The state of real estate since 9-11

Multi-family properties making a comeback

Since Sept. 11th, 2001, there have been 11 multi-family properties sold in the Cape Girardeau Multiple Listing Service (MLS). Compared to the same time period last year when only four sold, this is a steep increase.

Keep in mind, however, that not all sales are available through the MLS. Occasionally a buyer or seller will not want the information of their sale reported. And there are properties sold outside of the professional real estate system. The statistics used in this article are taken strictly from the Cape Girardeau Multiple Listing Service.

Multi-family properties are townhouses, duplexes, apartment buildings or houses divided into more than one unit. Many have made a good living by owning and managing property of this sort, while many more have used this sort of investment as a retirement vehicle. With tax laws easing, down payments decreasing and interest rates dropping, I suspect that the 11 buyers since 9-11 will soon enjoy a lot of company.

There are numerous articles comparing real estate investment to other options, so let's not revisit the details. Suffice to say that over the years, real estate has proven itself a sound investment. It stands above the competition especially in stressful times. After all, real estate is "real."

It is rather comforting to be able to go out and look at your investment from time to time isn't it? And it is truly satisfying to be able to go out and actually increase the value of it yourself rather than waiting to see if some remote CEO will make a good decision. OK, I know it is not that simple, please, do not flood me with irate phone calls about the complexity of the stock market.

Commercial market

Thankfully our local commercial market has remained rather steady since 9-11. There was a very slight decrease in overall market activity that remained the same post and prior to 9-11.

As a commercial specialist, I am personally happy to report that new retail businesses, restaurants and medical professionals are still inquiring and committing to come to our area.

Residential market

Nationwide, the reports are focusing on the increase in new home sales. This does not mean that the residential market in general is healthy. It means that newly constructed homes are selling at an increased rate over last year. Re-sell or pre-owned home sales have dropped sharply. The real estate trade publications are all focused on gearing the professional up for the bumpy road ahead.

Yes, interest rates are low, but it is not at all the same market as it was back in 1999 when we coasted on a booming economy coupled with low interest rates. We are living in a different world and the statistics are a mere shadow of the reality.

January had a slow start with only 32 homes sold. This compares poorly with the 44 homes that had sold by this time last year. And unlike the national statistics, the new construction sales dropped at an even higher rate from seven last January to only four this year.

The year in sales prior to 9-11 was promising at a modest 1 percent increase for all categories of homes. After 9-11, sales dropped by 11 percent; although, this resulted in an overall decrease of 3 percent in the total number of homes sold for the year 2001. The average price of a home sold did increase from $99,605 in 2000 to $111,817 in 2001.

It is extremely difficult to predict what the market will bear over the next year in the residential market.

Cynthia deJournett Austin is the CFO of Team Austins Inc. and a licensed Realtor with RE/MAX Achievers in Cape Girardeau. (www.teamaustins.com or 573-979-7653.)