St. Louis is most famous for the Gateway Arch built in the 1960s. Alternately looked down on as a Rust Belt city and part of flyover country, it doesn’t generate much attention except when its crime rate or other problems hit the news. However, the St. Louis real estate market holds significant potential. Let’s look at the top reasons to come back to the St. Louis real estate market as an investor in 2020.
The St. Louis housing market isn’t limited to the roughly 300,000 people who live in St. Louis, making this the second largest city in Missouri. Instead, the Saint Louis housing market includes almost three million people. That makes St. Louis the 20th largest metro area in the United States.
St. Louis Real Estate Market Forecast 2020
Let us look at the real estate data for St. Louis from various sources. The latest real estate data from Zillow shows that the current median home value in St. Louis is $124,919. St. Louis is currently a seller’s market – which means there are a lot of qualified buyers in the market place and not enough homes for sale in the market. The home prices have risen by 1.9% over the last year. Looking forward into the coming year, the St. Louis real estate market forecast is that home prices will continue to increase by 1.7%. Since 2014, the St. Louis home prices have increased every year from $94,000.
Here is the St. Louis, MO real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 1.7% till Nov 2020.
The median list price per square foot in St. Louis is $125, which is lower than the St. Louis Metro average of $135. The median price of current listings in St. Louis is $154,900 and the median price of homes that have been sold out is $152,800. The median rent price in St. Louis is $1,000, which is lower than the St. Louis Metro median of $1,050.
Zillow reports that 15.3% of the listings in St. Louis had a price cut in Nov 2019, which is a good thing for buyers. It shows sellers were willing to negotiate on prices as they were finding it more and more difficult to sell homes at asking prices.
St. Louis Housing Market Forecast 2019 – 2021
Here is a short and crisp St. Louis housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for St. Louis is 82% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in St. Louis is 82% during this period. If this price forecast is correct, the St. Louis home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018. Check this page each quarter for updates to the St. Louis, MO Real Estate Market Forecast.
St. Louis Real Estate Market Trends
We shall now discuss some of the most recent housing trends in the St. Louis such as median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region. While St. Louis real estate market remains more affordable than in many other metro areas, low inventory and strong demand are putting upward pressure on prices.
Trulia has currently 2710 resale and new homes for sale in St. Louis, MO including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. Some of the most popular neighborhoods in St. Louis are Central West End, Dutchtown, Bevo Mill, Lindenwood Park, Downtown West, Gravois Park and Lafayette Square.
Central West End is an upscale neighborhood in St. Louis. It has everything from sidewalk cafes, smart Italian and Asian fusion restaurants, chic boutiques and antiques stores. Located just 10 minutes of drive from downtown, the Central West End is nestled between Forest Park and the Saint Louis University campus. There are currently 105 homes for sale in Central West End, St. Louis, MO.
The home prices in Central West End neighborhood range from $50K – $2.25M. Additionally, there are 69 rental properties for sale on Trulia and their rent prices range from $560 – $3.8K. The median home value in Central West End is $333,000 and the median rent price is $1,675. Zillow predicts that the home prices will rise 2.3% within the next year.
Gravois Park is an affordable neighborhood in St. Louis. The median income in Gravois Park comes in at $27,816 and the median home value is $52,300 for 2019. Roughly bounded by Jefferson Avenue, Chippewa Street, Grand Boulevard and Cherokee Street, the living in Gravois Park offers residents an urban and suburban mix feel.
In Gravois Park there are a lot of bars, restaurants, coffee shops, and parks. Gravois Park neighborhood is a diverse mix of homeowners, renters. Most residents in Gravois Park rent their homes, therefore, investing in a rental property here could prove to be a lucrative income model. The median rent price is $1,675.
In the past month, 740 homes have been sold in St. Louis, MO on Redfin.com. In addition to houses in St. Louis, there were also 377 condos, 6 townhouses, and 180 multi-family units for sale in St. Louis last month. The median listing price in St. Louis on Redfin is $165,000. According to their statistics, the St. Louis housing market is very competitive.
