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CommentLocal housing trends offer good news, bad
news
Permits are up, but other problems
persist
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Buying
or building a house in the St. Louis area, including North County, may never be
the same, given the economic downturn that has greatly affected the housing
industry.
The realization is emerging that the area, like the nation, is
entering a brave new world where previous assumptions about everything from the
kind of housing people want to how housing is financed, built and sold are up in
the air.
Several local housing authorities recently discussed current
housing trends, which appear to be a mix of good and bad news, during a seminar
at St. Louis Community at Florissant Valley, sponsored by North County
Inc.
The good news is that there are positive indicators for home
building in the area and in North County.
An increase in housing permits
began in May. However, the number of housing permits expected to be issued in
the region this year - a little over 3,000 - is far below the nearly 10,000
issued annually from the late 1980s until the middle of this decade.
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"We feel like we're seeing the bottom of the St. Louis
market," said Joe Zanola, president of the Zanola Co., a market research firm
that examines housing issues in 10 counties in Missouri and Illinois.
But
Zanola cautioned that the area home building industry would not return to what
it was in the middle of this decade. He said financial institutions are not
financing the kind of new housing developments that once were common. And the
economic downturn has devastated the ranks of home builders, many of them now
out of business, he said.
The region also has a large inventory of
building lots - 34,840 - that remain undeveloped and will take as long as 10
years to work through. Zanola said as many as a half of those lots may not lend
themselves to the type of homes buyers want in the future.
Over the last
few decades, builders built larger homes geared toward families.
"If you
had a family with an SUV and pets, there was an endless supply of that kind of
house," Zanola said.
But in recent years, as the region's population has
aged, there has been an increase in the number of single and two-family
households and a demand for lower-priced housing in the $175,000 range, he
said.
The aging population is apparent in North County, said Mark Tranel,
director of the University of Missouri-St. Louis Public Policy Research
Center.
Tranel said North County has a large "aging in place" population
as well as an aging housing stock. Tranel said municipalities may have to look
at issues such as modifying homes to add space, neighborhood outreach and
maintaining mixed-generation communities. They may have to evaluate housing
options such as senior retirement communities, seniors-only apartments, housing
units with a separate entrance for older adults on the same single-family lot,
or shared housing where seniors share their home with a roommate.
Another
disturbing issue is the continuance of foreclosures.
Mike Duncan,
research manager for St. Louis County, said foreclosures reached a record 4,205
in 2008 and started to drop each month earlier this year. However, in June,
foreclosures started to rise again. They may continue to increase due to rising
unemployment, he said.
Duncan said 75 percent of foreclosures in the
county have occurred in North County.
Rory Schwartz, vice president of
Prudential Patterson Realtors, said low appraisals of homes and a tightening of
credit also have affected sales. Yet there are opportunities that didn't exist
before for home buyers, particularly an $8,000 tax credit for first-time buyers
or buyers who want a larger home.
"There is no better opportunity to buy
than right now, no better time to invest than right now," Schwartz said. "North
County needs to come together and go out and buy them."
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