spielberg bwFrom the Desk of Cory Spielberg:

(314) 726-6442 – cory.spielberg@upperendproperties.com

Supply and demand, that old economic go-o still very much holds true.  I spent the weekend in Des Moines, Iowa and enjoyed having conversations with several real estate investors, agents and others.  It was as if nothing negative was going on.

My cousin just bought a house in a new development in which I saw lots still being sold for new construction!  New construction! It was unreal!  They were buliding more and more homes every month.

The rental market in Des Moines was strong, as well.  Occupancy was in the 90-plus percent range according to each investor I spoke with.  The point is that there currently is not a great amount of supply, but quite a bit of demand.  So I asked why the demand???  The answer I kept hearing was the combination of  affordable homes and a very reasonable cost of living.

Now I will take you on another trip I went on in January, this time to Las Vegas.  The story is completely different out there.  There are two scenarios I found, both in the suburb of Henderson, Nevada just outside of Las Vegas.  One gentleman bought a condo 7 years ago for $250k and then relocated and rented his condo to cover his mortgage and his condo fee.

However, recently the rental market has cooled off causing him to lower rent to where he was losing each month.  The value of his property had dropped to $180k and resulted in him having to take a loss, be it now or over a period of time.  He chose to short sale the condo and come to the bank with $20k to get rid of the headache.

Scenario two in Las Vegas: this is one of the biggest horror stories I have ever heard!  A couple bought a home for $800k in 2006, putting 30% (or $240k) down.  This was a gorgeous 3500 square foot home, one that’s a dime a dozen in Vegas right now.  His wife was laid off and his income had been cut considerably by a pay reduction causing them to have problems making payments on their $560k loan.  The property wouldn’t sell for what they owe on it, so they decided to file for bankruptcy and rent a property down the road.  The bank wouldn’t work with them which is absolutely unreal to me.

Let’s head back to Saint Louis where we are, in my opinion, not in too bad of shape.  If a home is priced well and in a high-demand area, it will not stay on the market very long.  The further west you get, the more inventory exists.  Supply is very high and demand is okay.  As you move towards the Ladue, U-City, Clayton area: if it goes on the market, is priced right, and in good condition it will sell very quick.

The thing to takeaway from all of this is that supply and demand is primarily driven by location and price.  If you want to sell your home, we can do it and do it quick, but you have to listen to us even if our advice is not what you were expecting to hear.

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