By Eric Heisler
Of the Post-Dispatch
02/13/2005
 The Enclave rises from the cornstalks outside Belleville. The developer, Vantage Homes, also builds homes in St. Charles County, which has long dominated the new-housing market in the St. Louis area. In December, for the first time, Vantage’s sales in its St. Clair County developments exceeded those in St. Charles County. |
Ignored for decades, the Metro East area is
primed for a housing boom that could cool builders' long love
affair with the western suburbs.
Since 2000, the two largest counties on the Illinois side of the
St. Louis area - Madison and St. Clair - have seen a 60 percent
jump in home building permits. (With a net loss in population
in 2003- see the next article.)
As open land in St. Charles and St. Louis counties dwindles,
builders are finding plenty of cheap, flat terrain in Illinois,
some of it close enough to the region's core to see the green
roof of One Metropolitan Square downtown. And they're discovering
a new generation of Missouri buyers, who no longer view crossing
the Mississippi River as taboo.
The Metro East's recent growth is putting a dent -albeit a small
one - in St. Charles County's dominance of the new housing market.
Poised to step in is St. Clair County, where building permits
have nearly doubled in four years.
"Trust me, Illinois is the next St. Charles County,"
said John Brancaglione, a development consultant with St. Louis-based
architectural firm Peckham Guyton Albers & Viets.
"When you look to the west, I think Wentzville is the end of
the road. People just don't want to commute that far anymore,"
he said. "I'm convinced: the Metro East is where St. Charles
was 20 years ago."
Behind this trend are couples such as Christopher and Wendy
Missey, who moved back to the St. Louis area from Florida last
year to be closer to family.
He had grown up in south St. Louis County and wanted to be near
his mother and brothers. But the Misseys didn't want to pay St.
Louis County prices.
For the past two decades, families like this have eyed St.
Charles County, where thousands of middle-class homes rise each
year in former cornfields.
But as development pushes west, minutes are quickly piling on to
the drive time between affordable houses and the St. Louis
region's core. At the same time, new jobs are popping up in
Illinois, and familiar retailers, including Dierbergs Markets,
have moved there, too.
That's led more and more house-hunting couples to the east side
of the Mississippi.
The Misseys and their two young children moved last year into a
new four-bedroom house in Columbia, Ill., near the Jefferson
Barracks Bridge. The builder was Vantage Homes of Chesterfield.
"It was close to St. Louis County, it was close to the
highways and it was close to his brothers and his mom," said
Wendy Missey, a dietary consultant who works from home. "We
felt like we were getting a lot more value for our home than in
St. Louis County."
Fighting years of tradition, Missouri home builders are finally
taking notice of that sentiment. Just six years ago, Vantage
Homes was the only major Missouri-based builder in Illinois.
But around 2000, the Jones Co. entered the Illinois market,
followed by Taylor-Morley Homes, Whittaker Homes and others.
A construction boom followed. In 2000, Madison and St. Clair
issued 1,759 permits to build new houses, according to Zanola Co.,
a housing research firm based in Rock Hill. That shot up to 2,908
last year.
Four years ago, St. Louis and St. Charles counties issued three
times as many permits as Madison and St. Clair. The gap closed to
twice as many in 2004, Zanola found. The fast-paced growth has
yet to migrate south to Monroe County, where the number of
permits is up since 2000, but down slightly the past two years.
"It used to be unheard of to go to Illinois," said
market analyst Joe Zanola.
"But a lot of these builders need to keep growing," he
said, "and they can't keep growing if they're only in St.
Charles County."
That explains the decision of Tom Hughes, president of St.
Charles-based home builder T.R. Hughes. A former police officer,
he left the force in the early 1990s and saw his fledgling
company mirror St. Charles County's meteoric growth.
Today, T.R. Hughes builds about 300 homes a year. And up until
mid-2004, every one of them was in St. Charles County.
But last June, with rival builders selling up to 160 homes a year
in Illinois, Hughes broke ground on a 280-lot subdivision in
Fairview Heights.
"What we're seeing is the momentum begin to shift from the
west to the east," said Richard Ward, a principal with
Development Strategies, a St. Louis consulting firm. "I'm
not saying the whole thing is flipping around, but it is starting
to change."
Mending an image
To be sure, St. Charles County is still king of the St. Louis
area housing world. Last year, it issued 4,100 building permits,
Zanola said. That's its highest total ever, and more than twice
as much as any other county in the region.
But St. Charles County peaked in 2002, when it issued one in
three area building permits. Since then, its market share has
dropped by 3 percentage points.
St. Charles County could become a victim of its own success,
market observers say. When it became the heir to the new housing
throne 20 years ago, builders descended in droves.
St. Peters quickly filled up. Development moved west to O'Fallon,
and now Wentzville seems ready to take the lead.
But as Grade A ground becomes scarcer, prices head skyward. And a
growing not-in-my-back-yard sentiment has resulted in more
development restrictions, frustrating builders.
Skeptics about the Metro East note that St. Clair County lost
population in 2003, according to research from the University of
Missouri at St. Louis published in the Post-Dispatch last week.
And they point out that other corners of the St. Louis region
could just as easily gain if St. Charles County falters.
To an extent, the idea that other places also will grow is true,
Zanola said. There's been a recent revival in North County, a
mini-boom in Jefferson County and new interest in redeveloping
the city of St. Louis.
But each of those areas has limitations, he said. To the north,
the floodplain and rivers get in the way; Jefferson County's
rocky soil makes building difficult and expensive. St. Louis
remains tough to predict.
All of that adds up to a larger share for the Metro East in the
future, industry observers say.
For Joe and Betty Goldbeck, formerly of north St. Louis County,
Illinois has become a good option right now. At first, Betty
Goldbeck, 58, admits she was concerned when the couple downsized
to a three-bedroom Vantage Home in Belleville.
"I was worried about the drive," said Goldbeck, an
administrative assistant at Sisters of the Good Shepherd in
Normandy. "But several people at work convinced me. The
commute would be as long or longer in St. Charles County ... In
Illinois, you kind of have that small-town feel." (“For
how long,” asks Stop158.)
Price also has been a draw. A house that T.R. Hughes sells for $180,000
in O'Fallon, Mo., is priced at $160,000 in Illinois, a spokesman
said.
"I think for a while, people just had the wrong image of
Illinois," said Darwin Miles of Miles Properties, a
commercial and residential real estate broker in O'Fallon, Ill.
In O'Fallon, which issued 357 building permits last year, several
events have helped to overcome that stigma, Miles said. First,
local governments rolled out the red carpet for builders by
making needed road upgrades.
Then, in 2003, Dierberg Markets opened its first Illinois store
in nearby Shiloh. Right next door, a new Target store has opened.
O'Fallon, Ill., meanwhile, has found itself at the center of the
growth explosion. The city of 25,000 saw about $52 million in
home construction last year, up from about half that in 2002,
Miles Properties estimates.
Several miles west, on a forest-covered hill in the Illinois
village of Caseyville, two California developers say they've
spotted a rare find in a major metropolitan area: 500 acres of
mostly untouched, wooded land within sight of the downtown St.
Louis skyline.
Under the name Caseyville Sportchoice LLC, the developers plan to
build more than 600 new homes there; prices will average about $400,000.
It's a great site, said Brancaglione, but its potential was
misread by locals.
"It sometimes takes the out-of-towners to see the best
opportunities," he said.
(Stop158 notes that much of the growth in
village housing is due to annexation; what was formerly farm land
in the county becomes houses in the town.)
END