Historical June 1983 report or notice. Original dates, prices and contacts describe the source period; current availability has not been established.
In April, Venita Lake, co-editor of The Paper, talked with Karleen Hoerr about real estate in the Skinker-DeBaliviere neighborhood.
As an agent for Feinberg Real Estate Co., homeowner and renovator, as well as current president of Rosedale Neighborhood Association, Karleen was asked to compare the area with conditions five or 10 years ago. LAKE: Some of us who moved into the area more than five years ago have joked that we couldn’t afford to live in this neighborhood now. Is that really true? HOERR: I think people joke about that, but it’s not as true as people may think. I think most of us could still move into the neighborhood. It’s true, though, that many of us have become accustomed to house payments less than what young people are paying now.
For instance, to get a loan, you can now spend easily up to 33 percent of your gross income on principle, interest, taxes, and insurance • payments for your house. That’s a lot of money. LAKE: When somebody comes to you and says, “We would like to buy a house. Can we afford to buy one?” what do you say? HOERR: I say, “I don’t want to become very familiar with you, but one of the first things you’re going to have to tell me is what your gross income is and what kind of a down payment you have, or I can’t really help you at all.” In really simple terms, if a couple’s gross income was $36,- 000, their monthly gross would be $3,000.
As far as the bank is concerned, they could, if they chose, have a monthly payment of principle, interest, tax and insurance of $1,000.
I know that really sounds hideous, and I’m not saying that everyone does that either.
But today young people, considering what they see their potential to be as far as future ability to earn money, are not at all upset with a payment of $600, $700, or $800 a month.
And while a lot of us say our rent used to be $75 and then our first house payment was $95, their rent used to be $450 and now their payment is $650.
A lot of it is just a matter of inflation. LAKE: What are current interest rates? , HOERR: They’re really not so bad. LAKE: Are they going down? HOERR: Well, the city bond is at 13 percent, which is at the higher end. LAKE: What is this city bond? HOERR: It is mortgage money that the city is Making available: 13 percent interest, fixed rate, not renegotiating or ballooning or anything, and there are no points.
A point is a percentage of what you’re borrowing. Probably when you bought your house, and certainly when I bought mine, maybe you paid a point.
If you paid two, you must have made the banker angry Or something.
It just was not done. Points have ranged through this bad market anywhere from 3 to 7.
So if you are borrowing $50,000 and they’re charging you 4 points, your closing cost will be another $2,000, which is a tremendous amount of money.
In the city bond, the city is going to pay the points, so it’s a tremendous savings.
The city bond has been set at $65,675.92.
If you are a firsttime purchaser, and if your gross annual income is less than $32,837, and the price of the house is less than $65,675, you can get a fully amortized loan at 13 percent with no points, which is a great big deal. Depending on whether you get a renegotiable mortgage rate, an AML or balloon or whatever, your interest rate is going to be probably anywhere between 11¾ and 13½ percent. That may sound high, but you must remember that a year ago the interest rate was 17 percent. LAKE: Does that mean it’s a “buyer’s market” or a “seller’s market”? HOERR: Well, the market is really strong right now. It’s probably. a buyer’s market because houses that have been on the market for a while are in a depressed price, and the interest rate is lower, so you’re getting the best of both worlds. I think as houses start coming on the market, prices are going to come up.
Because the interest rate is lower, people are going to compensate for that and the prices are going to start going up again. LAKE: You said interest rates are getting lower. Is it fairly easy to get loan money? HOERR: Yes, it is.
Getting loans in Skinker-DeBaliviere is not a problem.
When we moved down here, getting a loan was next to impossible. I’ve never been turned down for loans in so many places in my life.
And bankers, being the conservative little devils that they were, did not believe that the neighborhood was going to do anything.
As I recall, my loan was a 15-year, which was the maximum that they would make, putting one-third down—which was not taking a real big risk, but which meant that we had to sell our car in order to come up with the down payment. LAKE: What kind of percentages do people expect to put down now? HOERR: You can put down as little as five percent.
If you buy a house and put anything less than 20 percent down, you have to get private mortgage insurance, which is another cost to you at closing and it also adds another quarter percent on whatever your interest rate is.
So if you are financing 90 percent of your loan and the current interest rate is 12½ percent, you would really be paying 12¾ percent.
With the city bond, which I think is really going to stimulate some movement, a lot of people will be able to eke their way into a house because they have five percent to put down. LAKE: Are there still a lot of houses that need rehabbing, a lot of work done on them in this neighborhood? HOERR: There’s much less than there used to be.
When I was in the residential service, that’s all we had, houses that were pretty much deteriorated. Their acquisition price was relatively low but people put in a lot of money or a lot of “sweat equity.” The one thing that I can’t deliver to people as I used to are houses that need work.
And many people much prefer to buy a house that hasn’t been fixed up, because they (1) would like to spend less money and (2) would like to mold the house to how they want it to be. I can think of only two houses that I would consider outright shells in maybe the last three years.
There have been houses that needed work, but not major renovation.
