So That's What's Happening?

Working in many city neighbhorhoods gives me a picture of St. Louis that is optimistic. I remember in my former occupation when a client of mine was buying a home in Lafayette Square. He was excited about all the development and changes going on. It was 1997. I just didn't see it.

Now Lafayette Square is a vital urban neighborhood that has stimulated progress in surrounding areas (Old City Hospital, the Gate District, etc.).

Urban sprawl still takes place, but at a much less forceful rate than it has in the past. Also, the people I've worked with looking in places like Wentzville are generally in the entry level price range where the average suburban home buyer in the 1970's was often time able to afford significantly more than what home prices were going for in the urban core.

Other than gentrification, revitalization or adaptive re-use, there is a term that is used to describe what has been happening in St. Louis and other inner city areas in the past few decades. This article in the New Republic describes the process as "demographic inversion". It was a good read; worth sharing. In a times like today when massive amount of development drastically slows down, the false conclusion that there is a problem with downtown. This article reminds me that the trends underlying the shifts in population are still active, and are much more subtle than the amazing transformation that has taken place in such a short time downtown and elsewhere in the city.

The subject of demographic inversion isn't always perceived as positive though. So much talk of displacement of the poor disenfranchised citizens seems to be present when areas are gentrified. The problem (poverty, crime) still remains but just moves elsewhere. Some agree on this point, but another observation is that while gentrification often gradually changes the demographics of a neighborhood, the areas where the poor relocate vary and are never as concentrated as what took place when the inner cities were summarily abandonded by the middle class.

More will be revealed as time goes on. Progress in St. Louis keeps moving.

Today's Action

Between the Cardinals game this afternoon and my open house at the Banker's lofts from 12-2, one wouldn't think there was room for anything else downtown, but what does one know?

Metropolis is an organization that is hosting "The Lot" and a worthy event it is. Who would want to miss the Funky Butt Blues Band?

Really though, the mission of Metropolis has always inspired me in that St. Louis should never have become a place where entire generations sole focus is to move away. While it seems that the city and downtown's re-birth seems to be happening naturally by participation of several types of entities (government, quasi-government, developers, businesses and residents), the voice of Metropolis has been a positive force throughout the past decade worth hearing.

Happy Birthday to Metropolis and Come on out and enjoy the LOT!!

Buy Here!

Homevestors, a nationwide company working mostly in residential real estate ranked St. Louis as the eight best city for real estate investment according to this weeks Business Journal Update. This is really no suprise. Predicting the success of any investment is tough, but with the combination of low home prices and tremendous amount of infrastructure improvements in the area, the opportunity to find great investments is definately out there.

It's a Neighborhood Stupid!

There was plenty of stories about downtown in this weeks St. Louis Business Journal. Downtown's biggest critic (Post Dispatch parent co Lee Enterprises) has hit an all time low, Ballpark Village might be coming together, a new branch of Lindenwood College is coming to
1409 Washington

The article that stood out for some reason was about the decrease in loft sales over a record 2007.

Its not a bad article, really. It just states the facts. It talks about how some builders plans are changing in response to the market.

What's nutty, is that there is an implication that lofts are supposed to be like barrels of Budweiser. "Condo Sales Lag". Building lofts and condos downtown should be more about quality than quantity. Stories about the neigbhorhood should focus on how things come together, and how they add to the area, not look at homes sold like they're a commodity.

Most strange is that everyone knew the day would come when the developers would fade away and refocus on other types of construction or other areas. Most people knew that all the condo units projected to be built would be limited by the market. By comparison, the city of Creve Coeur has a larger population of approximately 16,500. Creve Coeur only had 307 homes sell last year (per the MLS). Why no write-up for Creve Coeur? The reasons are obvious: 1. Sales of homes everywhere are lagging and 2. It's ok for a neighborhood to stabilize.

It's great to hear about Ballpark Village and Lindenwood College. Downtown progress isn't over by a long shot. The great surge in owner occupied residences in since the turn of the century may be coming to an end, but the foundation has been laid for much growth and prosperity in the future.

