Buying a Foreclosure in St Louis

Buying a Foreclosure in St LouisBuying a Foreclosure in St Louis

Whether you are looking for your next investment property or a primary residence, buying a foreclosure is a smart idea.  Mortgage rates are at an all-time low and a foreclosure gives you the chance to make your home buying dollars stretch further.  If you are an investor then you probably already know the value of a foreclosure, in and around St Louis you can save anywhere from 20-50% on the value of a home.  As an investor you can recoup your investment pretty quickly.

Finding Foreclosures

While there are St Louis residents that inevitably lose their homes to foreclosure, the city fares better than most in the number of foreclosures.  The city is in much better shape than many other cities in the country.  Missouri is 33rd when it comes to the number of foreclosures but that number is down over the previous year.  That is because home prices are up and their economy is in pretty good shape.  Since 2008 and the housing bubble bursting lenders have worked harder to keep people in their homes rather than pursuing foreclosure.

Finding foreclosed homes is a bit more difficult than looking for regular listings, competition is fierce especially in a seller’s market like St Louis.  That doesn’t mean it is impossible but first you should find a realtor that specializes in these types of homes.   A good realtor can have the inside track on homes that are about to come up for foreclosures.  At the same time you need to look for properties on your own as well, here is how you do that.

Foreclosure Facts

The city of St Louis has roughly 3 million people and on average 200 homes are foreclosed on each and every month.  The average home price in the county is $117,000 and foreclosure savings is somewhere between 20-50% so you can save anywhere between $20, 000 to $50,000 on your next property.  However it is not quite that simple.  Foreclosures are sold “as is” and it is entirely possible that you won’t even be able to look inside the property before it gets auctioned off.  You have to consider that not everyone defaults on their mortgage because they can’t afford the payments, some will default because they can’t afford the repair costs.  You can end up buying a great piece of property or you can end up with a house that needs extensive repairs.

Foreclosures can make for some very good deals, in St Louis several hundred foreclosures come on the market every month.  Keep your eyes peeled for your next great deal.

The Hot Real Estate Market in St Louis

If you’re looking for some investment property in St Louis then you should know that it is one of the hottest real estate markets in the country.  Prices have been climbing steadily across the region for a couple of years and finding a good deal is harder than ever.  That being said if you can snag yourself a decent property you’re almost guaranteed a great return.  But it’s not that easy, inventory is low while prices climb. There are still some great deals in St Louis but you need to have some great agents to help you find them

Rising Prices

The median home price in St Louis is up roughly over 5% from last year’s figures and that is trend that has been ongoing for some time.  If you got into the St Louis market early then you’re probably sitting on a nice portfolio right now.  With mortgage rates still sitting at an all-time low this makes for more buyers than inventory.  First time home buyers are having a hard time finding a home.

Less Inventory

There is far less inventory available making St Louis a seller’s market.  The amount of active listings is down almost 20% from the previous years and the average time on market is roughly 30 days.  To have a balanced inventory of houses for sale you need roughly six months’ worth of inventory yet St Louis has have that.  This lack of inventory will keep driving the prices up.  If you want to invest in St Louis you need to be a pretty shrewd deal maker.

The Local Economy

For years St Louis saw little or no job growth and that kept the housing market from being the powerhouse that it is today.  That has changed in recent years and the job growth situation is much brighter.  If you take a look at the stats put out by Glassdoor, one of the world’s biggest recruiting sites, then you can see that St Louis hit #2 spot (second only to Pittsburgh) as one of the best cities in the country to look for a job.  That in turn has fueled the city’s growth including the housing market.

What does all of that mean for a St Louis investor?  It means you have to look very carefully to find a good deal, though there are still some to be had.  Expect houses to sell above the asking prices and in some cases you may find yourself in the middle of a bidding war.  If you are looking to liquidate your assets in St Louis you won’t find a better time to do so than now.