Homes in St. Louis receive 1 offers on average and sell in around 33 days. The average sale price of a home in St. Louis was $160K last month, up 2.6% since last year. The average sale price per square foot in St. Louis is $122, up 6.6% since last year. A hot listing in St. Louis can sell for about 1% above list price and go pending in around 8 days.
Here is the latest St. Louis housing market data for the month of Nov 2019 from Redfin.com. The sale to list price ratio shows us that it was a seller’s market in the past month.
St. Louis Housing Market Trends in Nov 2019 |
|
| Median List Price | $165,000 |
| Avg. Sale / List | 96.9% |
| Median List $/Sq Ft | $120 |
| Avg. Number of Offers | 1 |
| Median Sale Price | $160,000 |
| Avg. Down Payment | 20.0% |
| Median Sale $/Sq Ft | $122 |
| Number of Homes Sold | 740 |
There are currently 2945 homes for sale in St. Louis, MO on Realtor.com. The newly listed homes for sale are 73. The asking price of single family homes can start from $2000 and can go up to $11M for a luxury property located in Ladue neighborhood in the city of Saint Louis, MO. Ladue is an upscale neighborhood for home buyers who can afford to buy a home in the median price range of $970,000.
There are currently 77 rental properties in St. Louis, and their rent prices range from $390 to $1,400 per month. There is currently one new construction home for sale in St. Louis for a price of $325,000. Jennings, Saint Louis, MO is the most affordable neighborhood for home buyers. The median listing price of homes in Jennings is $30,000 and a price per square foot is just $32. The median rent price is $775.
According to their statistics, in November 2019, the St. Louis housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. In St. Louis, the sellers have held good leverage in these negotiations in the past month. On an average, they could sold homes for 98.16% of the asking price (just 1.84% below asking price).
A seller would always prefer scenarios which can yield a ratio of 100% or higher. The median list price of homes in Saint Louis, MO was $174.9K in November 2019, trending up 2.9% year-over-year. The median listing price per square foot was $128. On average, homes in Saint Louis, MO sell after 53 days on the market. The trend for median days on market in Saint Louis, MO is flat since last month, and slightly down since last year.
The median list price in St. Louis is $149,900 on Movoto.com. The median list price in Saint Louis went down 6% from November to December. Saint Louis's home resale inventories is 1,026, which decreased 17 percent since November 2019.
The median list price per square foot in Saint Louis is $119. In November 2019 it was $125. As you can see in the graph, the median price per sq ft rose to its peak value in May 2019, when it was $139, and then there was a continuous drop in prices from July to Dec 2019. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in December.
St. Louis, MO Single & Multi-Homes Statistics
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
U.S. single-family rental market has seen steady rent increases between 2010 and 2019. According to CoreLogic’s latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas, it shows a national rent increase of 3% in April 2019, as compared to 2.8% in April 2018. The average sales price of new homes sold in the U.S. fell by 1.6% year-over-year in July 2019, to $388,000, according to the U.S. Census Bureau.
In fact, the median sales price of new homes sold fell by 4.8% to $312,800 over the same period. For existing homes, the median price was up by 4.3% to $280,800 in July 2019 from a year earlier, according to the National Association of Realtors. July’s price increase marks the 89th consecutive month of year-over-year gains. Demand remains robust. During the year to July 2019, new and existing home sales increased by 4.3% and 2.5%, respectively.
As per the real estate company called Neigborhoodscout.com, the median house price in St. Louis, MO is $145,174, which indicates that home prices in St. Louis are well below the national average for all cities and towns in the United States. Single-family detached homes are the single most common housing type in St. Louis.
One and two bedroom single family detached homes are the most common housing units in St. Louis. Other types of housing that are prevalent in St. Louis include large apartment complexes, duplexes, homes converted to apartments and a few row houses. St. Louis has a mixture of owner-occupied and renter-occupied housing.
After the great recession of 2008, renting a home has increased exponentially across the nation. There are currently over 136.57 million housing units in the U.S. In 2018, the total number of homeowner households hit an all-time high of 76.2 million. 36.6% of households rent their homes and 64.4% buy their homes (2018 U.S. Census Bureau).
