Sept. 27--Real estate agents are happy people these days. Sales are up a lot. Home prices are up at least a little in most neighborhoods. A rise in mortgage interest rates this spring may have taken a bite out of sales of lower-priced houses, but sales of upscale homes are strong.
That means bigger commissions for real estate sales people.
"It's fun to come into the office," said Norm Polsky, broker at Coldwell Banker Premier in Maplewood.
Overall, estimated home value are rising in metropolitan St. Louis, although it is unclear how much. Zillow, the real estate website, estimates that the median value of all homes as of August was up 1.7 percent from a year earlier. Using a different calculation method, CoreLogic says the overall value of local homes was up 5.7 percent as of July.
The Federal Housing Finance Agency, using somewhat older figures and actual sales prices, says prices here were up 1.8 percent over the year as of last spring.
Those regionwide figures disguise a big variation by neighborhood. Zillow, for instance, reports estimated home values were up 8 percent over the year in Kirkwood, but down 6.7 percent in Florissant and down 6.8 percent in Belleville.
Sales are recovering nicely. In St. Louis County, 8,476 homes sold in the first eight months of this year, the most since 2007; this figure is up 12 percent this year. Sales are up 10 percent in the city of St. Louis, 22 percent in St. Charles County, 15 percent in Jefferson County, up 5 percent in Monroe County and up 18 percent in St. Clair County. Only Madison County showed a decline, a slight 3 percent.
RATE IMPACT UNCLEAR
Mortgage rates jumped by more than a percentage point in May and June and 30-year loans were averaging 4.32 percent this week. Realtors worried that higher rates would clip sales, but the effect has been hard to sort out.
Real estate sales rise and fall with the weather, so sales in one month are usually compared to the same month a year earlier. In St. Louis County sales that closed in August were up 11 percent from the previous August. Most of those contracts would have been signed after rates rose.
Realtors say the rate increase seems to be hitting the low end of the market -- houses priced $100,000 and under. So far this year, sales of such homes are down 17 percent at Coldwell Banker Gundaker, one of the largest real estate firms in St.Louis.
Young people stretching to buy their first homes are the most likely to be frozen out by higher monthly payments brought on by higher interest rates.
"It's not just the rates. Credit is very tight," said Jim Dohr, president of Coldwell Banker Gundaker in St. Louis. Compared to pre-recession years, lenders want higher credit scores and better income to qualify for the best mortgage rates.
National figures show first-time buyers in retreat. Traditionally, they make up 40 percent of buyers. But they were only 29 percent in July and just 28 percent in August, Dohr said. In many cases, the lenders are demanding more than the minimum credit score acceptable to the big federally controlled agencies that guarantee mortgage bonds.
By contrast, upper-end housing is doing fine. Sales at Coldwell Banker Gundaker are up more than 20 percent for houses priced over $200,000. Upper income buyers worry less about monthly payments.
The middle market -- $100,000 to $150,000 -- is flat.
Sales of more expensive homes mean fatter commissions, which make for good times for agents in upscale neighborhoods. Agents at Prudential Alliance Realtors sold $267 million in property in June, July and August, compared with $224 million last summer, meaning a fat increase in commissions.
"The upper end of the market has been very strong through this year," said broker-owner Bob Bax.
The foreclosure mess is still affecting prices in neighborhoods with lots of hard-pressed homeowners.
Foreclosed homes made up 8 percent of sales in the metro area in August, up from 6 percent a year ago, according to the online foreclosure market RealtyTrac. Short sales -- those for less than the amount of the mortgage -- made up 9 percent of the market, up from 5 percent.
Such homes sell cheap and are often bought by landlords planning to put them up for rent. Landlords and flipper-rehabbers bought 17 percent of homes sold last month, up from 10 percent a year earlier, according to RealtyTrac.
Foreclosures hold down prices in a neighborhood. But such pressure should begin to ease as actual foreclosures wane. As of July, 1.07 percent of home mortgages in metro St. Louis were in foreclosure, down from 1.67 percent a year earlier, according to the real estate analysis firm CoreLogic. That indicates fewer foreclosures in the pipeline.