St. Louis offers a distinct housing market experience compared to other Missouri cities. Renowned for its affordability and cultural attractions, St. Louis attracts homebuyers seeking a charming and budget-friendly place to live. However, navigating this market requires understanding recent trends, like a slight dip in home prices and rising interest rates. This article explores everything you need to know about the St. Louis housing market, including current values, key trends, and valuable insights for buyers and sellers.
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How is the St. Louis, MO Housing Market Doing in 2024?
Current Housing Trends in St. Louis
The St. Louis housing market has been experiencing steady growth in 2024, with both home prices and sales remaining strong. However, there are some signs that the market is starting to cool slightly.
Home Prices
- Median Sales Price: The median sales price for homes in St. Louis has increased 6.7% to $304,000 as of June 2024, according to data from the St. Louis REALTORS® association. This is a significant increase from the median sales price of $285,000 in June 2023.
- Median List Price: The median list price for homes in St. Louis is currently $325,000. This is up from $310,000 in June 2023.
Home Sales
- Number of Homes Sold: In June 2024, 1,542 homes were sold in St. Louis, representing a 2.8% decrease from the previous month. However, home sales are still 5.6% higher than they were in June 2023.
- Sales Compared to Last Year: Home sales have increased by 5.6% compared to the same month last year.
Housing Supply and Demand
- New Listings: New listings have increased by 7.3% for residential homes and 13.9% for townhomes/condos. This is a positive sign for buyers, as it means that there are more homes available for sale.
- Pending Sales: Pending sales have decreased by 2.8% for residential homes and 13.0% for townhomes/condos. This suggests that buyers may be taking a more cautious approach to purchasing homes.
- Inventory: Inventory has decreased by 1.6% for residential homes but increased by 49.0% for townhomes/condos. The overall inventory of homes for sale remains relatively low, which is putting upward pressure on prices.
- Months Supply of Inventory: The months supply of inventory has remained flat for residential homes but increased by 57.1% for townhomes/condos. This means that there is currently about a 2-month supply of homes for sale in St. Louis.
Is It a Seller's Real Estate Market?
Based on the current data, the St. Louis real estate market is still considered a seller's market, characterized by strong demand and limited supply. This is evident in the rising home prices and the relatively low inventory of homes for sale. Buyers may face competition from other potential buyers and may need to offer above the asking price to secure a home.
Is it a Good Time to Buy a House in St. Louis?
Whether or not it is a good time to buy a house in St. Louis depends on your individual circumstances and financial situation. If you are financially prepared and can afford the rising home prices, then it may be a good time to buy. However, if you are concerned about rising interest rates or are not financially prepared, you may want to consider waiting until the market stabilizes.
The St. Louis housing market is expected to continue to perform well in the coming months and years. Home prices are projected to continue to rise, albeit at a slower pace than in recent years. Demand for homes is expected to remain strong, supported by a growing population and a healthy local economy. However, rising interest rates may put some downward pressure on home sales.
St. Louis, MO Real Estate Appreciation Trends
Thinking about buying real estate in St. Louis? You're certainly not alone. The city offers a lot of bang for your buck, and historically, property values have held their own. But like any investment, understanding appreciation trends is crucial before you dive in. Let's crunch some numbers and see what the data reveals about St. Louis's real estate market.
St. Louis vs. The National Average: Keeping Pace
The good news? Over the past five and ten years, St. Louis's appreciation rates have been tracking close to the national average. This indicates a steady market, where property values are keeping pace with broader trends. Let's break it down further:
- Last 5 Years: Appreciation clocked in at a healthy 41.70%, with an average annual increase of 7.22% (Neighborhoodscout).
- Last 10 Years: Even better, St. Louis saw a total appreciation of 70.76%, averaging 5.50% annually.
These figures paint a picture of a market that rewards investors for the long haul. While not skyrocketing, St. Louis real estate offers stable growth, making it a solid choice for those seeking a balanced approach.
A Recent Dip: A Temporary Blip or a Shift?
Zooming in on the most recent data, there's a slight cause for pause. The latest quarter shows a small dip in appreciation (-0.41%), translating to a -1.64% annualized rate. This could be a temporary fluctuation, or it might signal a broader cooling off period.
Here's where looking beyond the numbers becomes important. St. Louis's appreciation rate still sits above the national average for the past year (6.64% vs. national average). Additionally, compared to other cities in Missouri, St. Louis remains a top contender for appreciation (ranking 3rd in the last 12 months).
The Takeaway: So, what does this all mean for you, the potential investor? Here's the key message: St. Louis boasts a history of stable appreciation, with its performance often mirroring national trends. While there's a recent dip to consider, the bigger picture suggests a market with long-term growth potential.
St. Louis Housing Market Predictions
The average Saint Louis, MO home value is $177,243, up 5.3% over the past year and goes to pending in around 7 days (Zillow). The median sale price as of March 31, 2024, stands at $175,735, while the median list price as of April 30, 2024, is $187,217.
Median sale price refers to the midpoint of all sale prices, meaning half of the properties sold for more and half sold for less. It provides a measure of the typical price in a given area, offering insights into market trends and affordability.
On the other hand, the median list price represents the middle price point of all properties listed for sale. It reflects sellers' expectations and influences buyer perceptions of market value.
The data suggests that in March 2024, the median sale price in Saint Louis was lower than the median list price, and a higher proportion of sales closed under list price compared to those that closed over list price. This could indicate a buyer's market, where there is more supply of houses for sale than there is buyer demand.
As depicted in this graph by Zillow, home values have increased year-over-year. This upward trend is expected to persist, with forecasts indicating continued growth over the next year.
