Lofts In The 'Lou

Wednesday, March 05, 2008

Shop Downtown!

Right now there's an underlying competition going on. It's been going on for a while now.

In April 2006, the previously slated "Ballpark Village" plans were unveiled. Bill DeWitt III of the Cardinals and Chase Martin of Cordish explained a new city center with entertainment and upscale shopping. "National Brands" without a presence in St. Louis would be there. It would be a thriving part of the revitalized downtown-a destination point for shoppers. Sounds good.

Last year, John Steffen and the Pyramid Crew came up with a similar sounding plan, Mercantile Exchange. At the lunch meeting promoting the project, it was described as a mix between local independent stores and national brands with entertainment and free parking. A very impressive plan, but I couldn't help but draw parallels with Ballpark Village.

Shopping Downtown is how it should be. For years, downtown was the focal point for local area shoppers. Generations of St. Louisan's remember big shopping trips in downtown. St. Louis was a relevant major city then.Enter suburban sprawl, overall decline of downtown and the major shopping mall. Most attempts (St. Louis Centre) to reverse the trend were unsuccessful. Many argue that St. Louis Centre's attempt to bring suburbia into the inner city was what killed it. It's overall lack of authenticity.

Now, the building blocks are in place. Downtown is growing. People really want to be here to live work and play. They are wanting the services and opportunities that Ballpark Village and the Mercantile Exchange will offer.

Who could possibly screw this up? Enter in City Government.

OK, so nothing has happened yet. But in an article in today's Post, it describes a clandestine real estate acquisition by the city that city development leaders have planned for a new shopping center. As Rodney Crimm (viewed above at the Lee J's expansion ribbon cutting) put it, so residents can shop in the City instead of going to the county. It cites the projects location, having good interstate access between 40/64 and 44 (doesn't downtown have good enough highway access?)

The thing that is disturbing is not that downtown projects have competition. Obviously we live in a society where competition is a central paradigm. What is frustrating is that this appears to be a project not born out of free enterprise, but some secret deal between the city and MSD that no one seems to be asking for. Why should bureaucracy compete with free enterprise? As Mr. Crimm puts it, to compete for the tax dollars that are lost to the county. Why can't the city just work hard to be a great city and stop trying to be a suburban knock-off?

St. Louisan's are ready for a "5th Avenue" (New York) or "magnificent mile" (Chicago); an authentic urban shopping area. We just have to be ourselves and work to build our great city.

Monday, March 03, 2008

Anti-Frigid Sales

So the winter months aren't supposed to be the ideal time for home shopping. Winter was over this weekend when almost 30 people came to our open house, but now winter must be back.

That could really be ok.

This year the real estate market was alive and well during the winter months. The market has changed, buyer's are more savvy and demanding. Writing an offer doesn't always mean a buyer is committed to a property. Things are different but they keep moving forward. Looking at properties under contract, it appears that seller's are allowing buyer's to extend closing dates for longer periods. Much of the winter activity still has yet to officially close.

The Syndicate has started move ins since the beginning of the year. While those sales weren't all included in the MLS, it's great to see a long dormant building with a new life.

Here are the Downtown St. Louis Loft Sales for January and February 2008.

210 N 17th St #309----------------------------------------------------79,900
210 N 17th St #307----------------------------------------------------81,200
1501 Locust St #902--------------------------------------------------125,000
210 N 17th St #305---------------------------------------------------126,100
1511 Locust #104-----------------------------------------------------160,000
2201 Washington Ave #504---------------------------------------------164,600
1709 Washington Ave #801---------------------------------------------165,000
901 Washington Ave #508----------------------------------------------195,000
314 N Broadway #1704-------------------------------------------------199,900
1015 Washington Ave #301---------------------------------------------213,436
2201 Locust St #305--------------------------------------------------222,000
1123 Washington Ave #707---------------------------------------------232,500
1015 Washington Ave #403---------------------------------------------240,900
1015 Washington Ave #501---------------------------------------------243,153
1136 Washington Ave #605---------------------------------------------260,000
315 N 11th St #801---------------------------------------------------270,000
901 Washington Ave #607----------------------------------------------272,000
1015 Washington Ave #406---------------------------------------------273,600
400 S 14th St #1115 -------------------------------------------------535,000

Saturday, March 01, 2008

Got Financing?

A lot has been said about the state of credit in the past 6 months.

Too much.

In the past weeks, two people have mentioned to me that it's impossible to get a loan these days.

