Advantageous financing and strengthening market attracts motivated luxury home buyers
Luxury real estate in St. Louis is showing competitive buyer activity, according to professional market observations by The Gellman Team. In fact, the primary challenge facing the luxury home market is a shortage of listings, particularly in popular affluent neighborhoods.
"High-end home buyers are drawn to the communities of Town and Country, Frontenac, Des Peres, Chesterfield and Creve Couer," explains Gellman Team co-founder Mark Gellman. "Clayton and Ladue are also highly desired by luxury home buyers. Homes in these two areas have experienced short days on market and multiple offers."
While home prices have not yet returned to the peaks of 2006, co-founder Neil Gellman says the St. Louis luxury market has reached a sweet spot. "Home prices continue to improve, which adds to buyer confidence. Meanwhile, we have a Jumbo mortgage environment that is offering financing at virtually the same rate as a Conventional loan for those with excellent credit. This leveraging power provides a strong incentive for luxury home buyers."
Neil Gellman explains that while rates on Conventional mortgages have seen an uptick, Jumbo mortgage rates will not follow suit as quickly. "There are several reasons why Jumbo rates are likely to remain attractive. First, banks are competing for affluent customers. Jumbo mortgages put high-balance, low-risk loans on the books, and provide an opportunity to cross-sell brokerage and wealth management services. Meanwhile, non-Jumbo mortgages backed by Fannie Mae and Freddie Mac have become more expensive for banks to issue, and for consumers to obtain, because of the fees involved. Due to the tapering policy, interest rates on mortgages backed by Fannie and Freddie are gradually increasing. As a result, banks may see fewer conforming mortgage applications for home purchases and refinancing. Banks are finding the Jumbo mortgage market very attractive in comparison - and they are pursuing the affluent borrower. The lowest interest rates offered will be on adjustable-rate Jumbos. Fixed-rate Jumbos will eventually see some rate increases as market conditions evolve."
Though it's a great time to buy a luxury home, it's even a better time to sell. "Economic conditions and luxury home market conditions are the best we have seen in years," says Mark Gellman. "We are seeing the return of relocation buyers. At the same time, improving equity has empowered existing homeowners to move-up to the next price level. Buyer competition is always good news for home sellers, and when you add limited home inventory into the mix, it's a recipe for strong offers."
The Gellman Team recommends that luxury home sellers act now to take advantage of current market conditions and the peak selling season. "Mother nature helps your home's curb appeal during the Spring and Summer," advises Mark Gellman. "Now is the time to show off your landscaping and your gardens, while lawns are lush and colorful. Homes with outdoor living space, scenic views, or golf course amenities are also easier to appreciate when the weather is comfortable. Of course, your overall marketing strategy should be centered on the distinctive elements of your property."
The Gellman Team at Coldwell Banker Premier Group provides real estate services to home buyers and sellers throughout St. Louis and the surrounding area. They stand among the top 10 teams for all Coldwell Banker affiliates in North America. They are ranked #1 in the greater St. Louis are out of approximately 9,000 agents. For more information about The Gellman Team, visit their website at www.TheGellmanTeam.com or call 314-336-1991.