A little wallpaper here, a little crack coating, a little plaster, some new kitchens or baths, but very liveable and very nice. Kitchens are particularly important. People want a real superduper fabulous kitchen with everything that fits what their ideals are, or they want just a horrible kitchen so that they can do it themselves.
Sometimes a middle-of-the-road kitchen is a problem because people say, “Gee, this is a nice kitchen, but it’s not me.” They may not want a particular house because they are going to want to do their own kitchen.
Another thing that we’re running into now—remember when we all exposed our brick? People aren’t as keen about that now as when we tore the plaster out.
It was fabulous in the magazines, but I think with Laclede Gas bills being what they are, usually the first questions are “What is the cost of the budget gas bill?” and “How can we get rid of this brick wall?” LAKE: Other than kitchens, what kind of things do people really ask for, not necessarily just in this neighborhood? HOERR: In the central corridor, homebuyers want wood-burning fireplaces, at least one; they like woodwork; and of course they would like it to be stripped so that they don’t have to strip it themselves.
They like stained glass windows, nice hardwood floors, and a garage, separate dining room, a bath and a half, and then it becomes fairly individualized. People talk about light, airy rooms, which sometimes is hard to deliver because some of these houses are dark. We’re awfully close together. LAKE: What about the historic district? Are people aware of this being an historic district, and does it make a difference? HOERR: I don’t think it hinders, but I don’t think it helps. I always tell people, and I try to let other realtors know that we are a historic district, and that there are limitations on what you can do to the front of your property.
But saying they are buying in an historic district is like saying, “This is a brick house.” It does not have an awful lot of impact.
For the large part, people who are looking at this type of house and this type of neighborhood are not thinking of doing things that would change the looks of them. LAKE: Up until two years ago, many residents of the Skinker-DeBaliviere neighborhood would have been gearing up for an Art Fair-House Tour at this time of year.
From a realtor’s point of view, should we still be having a house tour here? Does it make a difference in real estate marketing? HOERR: I think anytime you do something in your neighborhood, it stimulates interest in the neighborhood, so certainly a house tour would get people in the neighborhood looking at houses.
Because the fact that there was no house tour coincided with a really slack real estate market, I don’t know. Through all this bad real estate market, Skinker-DeBaliviere has really held very well, better than a lot of other neighborhoods. People continued to move into Skinker-DeBaliviere, and we did not have the glut of houses that other areas saw. LAKE: Is that true of city and county when you are talking about other areas? HOERR: Yes, especially the county. People are still moving into the city.
There are certainly those who think that the city is not for them, but if there is a move afoot, it’s people who want to move into the city. We’re not having problems with prices falling.
They may not have escalated as quickly as they were at one time.
But that is impossible.
There are a whole lot of us who remember getting houses for nothing, but at the time that happened, the movement into the city was just beginning. Skinker-DeBaliviere was still fighting for a name and some kind of group cohesiveness, and people who came and bought houses then really took some risk. I miss the Art Fair. I think it was wonderful. I loved it.
But I like looking at houses, and any time someone invites me in to see their house, I’m delighted.
When we had the Christmas Walk this past December, it was better than I could have imagined.
I was on such a high on that I couldn’t see straight.
It was a beautiful day.
There were people walking all over, going to houses, and it was fabulous.
There was a real excitement; it was real neat.
We do plan to do it again and expand it and try to do some other things. LAKE: Apartments, single families, condominiums—does the mix help or hurt or make make a difference? HOERR: There is a place in Skinker-DeBaliviere for condominiums, because there are some people who would like to live here but don’t want to own a home. Personally, I think it’s kind of nice that we have some condos for people who don’t want to keep up a big old house any longer but want to stay in Skinker-DeBaliviere, liking the idea of owning still rather then renting an apartment.
This is never going to be a big condo market.
For the most part, Skinker-DeBaliviere is a residential neighborhood.
And there will always be a number of rental units. HOERR: You haven’t asked me this – question, but … What do I like about Skinker-DeBaliviere?
The houses are fabulous! I like them because they are not so big that they are overwhelming but they’re still, in my mind, big enough that I consider them quite grand and glorious. Past all that, one of the things that’s really neat is still the people that live in Skinker-DeBaliviere; it’s truly a neighborhood.
And in my selling down here, one of the hardest things for me is that, if I get clients that I like, I always want to move them into Skinker-DeBaliviere.
Even if they don’t want to live here, I want them here.
And when people say, “Gee, I want to live in the city,” to me that means here. Right now I have clients that I know want to live in Shaw, but I keep on bringing them down to Skinker-DeBaliviere because I know they’d like it much better, which is just insane.
But it’s easy, too. I really feel very confident about the neighborhood.
They have a child, and as I show them houses, • I think their child would be really happy here because little kids live here. People say to you, “Well, do you know anything about the neighbors?” Well, here I do. I can say there are kids that live here, there’s a single lady here, there’s a single man here, and there’s a couple here; these people are working on their house, this house has always been fine, these kids go to that school. That’s real important to me.
Originally published in The Paper, June 1983.
Read this article in the original newspaper issue.
Original source: SD_Times1983_06.pdf, printed page(s) 1, 3; PDF page(s) 1, 3.
