Labels often mean little, and sometimes they're just plain off the mark. But if you ask Jim Brennan, Missouri's motto hits the proverbial nail right on the head–especially when it comes to home building.
SELLING ST. LOUIS: Affordable product continues to move in the St. Louis and St. Charles areas, but projects with higher price tags necessitate discounts and incentives. Photo: Courtesy St. Louis Convention & Visitors Commission Perhaps owing to a healthy native skepticism, buyers in the state didn't jump in at the top of the frenzy and buy houses like hot cakes and drive up prices in St. Louis–the state's largest city. That's been a good thing because homes weren't pushed out of reach for most buyers. Yet even though their market hasn't been struck down by paralysis like other places and builders are offering deep discounts, Missourians still aren't jumping to buy homes. They need to see the lasting value and get extra assurance that the market is fine.

"We are the 'Show Me State' here," says Brennan, president of St. Louis-based McKelvey Homes, harkening back to a phrase first popularized by U.S. Congressman Willard Duncan Vandiver around the turn of the 20th century.

More than a century since Vandiver coined his famous phrase, builders like Brennan–whose company was actually founded in 1898, about the time Vandiver was in office–are still trying to show St. Louis buyers that it's a good time to buy a home. In some cases, they're succeeding. Their strategy: Show the value.

Few Barriers To Entry

As the late boom market peaked, investors tripped over one another to buy homes in places such as Las Vegas and Miami. That never happened in conservative St. Louis.

"St. Louis is a pretty steady market," says T.R. Hughes, CEO and owner of T.R. Hughes, a builder in St. Charles, Mo. "It doesn't have real highs and real lows like some of the other markets."

But make no mistake, area builders are suffering. "Pretty much everything has slowed in the market," says Pat Sullivan, executive director for the St. Louis Homebuilders Association (HBA). "But we've had thousands of home sales. It's not as though there's no product moving."

That stability means St. Louis isn't flooded with inventory. It also means prices didn't get pushed toward the heavens in 2004, 2005, and 2006. It's still an affordable market.

"There really wasn't any balloon to speak of in St. Louis, so there was no balloon to burst," Sullivan says. "Real estate values had climbed nicely, but by very modest numbers compared with Florida, California, or Boston. Here, there were decent, respectable increases."

That affordability–coupled with still low interest rates and increasingly large incentives–has convinced a slow, steady stream of entry-level buyers with good credit to jump off the fence and buy their first home. "With first-time buyers, the objection of selling their previous home is not there," says John Eilermann, CEO of McBride & Son Homes, the largest builder in St. Louis.

Others see strength in this part of the market as well. "Whether it's villas or condos, anything that's lower priced seems to be our first off the shelves right now," says Sharon Colona, president of St. Louis Realty.

McBride has had good luck with condos in the low $100,000s. "A lot of the national media speaks about affordability," Eilermann says. "When you're buying a $130,000 condo, you can make $38,000 [per year] as a single person and afford it."

Other builders have had success at the lower levels of the market as well. Chesterfield Heights, Mo.-based Fischer & Frichtel's Saratoga community has new multifamily homes starting at $119,000.

"For our market, that's virtually unheard of," Sullivan says. "They had a lot of people eager to purchase those units very quickly. It seems to me that the moderately priced and attached units seem to be doing well."

Whittaker Homes, which usually builds in the $100,000 to $500,000 range, has had great success with its Newtown at St. Charles development. The popularity was boosted by lots of positive press reports, and the builder established a big backlog at the project. Now things have slowed, but Whittaker seems to be holding up.

"With a lot press, we've gotten publicity without really spending any money," says Whittaker Homes president Greg Whittaker. "We just have a lot of people coming in that are liking what they see and are buying."