already questioning what鈥檚 wrong with it.鈥
Real estate agents said it鈥檚 been a seller鈥檚 market for a few years. Still, there weren鈥檛 as many competing offers, sellers were more willing to make concessions and a few bargains were yet to be discovered.
Then COVID-19 hit, and the market took off, agents said.
鈥淚 think it boils down to buyer confidence. Those who survived COVID economically and were able to come out with their jobs saved a lot of money. They weren鈥檛 going to Cardinals games, concerts or vacations,鈥 Jackson said. 鈥淭hat, combined with their housing needs and low interest rates, sort of created the perfect storm.鈥
Realtor Matt Muren shows a property to his clients in the Benton Park West neighborhood of 最新杏吧原创 on Thursday, April 22, 2021. In a very competitive market, some real estate agents are reporting buyers spending tens of thousands of dollars over asking price, creating a market agents haven't seen in years. Photo by Colter Peterson, cpeterson@post-dispatch.com
Agents say other factors are at play, too. Some homeowners don鈥檛 want to sell if they then have to compete in the same market as buyers. And, with lumber prices quadrupling, developers are building fewer new homes.
Vickey Harper, the homebuyer on a time crunch, is getting increasingly frustrated. She has increased her max budget three times. She has accepted that she鈥檚 likely not going to get the square footage or the number of bathrooms she wants. And the seller of a Benton Park West home she recently toured stopped accepting contracts while her agent was writing her offer.
Now, it鈥檚 more likely she and her family will have to rent while they continue to house hunt.
鈥淚 really don鈥檛 want to have put my daughter through that. I don鈥檛 want to have to uproot her twice,鈥 Harper said. 鈥淚 feel anxious, so anxious.鈥