Online Free Downtown

I heard on KMOX this morning that the new free wireless access was available today. I didn't see any news online about it, so I decided to log on when I had a chance.

Having just been on a trip, I really value having this service here.

It only took me a couple minutes while parked at 9th and St. Charles to not only create an account but to add this post. In adding the account, look for "STLMETROFREE" networks. There were about 5 of them to choose from. There's also the opportunity to buy a membership for faster access, VPN ability and no ads. (although the ads are just a large bar on the top of the screen, hardly a nuisance).

Only 19 hours left, but still nice for the occasional need to access the web while on the run in downtown St. Louis.

My Day at the FHA: part 2

Finding out that the Knickerbocker lofts are the only lofts in downtown St. Louis that have undergone the full FHA approval process was disconcerting. It makes perfect sense though.

A visit to the FHA office in the Robert A. Young Federal Building would clear up all my questions about getting more loft buildings FHA approved.

Getting an FHA loan on a condo doesn't require it to be previously "FHA Approved". The "spot approval" process works to get an individual unit approved. This usually means less work for the lender and a speedy resolution; both important when obtaining financing.

The only problem is that the next time a lender tries to get an FHA loan in that building, the 'spot approval' process must be done again, and again.......

Discussing the situation with lenders, its been said that if one unit in a building is approved, in a perfect world, all other units would also be FHA approved. Unfortunately, this isn't always the case.

So that's the problem in a nutshell.

My first thought is, if the buildings and the residents benefit from easier, smoother or more available financing through FHA, can they participate in getting thier buildings on the FHA approved list?

That was a question that seemed to confuse our friends at the FHA office. "The lender gets the buildings approved, " is what I was told. My reply, "why are lenders choosing to do "spot approvals then?"

The truth is, lenders don't have the time, money, access to condo association records, and really, any motivation to get buildings approved unless it adds to their bottom line. That's just how the system works.

My second thought involes adding to the workload of the condo board members and board presidents out there. The last thing I would want to suggest. Being on a condo board is often a thankless job that must be done for the good of the building. Adding the task of assisting an FHA approved lender at getting the qualified buildings on the FHA Approved Condo List may mean more "up front" work but may reduce the overall workload down the road.

With an increase in market share projected in the neighborhood of 45%, it makes sense for condo associations to start working with lenders and encouraging them to approve the building.

It also is worth a call to your local Congressman to find out why FHA financing is limited to condo projects with less than 30% commercial use. That provision is biased against urban "mixed use" projects and is not something the fine folks at the FHA are even able to explain.

FHA loans are a program that got left in the dust of the mortgage boom of the past decade. Its terms weren't as easy to deal with and there were better options available in the conventional marketplace. With FHA streamlining its programs and making them more "user friendly" combined with the current lending crisis on our hands, it just makes sense to hop on the bandwagon or else suffer the fate of buyer's being steered away from downtown.

My Day at the FHA; part 1

Rapid changes in the financing markets have me thinking quite a bit lately. Last week a lender advised a client that if she wanted a loft downtown, she should check a list of FHA Approved Condominium projects in St. Louis FHA%20approved%20St.%20Louis%20Condos.pdf

"FHA loans" are really bank loans that are insured by the federal government. They were created in the great depression as a way to encourage home ownership by those unable to make the substantial downpayment required to own a home (providing 97% loan to value (LTV) instead of 80% loans to value). For about the past 8 years, FHA loans were nearly obsolete with the availability of "piggyback" loans that allowed for two loans equaling 100% of the purchase price. Due to the corrections going on each day in the lending markets, the Federal Housing Administration estimates that the percentage share in the market of FHA loans will jump from 2% in 2007 to 48% in 2008.

With conventional lenders pulling most loan products off the shelf and the federal government anticipating the increase in FHA loans, one interested in downtown real estate may wonder why only 1 Loft building is FHA approved and what can be done about it.

That information to follow.