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St. Louis Real Estate Market: A Thriving Market with Promising Forecast

CEO Khai Intela
The St. Louis real estate market has always had its share of ups and downs, but it remains a stable and thriving market overall. As we approach 2023, many are curious about what lies ahead...

St. Louis Housing Market

The St. Louis real estate market has always had its share of ups and downs, but it remains a stable and thriving market overall. As we approach 2023, many are curious about what lies ahead for the St. Louis housing market. In this article, we will delve into the latest trends and data, offering valuable insights and predictions for the coming year.

St. Louis Housing Market Trends in 2023

The St. Louis housing market has been experiencing notable shifts in various aspects, providing valuable insights for both buyers and sellers. Let's examine the latest data provided by St. Louis REALTORS® to gain a comprehensive understanding of the current trends.

New Listings: A Rise in Residential and Townhouse/Condo Homes

The market has witnessed a 5.7 percent increase in new listings for residential homes and an even more substantial 8.2 percent increase for townhouse/condo homes. This surge in new listings suggests a dynamic real estate environment, catering to diverse housing preferences.

Pending Sales: Varied Trends in Residential and Townhouse/Condo Homes

While residential homes experienced a positive upswing with a 9.2 percent increase in pending sales, the scenario was different for townhouse/condo homes, witnessing a 7.5 percent decrease. This indicates differing buyer interests and demand dynamics in these two segments.

Inventory Fluctuations: A Tale of Two Housing Types

Residential homes saw a 3.3 percent increase in inventory, providing more options for potential buyers. In contrast, townhouse/condo homes faced a 7.9 percent decrease in inventory, potentially creating a more competitive market for this housing category.

Median Sales Price: Appreciation in Residential and Townhouse/Condo Markets

The median sales price for residential homes experienced a moderate 2.1 percent increase, reaching $268,000. On the other hand, townhouse/condo homes witnessed a more substantial 10.4 percent jump, reaching a median price of $215,900. These figures indicate a robust market performance and potential appreciation for property values.

Days on Market: Quicker Transactions in Both Segments

For both residential homes and townhouse/condo homes, the days on market decreased. Residential homes saw a 3.8 percent reduction, while townhouse/condo homes experienced a more significant 11.1 percent decrease. This suggests a faster pace of transactions, possibly influenced by high demand and efficient selling processes.

Months Supply of Inventory: Understanding Market Dynamics

The months supply of inventory, a key indicator of market balance, increased by 23.5 percent for residential homes and 14.3 percent for townhouse/condo homes. This shift reflects changes in supply and demand dynamics, impacting the overall equilibrium of the housing market.

Is it a Good Time to Buy a House in St. Louis?

The decision of whether it's a good time to buy a house in St. Louis depends on various factors, including your personal financial situation and long-term goals. While home prices have increased, the market has seen a decrease in inventory and an increase in the average days on market for some property types.

If you're considering buying a house in St. Louis, it's essential to work with a local real estate agent who can provide guidance tailored to your specific needs and circumstances. They can help you navigate the current market conditions and make an informed decision about when and what to buy.

Keep in mind that real estate markets can fluctuate, and it's crucial to weigh your options carefully and consider your future plans when making a home-buying decision.

St. Louis Real Estate Market Forecast 2023-2024

St. Louis Real Estate Market Forecast 2023-2024 Source: Zillow

For buyers closely following the real estate landscape, Zillow's insights into the St. Louis housing market provide a valuable perspective. As of October 31, 2023, the average home value in Saint Louis stands at $168,570, reflecting a noteworthy increase of 6.6% over the past year. Homes in this region move swiftly to pending status, typically within 9 days, emphasizing the high demand in the area.

Key Metrics as of October 31, 2023:

  • For Sale Inventory: 930 homes
  • New Listings: 375 homes
  • Median Sale to List Ratio (as of September 30, 2023): 1.000
  • Median Sale Price (as of September 30, 2023): $206,667
  • Median List Price (as of October 31, 2023): $191,533
  • Percent of Sales Over List Price (as of September 30, 2023): 48.5%
  • Percent of Sales Under List Price (as of September 30, 2023): 36.3%

These metrics collectively paint a picture of a dynamic market with a balance between supply and demand, evident in the median sale to list ratio and the percentage of sales over list price.

St. Louis MSA Housing Market Forecast for 2023 and 2024

The Metropolitan Statistical Area (MSA) of St. Louis, encompassing various counties in Missouri (MO), provides a forecast that real estate enthusiasts and investors eagerly await. According to the data provided, the MSA is expected to experience a slight increase of 0.1% by November 30, 2023. However, a modest decline of -0.4% is anticipated by January 31, 2024, with a more pronounced drop of -1.6% projected by October 31, 2024. This forecast suggests potential shifts in market dynamics that stakeholders should monitor closely.

The St. Louis Metropolitan Statistical Area (MSA) spans multiple counties in the state of Missouri, serving as a significant economic and cultural hub. The MSA includes St. Louis City and surrounding counties, contributing to the region's overall growth and development. The housing market within the St. Louis MSA is substantial, with diverse neighborhoods and property types, making it a focal point for real estate activities.

St. Louis Home Prices: Are They on the Decline?

As per the latest data from Zillow, St. Louis has seen a 6.6% increase in the average home value over the past year, indicating a trend of appreciation rather than a decline. The median sale price for homes in the region is $168,570, and with the market moving swiftly, it suggests a demand that supports current pricing levels.

St. Louis Housing Market Analysis: Buyer's or Seller's Market?

The St. Louis housing market currently exhibits characteristics of both a buyer's and a seller's market. With a 9-day average for homes going pending, there is a sense of urgency and high demand, which typically aligns with a seller's market. However, the percentage of sales both over and under the list price, 48.5% and 36.3% respectively, suggests a level of negotiation and variability, providing opportunities for both buyers and sellers to navigate the market strategically.

Will the St. Louis Housing Market Crash?

According to the St. Louis MSA Housing Market Forecast by Zillow, there is a nuanced outlook. While the forecast predicts a slight increase of 0.1% by November 30, 2023, a subsequent decline of -0.4% is anticipated by January 31, 2024. The most substantial projected drop of -1.6% is expected by October 31, 2024. While these figures suggest a potential cooling off of the market, it falls short of conclusively predicting a crash. Market dynamics, influenced by various factors, should be closely monitored for a more accurate assessment of future trends.

St. Louis Real Estate Market Forecast 2023-2024 Source: Zillow

St. Louis Real Estate Investment Overview

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 $166,804, 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:

  • Affordable Home Prices: The average home value in St. Louis is $171,870, 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 a 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 March 2023, 0.2% by May 2023, and a slight decrease of 0.4% by February 2024. While not a dramatic increase, 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.