Real Estate Blog - 2009 Market Report Update - New Construction Housing Starts in St. Louis (City), Missouri

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2009 Market Report Update - New Construction Housing Starts in St. Louis (City), Missouri

10 YEAR STATISTICS - ST. LOUIS CITY HOUSING STARTS 2000 TO 2009:

Year	Type	Total - Single Family	% Change - SF	Total - Multi-Family	% Change - MF	Total Permits	% Change - Total
2000	New	149		239		388
2001	New	126	-15.43%	247	3.34%	373	-3.86%
2002	New	138	9.52%	302	22.26%	440	17.96%
2003	New	161	16.66%	950	214.56%	1111	152.50%
2004	New	169	4.96%	371	-60.94%	540	-51.39%
2005	New	393	132.54%	770	107.54%	1163	115.37%
2006	New	329	-16.28%	144	-81.29%	473	-59.32%
2007	New	237	-27.96%	272	88.88%	509	7.61%
2008	New	129	-45.56%	217	-20.22%	346	-32.02%
2009	New	45	-65.11%	119	-45.16%	164	-52.60%
2000	Rehab	143		1050		1193
2001	Rehab	196	37.06%	2165	106.19%	2361	97.90%
2002	Rehab	134	-31.63%	1673	-22.72%	1807	-23.46%
2003	Rehab	248	85.07%	1974	17.99%	2222	22.96%
2004	Rehab	168	-32.25%	2303	16.66%	2471	11.20%
2005	Rehab	280	66.66%	5872	154.97%	6162	149.37%
2006	Rehab	253	-9.64%	3710	-38.81%	3963	-35.68%
2007	Rehab	242	-4.34%	2349	-36.68%	2591	-34.62%
2008	Rehab	156	-35.53%	1279	-45.55%	1435	-44.61%
2009	Rehab	89	-42.94%	658	-48.55%	747	-47.94%

EXPLANATION OF STATISTICAL REPORTS:

The City of St. Louis issues two types of permits for new construction. The "new construction" permits are for new buildings constructed from the ground up. The "rehab" permits are for the complete or gut rehabilitation of existing structures, including such housing starts as condo conversion projects, conversion of multi-family flats to single family, etc. For the purposes of the data, single family includes attached townhomes and multi-family includes condominiums and multi-family projects like apartments.

Housing Starts - St. Louis City - 10 year Statistics

Commentary:

The graphs tell a remarkable story. The City of St. Louis has experienced a renaissance that has saved some of its great historic buildings by converting local landmarks from industrial, commercial or other institutional uses into residential apartments and condominiums. Here are some of the many problems with drawing broad conclusions based on these statistics:

No Data on End Use: It is difficult to easily track the end use for any permit. For example, a multi-family permit may relate to a for sale condominium or a for rent apartment or even a unit originally intended as for sale and now rented.
No Breakdowns Based on Neighborhood: Housing values vary by neighborhood. The permits are not grouped by neighborhood or zip code. As a result, overbuilding in certain sub-markets could depress sales prices and rental rates in that submarket and have limited or no impact on other submarkets.
No Breakdown on Delivery Dates: The housing permits reflect the dates that the permits were issued and not the dates when the permits were closed out. As a result, the units in large multi-family projects are grouped in a single year even though construction of the units occurred over an 12-24 month period, and the sale of the units occured over multiple years.

However, notwithstanding the limitations in the data, it is pretty clear that some neighborhoods were overbuilt. The overbuilding of certain neighborhoods often had a 4-stage impact on the submarket:

Reduction in sales transactions.
Downward pressure on sales prices as developers reduced prices.
Conversion of projects from for sale projects to projects including rentals.
Downward pressure on rental rates as residential rental inventory increased.

Again, I would caution from drawing any broad conclusions as this phenomen varied greatly based on the strength of the neighborhoods and submarkets. For example, Lafayette Square saw a decrease in volume, but did not experience any decrease in median or average sales prices and, in fact, saw increases in median and average sales prices in 2008.

If you are a developer, lender, resale owner, or purchaser interested in the purchase, sale or rental of a newly constructed single family home, townhome, condominium or loft in the City of St. Louis and desire experienced representation, contact Ryan Shaughnessy at PREA Signature Realty at 314-971-4381.

Data Sources: Home Builders Association of St. Louis and Eastern Missouri and the City of St. Louis Building Division.

________________________________________________________________________________________________

PREA SIGNATURE REALTY

PREA Signature Realty is a full service brokerage located at 1709 Park Avenue in the Lafayette Square neighborhood of the City of St. Louis. PREA Signature proudly serves the following city neighborhoods: Lafayette Square, Soulard, Benton Park, Benton Park West, Downtown Loft District, Forest Park Southwest, Central West End, Tower Grove East, Tower Grove South, Compton Heights, Shaw, The Hill, Dogtown, Carondelet, Holly Hills, St. Louis Hills, Dutchtown, and the Other Historic Neighborhoods of the City of Saint Louis, Missouri.

