What a joke! A buyer's market.....who knew?
Back in the 2nd grade, we all learned how to add and subtract. That is all we will ever need to determine the type of housing market in a given area. Take the number of available units, subtract the number of buyer's in the market, if the number is zero, we have a neutral market, if the number is positive then we have a buyer's market, negative...a seller's market.
That may be a slight oversimplification.
In reality, looking at that simple formula the loft district has probably always been a buyer's market. It is the greatest neighborhood expansion within the city of St. Louis since the 1940's. In the past two years, if you consider pre-construction, there has never been a period when buyer's have outnumbered the available units on the market.
Having said all this, what does all this mean to the person buying or selling today. Have lofts started to depreciate?
Thanks to the national media, the perception exists that all you poor saps selling a home today will practically give your place away. Buyer's are coming into the market expecting greater than 10% off the price of lofts.
Of course, if a loft is overpriced by 10%, which is not at all hard to find, then maybe we will see that type of drop. If you sell with an agent that understands the way of pricing lofts and ALL the factors--square footage, number of windows, parking, finishes, comparable sales--the whole tamale, then you shouldn't have to drop your price by more than a few percent.
In all the loft re-sales since July 1, only one loft has sold for more than 10% off its asking price--and considering it was only on the market for 30 days I was
shocked. The average percentage of asking price that buyer's paid from 7/1 through 9/1 is 97.26%. I doubt that figure differs much from the average for the super hot year of 2005.
What's the final assessment? Are we seeing lots of buyer's starting to swarm the market getting decent deals? Hardly. What I've seen is a lot of buyer's walking away from good opportunities due to unreasonably high expectations of what the buyer's market means.