Business World

This spring was kinder to the St. Louis housing market, and sales are starting to pick up.

But just a little. There’s a long way to go before things reach full bloom.

Sales of existing houses in the 11-county St. Louis region reached their highest level in eight months, according to data compiled by the Post-Dispatch. That echoes national figures released Tuesday by the National Association of Realtors showing the second straight month of increased sales and spurring hopes that the housing market has at least hit bottom.

Still, sales are well below last year’s figures, and median prices continue to slide as bargain-hunters snap up deals.
Market-watchers report a spike in interest from first-time house buyers, lured by low interest rates and the government’s $8,000 tax credit. Yet that isn’t translating into more sales at higher price points as many homeowners are choosing to stay put rather than buy something more expensive.

Until that changes, it’s hard to see the housing market gaining much ground, said Geoff Hewings, a professor of regional economics at the University of Illinois.

"The modest recovery in housing prices and sales has been constrained by job losses in the economy as a whole," he said. "A sustained housing recovery is still not in sight."

Still, there’s more activity, said Al Suguitan, president of the Greater Gateway Association of Realtors in Glen Carbon. More houses are being listed. More people are coming to open houses. More contracts are pending health insurance. But that’s typical for this time of year, and it’s hard to know what it signals.

"It’s kind of a mixed bag right now," he said. "We’re right in the middle of the activity, so we can’t really see what’s happening around us."

St. Louis appears to be lagging the nation as a whole. Sales here fell 16 percent from May of last year, compared to 3.6 percent nationwide, according to the National Association of Realtors. Prices, however, fell less sharply, down 10 percent or less in most local counties and 16.8 percent nationwide.

The strongest large county in the region remains St. Charles, where sales were off just 6.2 percent year over year.

Joe Sahrmann, an agent with Coldwell Banker Gundaker in St. Charles, says his office actually has seen sales increase over the last year, and has had a strong May and June. Buyers, he said, are more confident. "People were waiting to buy, and they didn’t know why they were waiting."

That confidence bodes well. But it’s fragile, economists say. If unemployment keeps climbing, it could sideline more potential buyers. The same holds true for interest rates, which have crept up in recent weeks, though they remain low by historical standards.

The Associated Press contributed to this report.

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