The St. Louis housing market has long been known for its stability, steering clear of the dramatic booms and busts that have roiled other parts of the country. As we navigate through 2024, experts predict a shift in the market, with exciting opportunities emerging for both buyers and sellers who are prepared to be strategic.
A Cooling Market with Silver Linings
Analysts anticipate a transition from the seller-dominated market of recent years to a more balanced environment. While this suggests a cooling off period, it's not necessarily a cause for alarm. A more balanced market can provide more breathing room for both buyers and sellers, allowing for a more measured approach to transactions.
Inventory on the Rise: A Boon for Buyers
One of the key drivers of this shift is rising inventory. With mortgage rates hovering above 6%, some potential buyers may be temporarily priced out. This, however, translates to a gradual increase in homes on the market, creating a welcome scenario for those ready to buy. A wider selection of properties allows buyers to be more selective and potentially negotiate on price, finding a home that truly fits their needs and budget.
The Mortgage Rate Rollercoaster: A Key Variable
Interest rates remain something of a wild card in the 2024 forecast. If, as some economists predict, mortgage rates cool down later in the year, it could reignite buyer activity. Lower rates would incentivize sellers to list their properties, further increasing inventory and fostering a more even playing field between buyers and sellers. It's important to stay informed about these fluctuations and work with a qualified mortgage lender to understand how they might impact your purchasing power.
St. Louis' Enduring Strengths
While the national trends influence the local market, St. Louis possesses unique strengths that position it well for continued stability. The city's affordability remains a major draw for homebuyers, especially when compared to housing costs on the coasts. This affordability makes St. Louis an attractive option for first-time buyers, young professionals, and retirees alike.
Additionally, St. Louis offers a diverse and dynamic housing market, with a range of options to suit various lifestyles. From historic city neighborhoods brimming with character to charming suburbs offering a peaceful retreat, there's a place for everyone in St. Louis.
Strategic Maneuvers in a Balanced St. Louis Market
With a more balanced market on the horizon, 2024 presents an opportunity for both buyers and sellers to be strategic. Here are some key considerations:
- Buyers: Carefully evaluate your budget and be prepared to act quickly on properties that meet your needs. Consider pre-approval for a mortgage to demonstrate your financial readiness to sellers.
- Sellers: Be realistic about pricing and leverage the expertise of a local realtor to effectively market your property. Highlighting the unique features and benefits of your home will be crucial in attracting buyers in a more competitive market.
Remember, St. Louis is a vast metropolitan area with diverse neighborhoods, each with its own market dynamics. The St. Louis housing market is more than just statistics and charts. It's about finding a place to call home in a city with a rich history, a strong sense of community, and a vibrant cultural scene.
While the market may be in flux, St. Louis' enduring appeal suggests it will remain a desirable and stable place to live for years to come. Whether you're drawn to the energy of downtown, the charm of Soulard, or the peacefulness of a suburban enclave, St. Louis offers a unique blend of urban excitement and Midwestern hospitality.
So, as you navigate the 2024 housing market, don't lose sight of the bigger picture: finding a community that reflects your lifestyle and aspirations.
Should You Invest in the St. Louis Real Estate Market?
Is St. Louis a Good Place For Real Estate Investment? St. Louis, Missouri is a city with a rich history, culture, and a growing economy. The city boasts a diversified economy with multiple sectors, including healthcare, education, and manufacturing, providing a stable foundation for real estate investments. St. Louis offers a range of investment opportunities, from affordable fixer-uppers to high-end luxury properties, making it an attractive option for both beginner and seasoned real estate investors.
One of the most significant factors driving the St. Louis real estate market is its affordability. The average home value in St. Louis is $177,243, making it one of the most affordable cities in the US. Despite being affordable, the city's real estate market is poised for growth over the next twelve months.
Another factor driving St. Louis's real estate market is the city's growing population. The city's population has been steadily increasing over the years, which has led to an increased demand for housing. This demand has caused rental prices to rise, making it an ideal city for real estate investors looking to capitalize on rental properties.
St. Louis is also home to some of the best neighborhoods in the country. Neighborhoods like Forest Park Southeast, Central West End, and Botanical Heights offer an excellent opportunity for real estate investment due to their high median home values and growth potential. Overall, St. Louis is a promising location for real estate investment, with a growing economy, affordable housing, and an increasing population. Investing in St. Louis real estate can provide investors with long-term financial benefits.
Top reasons to invest in St. Louis real estate:
Let's take a deeper dive into each of the top reasons to invest in the St. Louis real estate market.
- Affordable Home Prices: The average home value in St. Louis is $169,352, which is significantly lower than the national average. This means that investors can purchase properties at a lower price point and potentially see higher returns on their investment.
- Strong Rental Market: St. Louis has a robust rental market with a high demand for rental properties. Rental rates have been steadily increasing over the past few years. Investors can take advantage of this trend by purchasing rental properties and generating passive income.
- Growing Job Market: St. Louis has a diverse economy and is home to several major companies and industries, including healthcare, biotechnology, and finance. This has led to a growing job market with low unemployment rates, making it an attractive location for young professionals and families.
- Urban Revitalization: St. Louis has undergone significant urban revitalization in recent years, with several neighborhoods experiencing redevelopment and an influx of new businesses and residents. This has led to increased property values in these areas and presents opportunities for investors to purchase properties before they appreciate in value.
- Strong Real Estate Market Forecast: According to Zillow's MSA-level forecast, the St. Louis real estate market is expected to experience modest growth in the coming years, with a projected increase in home values of 0.4% by May 2024, 0.4% by July 2024, and a decrease of 1.3% by April 2025. While not a dramatic decrease, this forecast suggests a stable and steady market that is unlikely to experience significant declines.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
