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September 12, 2006

Adaptive Re-use on Kingshighway

I was coming home from running errands today and noticed an exciting event: the adaptive re-use of an abandoned fast food chain's building on Kingshighway near Oleatha (formerly Long John Silver's). The building quickly became unsightly after closing just a couple months earlier this year, so I'm excited to see that it didn't have to sit vacant too long before someone grabbed it!

Apparently, a new business is taking over and is reshaping the facade and creating a new home for itself. It's going to be a bakery!

Very exciting... now I have a coffee stop AND a place to find a donut to dunk in it all within walking distance of my abode. Scary stuff... :)

One REALTOR's view on the market 'hype'...

So, I'm starting to get frustrated with the media. My profession as a Real Estate Salesperson is, apparently, very easily affected by what (I feel) is starting to become 'sensationalized hype' in the media. And even in "little old Saint Louis", the national news of market trends in NEW YORK and in LOS ANGELES is tainting the mindsets of the would-be (and currently-are) property owners in Saint Louis.

The whole idea of a "marketplace" is all about psychology. Honestly. Let's think about it: the stock market... remember back to pre-tanking of the tech stocks? It was built up on people putting faith in something... believing that it is strong, and worthy of their investment. Then, corporate fraud and changes in regulation come about and everyone runs scared and yanks their investments out of the "unsafe stock market". Where did alot of that go? Yep -- into the real estate market, I'll bet. Had to be. They "believed" in that more than the stock market after getting hurt. Now people are fearing that 'hurt' in the real estate arena and are beginning to panic.

I fear that we're going to cause a collapse of the real estate market UPON OURSELVES if we are not careful! Let's look at the facts and then analyze the psychology behind it.

The current average interest rate for a 30-year conventional loan product is hovering around 6.5-7%. While I will TOTALLY AGREE that we don't have it as good as we did about 2 years ago, that does not mean that the well has run dry and that we're in for a major drought! In fact, if you look at the history of interest rates (especially pertaining to mortgage interest rates), you will discover that our CURRENT MARKET INTEREST RATE conditions are still exceptionally low! Now is a GREAT time to buy, not get scared adn start getting gunshy... we all need a place to live and if you gamble that if you wait, conditions will get better, chance are you'll kick yourself even harder in a year when rates are back at a more NORMAL 7.5-8%!

While I wish one of us could get ahold of that genie in a bottle (I'd gladly volunteer) and get one wish -- the wish to be clairvoyant -- to see into the future, to have that crystal ball. I don't have that power, and market conditions could change drastically tomorrow. But the more scared we get as investors (buyers), and the more we allow ourselves to be affected by the sensationalized conditions and trends in the media, the bigger long-term impact we'll have on ourselves! We'll cause it on ourselves!

Bottom line -- I believe that this "buzz" out there about the looming "real estate bubble burst" is full of misconceptions. The often-mentioned housing market bubble is a myth. Every market has corrections and our Saint Louis real estate market is no exception. Let’s dismiss some of these misconceptions, one at a time...

1) First, real estate has not declined due to rising mortgage rates. In fact, most 30-year mortgage rates are still under 6.5%, and lenders are still offering great deals on adjustable-rate mortgages and refinancing.
2) there has not been a “collapse” in real estate housing prices, as the doomsayers are sensationalizing. The problem is declining sales, not declining prices. As a matter of fact, average real estate prices may continue to rise here in the Midwest. The housing market has slowed for one simple reason: Prices are simply too high for most investors (buyers) to find great buys in the housing market, especially the NEW housing market. However, considering a crash is probably a far fetched assumption and completely pessimistic. Some markets will correct but most will not crash and all of this will produce terrific buying opportunities as the amateur investors and overpriced developers are flushed out.
3) there is also a problem within the Saint Louis market, specifically, with a "critical mass" issue. We continue to build and build and built, while our internal population of potential homeowners do not rise. We are not actively attracting new, large businesses to our market that would bring along with them increases in population to fill and purchase these new housing units.

All in all, I hope this posting is taken off-the-cuff, and that again -- without the crystal ball, no one can predict what might happen tomorrow, or next week, or next year. But if we all fall into this sensationalized 'hype' that is plaguaging the media, we'll start to BELIEVE it.

How does the cliché go? Oh yeah... what you BELIEVE you can ACHIEVE. So get out there and take advantage of the market conditions -- purchase that investment property and use your streghts as a buyer in a looming buyer's market to capitalize on the opportunities out there, and revel in it in the future. :)

Welcome to CityBoy's weblog...

Well, the time has come... I've avoided writing down my thoughts long enough. Too often I find myself sharing a (somewhat) profound thought with a friend over some curry at King and I, or telling a former client about the happenings in or around their property -- and then I realized, why not share it with more people!

Thus, PRESTO! It is born. While I know my musings won't be nearly as educated or profound as those of other local urbanites who I highly respect (www.urbanreviewstl.com, for example), nonetheless, perhaps I will find a small following who will banter with me and share info or correct me when I'm in the wrong!

Looking forward to this new medium to connect with those out there in the Saint Louis City community!