Is the American Dream fading? Fidelity National Financial just published a study, Generational Dream Homes - IPX1031 about Americans giving up on their Dream Home. 90% of us believe that owning a home is part of the American Dream, but now 51% say it is not attainable. Say it Ain’t So! Sharply rising home values and interest rates both put the squeeze on buyers this year. Add in high inflation that eats extra money and I understand the discouragement.

Let’s consider instead what your idea of a dream home really is. Most people will immediately picture a home larger than they need, or can comfortably afford, or in a location that is not feasible in the short term. Guess that’s the Dream part! My first dream home was a newer 2 story I drove by many years ago in Manchester. Then it was larger 1.5 story in Clayton with a slate roof. Then it was a private cottage on a white sand beach. Now it may be closer to a one story villa in the Southwest! But year after year I live with my family in a home and area that fits us well, we have been there 24 years now and enjoy it. In fact, when friends and clients tell me what is most important about their home, it centers around how they use it, the rooms, the backyard, the community it is in, etc. Sure there is always a kitchen redo, basement remodel or new flooring in the works, but for the majority of us who are in a home and area that fits their needs, and a few wants, that is the dream! Homeowners make the home work for them, live out their lives, and don’t get caught up in being too IG (Instagram).

Now for those struggling to get into their first home, or a larger home, adjustable rates are getting popular again, dropping the first few years payments. Or buying a smaller home than planned. Or a little further away from your dream location. Or older finishes than you prefer. Or unfinished basement. Or buying in the late fall and winter when competition is lower. Once you are in a home and building equity, it is easier to transfer that into a bigger/ better house in the future. My first house was $59,000 many years ago (3.5% down payment with 8.5% interest). Sold it at $82,000 and bought $143,000 (10% down at 6.5%), which is now worth 2 to 3 times more (refinanced at 3% and almost paid off), even with the 2008 crash in between. While it is harder to predict what will happen to home prices short term, it is very predictable long term.  

Here is an update on current real estate sales activity in STL, all prices, existing single family and condo as of yesterday. I have found this statistic shows the most current state of the market, as it will quickly indicate dropping or rising sales and supply, and hence the direction of the market:

  • Manchester has 10 homes available and 28 under contract
  • Ballwin has 29 homes available and 37 under contract
  • Kirkwood has 31 homes available and 46 under contract
  • St Peters has 42 homes available and 73 under contract
  • Arnold has 18 homes available and 37 under contract
  • Florissant has 70 homes available and 97 under contract

The ratios run from 1.3 to 2.8 pending sales for every 1 available. Adding the total of these 6 areas is 1.6 to 1. My last comparison in mid Sept was 2.1 to 1 (and 2.8 to 1 in late June) with the total number of homes in both categories down again, from 529 to 518. That indicates a continuing slow down in the STL market, with the pending ratio ticking down into Oct, with total supply also ticking down. This is a solid trend, as we are well into fall, and the holidays start in 6 weeks. Manchester strengthened a bit, while the others softened. With mortgage rates continuing their climb, and continuing talk of a forced economic slowdown, I believe this is having a negative affect on the STL housing market, although I do believe it is short term, and that makes it a good time for buyers over the next 4 months, if they can adjust to the mortgage rates. 

Happy Fall!