Area Housing Improves; Underwater Homes Remain High
ST. LOUIS (KMOX) - While there are some signs of improvement in the St. Louis real estate market, one problem looms above the national average.
It’s the problem of owning a home that’s worth less than you paid for it.
A new study from RealtyTrac shows 29 percent of mortgage holders here are underwater. That’s higher than the national average of 26 percent.
RealtyTrac Vice President Darren Blomquist says those underwater homes are creating a situation where institutional investors are buying a larger share of homes here.
“A lot of the activity you see driving the market right now is not those move-up buyers who can sell a home and buy a new home, it’s the investors, real estate investors,” he says.
Institutional investors such as hedge funds represent 12 percent of home buyers here, compared to nine percent nationally. Blomquist says that means a lot of St Louis homeowners are unable to resell their home or move.
“Those homeowners, in many cases, cannot participate in the housing market yet because they don’t have any equity yet in their home so that makes that piece of the market somewhat stagnant at this point,” he adds.
RealtyTrac says home prices here are up 27 percent from the market bottom, higher than the national average of 19 percent.