Monday, May 14, 2007
Dear Young Professional,
"I have a question for you - I'm a "young professional," as we are often called, and am considering buying a loft downtown. My main concern is that if I want to sell the place in a few years in exchange for a place in the burbs, there won't be a market for it with all the new lofts that are being developed and the limited sales at this point in time. As the closest thing to a resident expert, what are your thoughts?"
My thoughts are varied. First of all, the fear that downtown St. Louis will be developed beyond sustainable population levels is a misconception. Downtown development is market driven. While the real estate market has been slower in the past year, most developments that have offered a good product for a reasonable price have continued to sell. Developments that are over-priced or lack certain features have struggled. My primary thought is BUY SMART! A good value will hold up regardless of what the market is doing.
My second thought, as a real estate professional, is that home ownership of any kind generally doesn't usually yield a positive return on investment within just a couple years. Our lofts have been an exception to that general rule for the past few years, particularly if they are purchased as "pre-construction." The only problem in that scheme is that most 1st time buyer's are wanting to buy to have a place to live and can't wait the year plus time frame for a pre-construction building to be completed.
Overall, my thought may seem biased, but work with a specialist (buyer's agent). The development companies that build lofts almost always have a sales force that is more than willing to assist you in buying THEIR product from start to finish. A skilled Realtor will usually expose a buyer to all possibilities downtown including new construction. This is free, and as a process, it seems to educate the buyer about the entire market. I generally listen to a buyer and really try to get them to evaluate all areas too. We've worked with potential loft buyer's that end up using us to buy homes in St. Charles or elsewhere in the St. Louis area. Sometimes prospective buyer's decide that renting for another year will work.
Lastly, after living downtown, the thought of trading a loft for a place in the 'burbs will make you nauseous. You'll probably decide on a house in one of the other fantastic city neighborhoods instead.