How Bad Could it Really Be?
I was at lunch the other day with an executive from one of Saint Louis’s largest publicly held corporations who recently relocated to Saint Louis. We were talking about the economy and how much the landscape has changed in so many different industries. I knew he was eventually going to get around to real estate because that was the main reason we were meeting. He was interested in to discussing his options on whether he should lease or purchase his next place. Finally, he asked the question, “How are things in the real estate business?” This is my favorite question. We all know how things are in the real estate business if we are strictly talking about sales. Clearly, if you read the front page of this past Tuesdays Post Dispatch and if you haven’t been in hibernation the past few years, you know the answer is not good.
A few other questions and topics we touched on that I thought would be helpful to our followers….
How is real estate in Saint Louis?
Saint Louis is a very interesting market. Overall, things are not as bad as they are in other cities. There are a few pockets were some movement is taking place; like Clayton, Ladue, Chesterfield just to name a few. Sure prices have dropped a bit but nothing like other parts of Saint Louis.
Other parts of the Saint Louis Metro area are struggling. It is all about supply and demand. If there is inventory, there is an issue. You can take almost any town in any city and apply that statement. With a huge shortage of buyers due to economic conditions, it is inevitable that where there are tons of for sale signs, prices will continue to drop.
How is Upper End Properties adjusting to this environment and how are you different?
We are taking advantage of what opportunities are being presented by the current economy. Being a full service real estate company doesn’t mean just representing people to buy and sell. Sure, that is a big part of our business, but as you can see in a recent article in Barron’s other related items like leasing are a going to be a big part of the housing market equation going forward. We are seeing a lot of people looking for homes to lease upwards of $4000/month.
We are also seeing many of our clients who are having trouble selling their properties sit tight until the market gets better and lease their home should they need to relocate. This has been a very good option for some of our clients that allow them to cover their current home and then hopefully sell their home once the market improves over the next couple of years. Many real estate companies don’t like to deal in leasing and property management for many reasons.
From the beginning, it was important to me that we remain solution-based and client-focused. We do not view our clients as transactions, but as long term relationships. Being full service means we can provide a solution for someone looking to buy, sell, lease, short-term lease, furnished lease, manage, and advise on anything real estate related. Our owners are adamant about being our clients “real estate quarterbacks.”
What do you suggest I do right now, lease or buy?
That is dependent on what your long-term plans are. It is definitely a buyers’ market right now and if you are here for the long-term, there are many opportunities to purchase a house at historically low prices. If you know that you may only be here a couple of years, it may make sense for you to lease something. If you are in a situation where you are unsure how long you are going to be here, you may even want to consider a lease with an option to purchase.
Is there an end in sight to a housing recovery?
In my opinion, we are a few very big economic indicators away from a housing recovery. My guess is a few years at best.
How is the residential real estate business in general for agents?
This market is going to define real estate companies and real estate agents ability to adapt and survive. There has already been a huge flush out of thousands of agents in Saint Louis and nationally from 2007-2010. The strong multi-million dollar agents will continue to do well. They might see business drop from selling $5 million in homes to selling $3 million in homes, but still make a nice living. However, the average real estate agent is going to struggle over the next five years.