What do those two people have in common? Do they have bad credit? A recent foreclosure? No income?

No, no, and no. They are simply not looking to buy a place.

It's been stunning to hear that the public perception out of all the negative hype is that people are unable to buy; which couldn't be further than the truth.

The credit crunch is doing something good for the financing markets. It's making them more honest and appropriate. It's making the true professionals in the business stand out from the charlatans.

Financing lofts has always been a bit tricky. Many loan officers or brokers do loans on condos only on occasion. Being able to correctly choose a good lending program for a specific loft is a serious matter. Back in 2005, we posted on what a Warrantable and Non-Warrantable loft was and how it can affect financing . One aspect to downtown lofts that isn't typical to most condo associations is that the association shares it's space with commercial or retail entities. Sometimes that excludes some lending options. When we've had problems with lenders unable to finance a condo for any reason, a good lender has been able to pick up the ball and get the deal done.

Looking to buy? Contact a realtor to find a home. Looking for a good professional lender--ask the realtor.

Sunday, February 10, 2008

WECAR- DOWNTOWN CAR SHARING

One of the most desirable features of living in a neighborhood like Downtown St. Louis is the ability to walk or take public transportation to many destinations. However, in modern society everyone needs to use a car from time to time. Now there is a solution for people who don’t want own car, but want to have access to one for certain specialized functions such as large grocery purchases, a trip to the country, or driving to visit a friend in the far suburbs.
The Downtown St. Louis Partnership and St. Louis Car Sharing Cooperative* invite you to attend the official launching and ribbon cutting for WeCar in downtown St. Louis. WeCar, a program of Enterprise Rent-A-Car, is a convenient, environmentally friendly car sharing program that is a great alternative for those wanting to reduce reliance on a personal automobile. WeCar is a membership-based program with nine downtown locations.
When/Where
Tuesday, February 12, 2008
at 11:30 am

Metropolitan Square
(211 North Broadway)
Corner of 6th & Pine Streets
Who

Mayor Francis Slay, City of St. Louis
Larry Williams, Treasurer, City of St. Louis
Phyllis Young, Alderwoman 7th Ward, City of St. Louis
Kacie Starr Triplett, Alderwoman 6th Ward, City of St. Louis
Sarah Stewart, Lawrence Group, Program Supporter/Car User

Tony Moise, Vice President & General Manager, Enterprise Rent-A-Car

Tom Shrout, Executive Director, Citizens for Modern Transit
To RSVP, click here.
(Vehicle demonstrations will be held by WeCar representatives)

*The St. Louis Car Sharing Cooperative is a collaboration of downtown WeCar sponsors including: Citizens for Modern Transit; Pyramid - Spinnaker, LLC; LoftWorks; The Syndicate; Trivers Architects; Lawrence Group 1, Inc.; and the Downtown St. Louis Community Improvement District.

Saturday, February 09, 2008

New York Style.....coming right up!

restaurant developments downtown St. Louis

Last year around this time, a gentleman with big plans to open up a New York style pizzaria with a totally unique style discussed his vision with me at a loft showing. This weeks St. Louis Business Journal mentioned it in the Shoptalk section. Scheduled to open up April 1, the location will be at 1131 Washington. That seems to be in the Washington Avenue Apartments building or next door to the Flamingo Bowl. Earlier talks of a 24 hour diner located at that location sounded great too. Having both would really be awesome.

The most attractive part of the concept is that the new pizzaria will sell a good amount of "pizza by the slice." Having a place that caters to the immense amount of foot traffic on Tucker and Washington will be a phenomenal success as well as a benefit to the area.

Monday, January 28, 2008

Adapting to the Real Estate Boom

Since the real estate market has begun its decent, we hear a good deal about what went wrong, who is to blame, etc. What some forget is that between 1998-2005, most areas had a real estate boom. This boom had an affect on the public perception about real estate. How we adapted to the boom is one small part of the problem, and its lingering effects are what home sellers and agents must contend with today. The list below describes a few observations on assumptions that the general public seems to have as a result of the boom years.

1. Real Estate Appraised Values are Genuine

Many homeowners refinanced or set up credit lines based on equity during the boom. Anyone that pulled equity out in the form of this type of loan has to remember that the so called equity was based on appraisals in a boom market. Additionally, they are assuming that the appraisal was an actual estimate of value. In many cases, these appraisals had more to do with what the home needed to appraise at to make the refinance deal possible. Placing the monetary incentive on the loan officer to make the deal happen was usually transferred directly to the appraiser. After all, how many lenders would re-use an appraiser that cost them a deal? All and all, even an honest appraisal is just that, an estimate of what someone would pay for a property. True value is better determined when a property is actually placed on the market and sold.

