St. Louis Housing Market Trends for 2023
The St. Louis real estate market has been through some ups and downs over the past few years, but it remains a stable and thriving market overall. As we head into 2023, many are wondering what the future holds for the St. Louis housing market. In this article, we will take a look at the latest trends and data, as well as make some predictions for what we can expect in the coming year. Whether you're a buyer, seller, or investor, understanding the St. Louis real estate market is crucial for making informed decisions.
The St. Louis housing market has seen a shift in buyer demand, with new listings and pending sales decreasing for both residential homes and townhouse/condo homes. However, inventory has increased for residential homes, while decreasing for townhouse/condo homes. Despite the slowdown in demand, median sales prices have continued to rise for both types of homes.
With mortgage rates ticking up again, buyers are once again pulling back, causing sales activity to remain down heading into spring. The Federal Reserve's efforts to curb inflation have resulted in multiple interest rate hikes, with mortgage rates dipping slightly from their peak last fall. While pending sales have increased in recent months, affordability constraints continue to limit overall homebuyer activity in the St. Louis market.
The St. Louis housing market trends indicate a shift towards a more balanced market, with buyers having more options to choose from and sellers having to be more competitive in their pricing strategies. The increase in inventory, combined with the slowing pace of home price growth, has created a more favorable environment for buyers. However, the market still favors sellers, with inventory levels for townhouse/condo homes still down by 9.1%, according to data by St. Louis REALTORS®.
Despite the slowing pace of home price growth, the St. Louis housing market remains relatively strong. The median sales price for residential homes increased by 4.7% to $251,300, while the median sales price for townhouse/condo homes increased by 7.3% to $203,800. This indicates that demand for homes in the area remains high, despite the challenges buyers are facing with affordability.
Days on market increased by 40% for residential homes and 8.6% for townhouse/condo homes, indicating that homes are taking longer to sell. However, this is likely due to the increase in inventory and not a lack of demand. The months supply of inventory increased by 30% for residential homes and 11.1% for townhouse/condo homes, further evidence of a more balanced market.
Buyers in the St. Louis housing market are likely to face affordability challenges, with home prices continuing to rise and mortgage rates ticking up again. The slight decline in mortgage rates earlier this year led to an increase in pending sales, but with rates ticking up again in recent weeks, buyers are once again pulling back. This, combined with the limited inventory for townhouse/condo homes, means that buyers will need to be patient and diligent in their search for a home.
Overall, the St. Louis housing market is experiencing a shift towards a more balanced market, with buyers having more options and sellers having to be more competitive in their pricing strategies. Despite affordability challenges, demand for homes in the area remains strong, indicating a healthy and stable housing market in the year ahead.
St. Louis Real Estate Market Forecast 2023-2024
The St. Louis real estate market has seen steady growth in home values over the past year, with the average home value currently at $148,411, a 5.1% increase from the previous year, according to Zillow Home Value Index. However, recent trends in the market suggest a cooling-off period, with a decrease in new listings and pending sales. While the inventory for residential homes has increased, it has decreased for townhouse/condo homes, leading to a slight increase in median sales prices.
For buyers, this cooling off period can mean a more favorable market with more negotiating power and potentially lower prices. However, affordability constraints and the potential for rising mortgage rates may limit their ability to take advantage of the market. On the other hand, sellers may need to adjust their expectations and pricing strategies in order to attract buyers and remain competitive.
Looking at the forecast for 2023-2024 by Zillow, the St. Louis MSA level forecast predicts a slight decrease in home values, with a projected -0.4% change by February 2024. This indicates a potential shift towards a buyer's market, with increasing inventory and potentially lower prices. However, it is important to note that forecasts are not always accurate, and the market can shift unexpectedly due to a variety of factors.
In terms of specific neighborhoods, Forest Park Southeast, Central West End, and Botanical Heights have seen higher median ZHVI values compared to other areas in St. Louis, indicating potential opportunities for investment. However, it is important to conduct thorough research and work with a knowledgeable real estate agent to ensure a successful investment.
Overall, the St. Louis real estate market presents opportunities for both buyers and sellers, with a cooling off period potentially leading to a more favorable market for buyers. However, it is important to remain informed and cautious in making any investment decisions.
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 $148,411, making it one of the most affordable cities in the US. Despite being affordable, the city's real estate market is poised for growth, with Zillow forecasting a 0.4% increase in home values by March 2023.
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 $148,411, 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.
Similarly, don’t let the country-western touristy image dissuade you from investing in Nashville, TN. There are several points in favor of the Nashville real estate market if you are looking for a solid opportunity. One of the best features of the Nashville real estate market is the median property price in the city, which is considered more affordable than most of the other top markets for investing in real estate in the U.S.
Although the Nashville real estate market is expected to move a little more slowly in 2023, which would make things better for buyers, the inventory will remain limited, which means that Nashville will remain among the fastest-moving housing markets in the U.S. Also, as the mortgage rates remain at record lows, it makes buying a property more affordable now than it was in previous years.
Another housing market in Texas to go for diversifying your investments is the Austin housing market. The Austin housing market may be one of the more expensive ones in the state of Texas, but it stands out for its large rental market and high rental rates. It is an excellent place to invest in real estate in the Lone Star State. It may be the second most expensive housing market in the state but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
- https://www.zillow.com/saint-louis-mo/home-values/
- https://www.stlrealtors.com/pages/housingreport/
- https://www.redfin.com/city/16661/MO/St-Louis/housing-market
- https://www.zumper.com/rent-research/st-louis-mo
- https://www.neighborhoodscout.com/mo/st-louis/real-estate#description
- https://www.realtor.com/realestateandhomes-search/Saint-Louis_MO/overview
