St. Louis Housing Market: Popular Locale for First-Time Home Buyers

Across the country, young renters are hesitating to enter the housing market.

According to the National Association of Realtors’ annual profile of buyers and sellers, 36 percent of people who bought homes in the year ending in June 2006 were first-time home buyers, down from 40 percent the previous year.

However, as has been the case time and again, national trends don’t necessarily mirror what’s happening in St. Louis Local experts say factors affecting first-time buyers - all buyers, really - in some parts of the country are not present in the St. Louis real estate market.

“You can’t compare St. Louis to California, Las Vegas or southern Florida,” said John Williams, president-elect of the St. Louis Association of Realtors and a broker with M.O.R.E. (Missouri Online Real Estate).

“As the recent real estate boom has declined, investors have sold properties in these and other areas of speculation, thereby dampening their local real estate markets overall. It gave people the impression that this was happening across the country, but that’s not the case.”

Williams, who has been working in the St. Louis real estate market for 23 years, noted that the affordability index during the last couple of years has been lower, a fact that may have discouraged first-time buyers from applying for home mortgages on a national scale.

But he said the affordability trend has changed.

“Selling prices (locally) have been dropping, and this past summer there was an upturn in the affordability index on a national level. That, combined with attractive [mortgage rates], has made the housing market more affordable again,” Williams said.

According to the NAR, the median sale price of existing single-family homes in the St. Louis region in third quarter in 2006 was $154,400. That compares with a median sale price of $224,900 for existing homes nationally.

David Griege, executive vice president and owner of Paramount Mortgage Co. in St. Louis, said the various mortgage loan financing options available through lenders have eased first-time buyers’ entry into the housing market.

“There are more financing programs available now than ever before that require little or no money down. It’s one of the reasons why national homeownership is about 70 percent,” he said.