The opinions expressed herein represent the opinions of the author only and do not reflect the opinions of PREA Signature Realty. All photos and written content were produced by PREA Signature Realty. All Rights Reserved - PREA Signature Realty (2009). This content may not be reproduced or reprinted, except for Active Rain re-blogging, without express written permission of PREA Signature Realty.

For more information, visit our website at www.PREASignatureRealty.com or contact Ryan Shaughnessy at 314-971-4381 or send an email to Ryan@PREASignatureRealty.com.

Posted by Ryan Shaughnessy, Broker/Attorney - Your Lafayette Square Real Estate Partner on 10/06/2009 12:56 AM

Comments (15)

Market Conditions in St. Louis, Missouri in the Real Estate Market Channel

market conditions, market research, market statistics, market report, housing starts, new construction building permits in st louis

Originally posted at: THE LAFAYETTE REPORT: 2009 Market Report Update - New Construction Housing Starts in St. Louis (City), Missouri

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15 Comments on 2009 Market Report Update - New Construction Housing Starts in St. Louis (City), Missouri

OCT

It's interesting how your graphs correlate to graphs I have observed in Phoenix, Arizona.

Leolinda - We have been pretty lucky. It could have been worse. There is some good news out there - first, many of these new permits were for conversions meaning historic building were saved and second, there are some great values out there right now.

Hi Ryan! WOW, what a detailed market report for new construction housing starts in St. Louis City Missouri! I'm VERY impressed at the graphics and detail! Like you, pulling statistical data is quite difficult as there are no hyperlocal figures for which to compare--and that is truly what you need when you get down to the nitty grity! The overall view is great unless you're seriously considering a particular area--then you have to really dig to obtain the data that you need.

Have a great week...

Debe - It is difficult to make meaningful conclusions on the micro level for all of the reasons that you mention. We can only estimate value in a snapshot. I'll leave the long-term market predictions to the economists. However, we continue to stress "location, location, location" to our buyers. Although the general trends are important, we have local markets that don't directly follow local, regional or national trends. However, it still amazes me that people hire agents who have absolutely no knowledge of the city market, the boundary of neighborhoods, or the trends within the city or neighborhoods.

Ryan, So true, graphs and charts only tell so much, there usually needs to be an explanation of the story the graphs are telling..... looks like '05 was the year, we had that here as did the rest of the country, over build and over priced. It takes some pain now to correct that gross error in our economy and the greed that accompanied it! I hope the lesson will be learned and remembered for a while and we can recover to a more reasonable market with appreciation at a steadier pace.

Ryan, that sure gives you a picture of what has been happening in the last few years. Thanks for the information.

Debbie - There is no doubt that the market was overbuilt and overheated in 2005 and 2006. However, statistics and graphs tell only part of the story. The devil is in the details. Not all submarkets were saturated with new housing - a large number of housing starts were clustered downtown.

Lanora - It is pretty amazing when you see these numbers and compare it to sales. In addition, when you look closely at the data, you see gaps and sometimes more questions than answers.

I enjoy studying patterns. Graphs are appealing, and you did an excellent job of getting this information into a visually pleasing presentation. Even if certain conclusions can't be drawn, due to missing variables, it's very interesting to look at the overall trends. I've never seen a 10-graph for the market, and enjoyed this.

OCT

Ryan, Very interesting to see the numbers for a ten year comparison. I may have to go back and do that for a few of our communities to see the trends. Thanks for sharing.

Mara - I can't draw any specific conclusions. However, even with all the variables, I can say that condos were overbuilt especially in the downtown area. When you have 7500 multi-family units in a single year and have less than 800 sales, you have some excess inventory.

Susan - I like seeing the trends and the numbers didn't surprise. We had great growth and I am glad that we did. Even though it saturated the market, it did attract new residents to city, saved landmark buildings, and strengthened some neighborhoods.

OCT

Ryan,

Very cool graphs.. I am happy the older buildings got a face lift and new ones were constructed. St. Louis is an awesome city.

Ann Hayden in soggy Wildwood, MO

Hey Ann - I love the new construction and rehab of the historic buildings. I would agree with the trends in the charts that we have an over-supply and it will take time to absorb all the new units.

Ryan, St. Louis did a great thing rehabbing many of their historic buildings rather than letting them be torn down and lessen the character of the urban core.

Sharon - New developments have slowed. There remain buildings still in need of rehab and endangered. We are seeking an increase in speculators looking to bank land and buildings for the next market upswing. There are some great value opportunities out there right now.

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