Jacob said while home prices hit their highest levels in 31 months on a national basis, St. Louis may be running at a slower, more steady pace.
FOR IMMEDIATE RELEASE
St. Louis Real Estate Attorney Marc Jacob, principal of Home Sweet Legal® (“HSL”), which is designed to provide free legal protection for homebuyers and sellers who qualify, and guide them through the maze of contractual and legal issues of purchasing and selling a home, said today’s just released S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices, indicates while home prices hit their highest levels in 31 months on a national basis, St. Louis may be running at a slower, more steady pace.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.9% annual gain in January, up from 5.7% last month and setting a 31-month high. The 10-City Composite posted a 5.1% annual increase, up from 4.8% the previous month. The 20-City Composite reported a year-over-year gain of 5.7%, up from 5.5% in December. St. Louis is not a city included in the index.
“The Index is showing us that the past couple of years represent a turn around for home prices nationally with a 5.9% increase, and they continue to rise despite a modest increase in interest rates. We should bear in mind, however, that the St. Louis market is included only via overall census track data and is not part of the 20-City Composite Index. The Midwestern city perhaps most like St. Louis that is in the index, Cleveland, experienced more modest growth of 3.9% in home prices, and this is the sort of slow, healthy growth the St. Louis market should be seeking,” Jacob said.
“As the report also seems to make clear, though, prices are rising faster than people can afford and this will result in a re-set and decline in sale prices at some point unless incomes start rising faster. There may be many people who bought during the height of the market in 2006-2007 who need prices to get back up to the winter 2007 levels they just reached, or better, just to break even on their homes. High peaks and low valleys in home sale prices are not good for consumers, who see their homes and long term investments, and the savvy home buyer in a high-growth city might consider his or her options prior to jumping into a market that may be rising too quickly to be sustainable.”
“St. Louisans should keep in mind the index’s applicability to our specific market is less direct, and the small to mid-sized Midwest cities generally lags behind in housing growth. The report itself indicates that housing prices in the lower pricing tier are still the most volatile, resulting in the those of us most at risk financially being the ones to take the biggest risk personally when purchasing a home; and as reported in The St. Louis Business Journal on March 23rd, 2017, the St. Louis area’s population is not growing, with both the City and the County experiencing population declines according to the U.S. Census Bureau. This information should bring a dose of reality to a marketplace that might otherwise inflate prices further to the long-term detriment of consumers and our region’s economy.”
Jacob, also Managing Partner of The Jacob Law Firm LLC in Clayton, MO, has been practicing real estate law since 2006 and been licensed since 2002.
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