Relocating to St Louis Category

Lets Keep it all in Perspective

Let’s Put Things Into Perspective…

Being in Real Estate I talk quite often to top producing agents that specialize in various areas of the St Louis real estate market.  It’s amazing how often clients ask us about the St Louis real estate values, foreclosures in St Louis, and how short sales have a negative effect on St Louis property values. 

Here are my thoughts on the general St Louis market.  Yes times have changed! Perhaps the current financial and housing market is moving society back to the days when there were mortgage burning parties.  Parties when a happily married couple would invite their closest friends and family to their house to celebrate their accomplishment of finally paying off their mortgage.  They would all stand around the fireplace and watch the happy homeowners throw the paperwork from their mortgage (probably taken out 20 or 30 years earlier) into the fire and watch it go up in flames.  We all dream of simpler times, to the generations before us, there were not a lot of loan programs to choose from, fixed rate options were the only options.  There was no such thing as credit scores or even credit card debt.  Google and Yahoo were sayings you might say with a soft voice to try and make a baby smile.  True times have changed, let’s put things into perspective. 

In the early to mid 1980’s a typical family was earning about $47,000 a year which was a nice household income 30 years ago.   An interest rate for someone with a great credit rating and strong income ratios was a whopping 18% and people would brag about it at the water cooler at work.  This family could qualify for a 90,000 mortgage which would buy a nice home.

Now let’s compare a similar scenario today.  In 2011 the average household income is approximately $65,000-$85,000 a year. (50% increase in wages since 1980) With interest rates near 5%, the same family can purchase a 350,000-400,000 home. (Over 400% increase in home affordability)  

So the next time you hear someone talking about St Louis real estate values think of how affordable our homes in the mid west, especially St Louis are right now.   

St Louis continues to enjoy stable home values, combined with low rates, and a good inventory of homes for sale by motivated sellers.  2011 may very well be the best buying opportunity we may see in the next 20 or 30 years.