2. Financing is a non issue

Ok, most buyer's can get financing. The changes to the lending industry aren't as extreme as the headlines might indicate. But subtle changes have occured that will continue to affect buyer behavior. Public perception prior to the year 2000 was that if one were to purchase a home, they would need a downpayment. What?!?#@! A downpayment? Buyer's in the past 5 years have often times purchased only if they could do so with no money down, with sellers ponying up for a bulk of closing costs. Now, even asking a buyer to come up with 5% can make a big difference in what they can afford. Additionally, sellers of properties in excess of $417,000 are seeing that buyer's are having more difficulties obtaining this type of JUMBO financing. Additionally, the cost has gone up on JUMBO loans, increasing the payments and giving buyer's reasons to avoid this price range now.

3. Real Estate is Liquid

Before the real estate market boom, people seemed to have more respect for buying a home, including realtors. As prices rose and investors jumped into the market with zest, it seemed that everyone thought that buying suddenly became a no-brainer. Some buyer's purchased without knowing or accepting the risk. Some bought badly--buying in areas where the developers were saturating the market. Some people needing to resell in this down market are finding out fast that the person who happily signed them up is their #1 competition; still selling at builder pricing and sometimes undercutting the re-sale prices to move inventory.

The biggest problem with this topic is that people think they can buy and then sell almost immediately and still make a profit. This could happen during the boom, but is less likely to happen today. Sometimes it appears that new homeowners have adopted the assumption that real estate is liquid; which is true if a purchase is made at a undermarket price. Unfortunately for many, the purchases made during the tail end of a real estate boom aren't made undermarket.

The good thing, and one not to forget, is that Rome wasn't built in a day, and the renaissance in Downtown St. Louis continues to move forward block by block.

Reaching Out to Fellow Residents

When the Blues moved to the Scottrade Center downtown, it seemed like a good thing. Memories of the games at the Old Barn were fond, but state of the art it was not. The past few years, breaking our streak of consecutive playoff berths and the strike seemed to greatly diminish interest from the community at large, so the Blues front office has gotten aggressive.

One thing that makes sense is to reach out to the growing downtown population. So that's what they're doing.

Feb. 1 is the first ever "Downtown St. Louis Resident's Night" at the Scottrade Center. And if the hockey game isn't enough of a contest, the additional contest between buildings to see who can bring the most support is an additional incentive to show up. See the attached file for the specifics. See you at the game!Blues%20Downtown%20Residents%20Night.pdf blues%20residents%20night%2001%2008.pdf

Friday, January 25, 2008

To Forget or Not to Forget 2007

For the typical real estate professional, 2007 was like getting bashed in the face with a baseball bat. "Business as usual" took a much needed hit.

For years it seemed like certain things were happening that deviated from normal real estate and historical practice. Double digit appreciation was one thing. 100% financing for just about anyone was another. Things were happening for years that didn't really make much sense, and people were getting pretty comforatble with it.

One thing that hasn't been derailed by the housing and credit slump of 2007 was growth in the fantastic downtown neighborhood. This past year more than any, the actual sales were much greater than what my data source, the Multiple Listing Service, shows. The new "thing" for some developer's is to list only the model type and provide no record of sales in the MLS despite using the system to promote the buildings. Since all prior years are based on the MLS, it made sense to continue with this data.

Year--#Sold-------$/Sq Ft----Ave.Days on Market-------Ave.Price
2007----178-----------$186-----------------181-----------------$240,252
2006----221-----------$164-----------------93------------------$223,063
2005-----121----------$156-----------------209-----------------$256,678
2004------84----------$141-----------------233-----------------$187,976
2003------53----------$135-----------------170-----------------$214,890
2002------25----------$121-----------------248-----------------$186,674
2001------19----------$104-----------------194-----------------$233,908

While the sensationalism by journalists continues, looking at the "big picture" of our downtown growth is encouraging. One additional plus in looking at this material is that there are a few large buildings that are early in the completion phase with buyer's set to move into downtown. Interest rates have continued to stay low with this weeks average mortgage rate hiting a 4 year low.

Pages