Currently, there are 546 single family homes for sale in St. Louis, MO on Zillow. Additionally, there are 251 single family homes for rent in St. Louis, MO. Under potential listings, there are about 437 Foreclosed and 101 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
St. Louis, MO Foreclosures And Bank Owned Homes Statistics
As per the St. Louis foreclosure data by Zillow, the percent of delinquent mortgages in Saint Louis is 1.0%, which is lower than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Saint Louis homeowners underwater on their mortgage is 14.7%, which is higher than St. Louis Metro at 10.4%.
Neighborhoods To Choose in The St. Louis Real Estate Market
If you are looking to invest in the St. Louis real estate, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your St. Louis investment real estate and you should be able flip it for a lump sum profit.
A cheaper neighborhood in St. Louis might not be the best place to live in. A cheaper neighborhood should be determined by these factor – Overall Cost Of Living, Rent To Income Ratio and Median Home Value To Income Ratio. When looking to invest in St. Louis real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an St. Louis investment property should be low.
The neighborhoods in St. Louis must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. St. Louis is a moderately walkable city. There are 175 elementary schools, 75 middle schools, 57 high schools and 216 private & charter schools in St. Louis. There are about 142 neighborhoods in Saint Louis.
Some of the best neighborhoods in Saint Louis, Missouri are Oakville, University City, Webster Groves, Clayton, The Hill, Central West End, Downtown St. Louis, Fox Park Historic District, Shaw Historic District, Shrewsbury, Richmond Heights, Lafayette Square, Maplewood, Dogtown, Benton Park Historic and Tower Grove East. Clayton has a median listing price of $662,000, making it the most expensive neighborhood. Jennings is the most affordable neighborhood in St. Louis, with a median listing price of $30,000.
Here are a few good neighborhoods in the Saint Louis real estate market which have the experienced the highest appreciation rates (List by Neigborhoodscout.com).
| 1 | S Vandeventer Ave / Mcree Ave |
| 2 | St Louis College of Pharmacy / S Vandeventer Ave |
| 3 | Dr Martin Luther King Dr / N Garrison Ave |
| 4 | Cass Ave / N 9th St |
| 5 | Harris-Stowe State U / Market St |
| 6 | Washington Ave / N Compton Ave |
| 7 | City Center |
| 8 | S 39th St / Lafayette Ave |
| 9 | Market St / Saint Louis Union Station |
| 10 | Cherokee St / Missouri Ave |
Is St. Louis a Good Place For Real Estate Investment?
Investing in good real estate markets is touted as a great way to become wealthy. Is St. Louis a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying a property in St. Louis is good investment? If you want to find out whether St. Louis real estate is a good investment or not, you need to drill deeper into local trends. The St. Louis real estate trends will tell what the market holds for the year 2020.
We have already discussed the St. Louis housing market forecast for 2020. Purchasing an investment property in St. Louis real estate is a little different from shopping for your car or primary residence. While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the St. Louis real estate market and expect to make a good profit on rents.
Perhaps you are looking for a slightly different hold-over, an investment property in St. Louis that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider. Let’s take a look at the number of positive things going on in the St. Louis real estate market which can help investors who are keen to buy an investment property in this city.
We’re not going to list major tourist attractions and use that to say you should buy property here, whether to live in or rent out. Instead, here are the some of the top reasons to invest in the St. Louis real estate market.
1. Its Overall Affordability for Investors
The St. Louis real estate market has one other thing going for it: affordability. Taking into consideration both the average household income and the cost of homes in the area, St. Louis continues to be one of the most affordable markets in the country. The median home price in St. Louis is roughly $150,000, though some sources say $160,000.
A general trend is a price of $105 to $120 per square foot. You can find many single family homes for sale for less than $100,000; this market is notable for the sheer number of two bedroom homes that attract empty-nesters, single parents and small families. If you take the metro area into account, the median home value is around $250,000.
2. The Affordable Upscale Market
Affordable and upscale are relative terms. Some of the most desirable real estate markets in St. Louis are surprisingly affordable to outside investors. The median price of homes in the “expensive” 63103 zip code is barely under half a million dollars. The tony 63105 zip code hovers around the half million mark, too.
You have to move far out to suburban zip codes like 63124 to find median listings past the $700,000 mark. Note that this is cheaper than a cheap condo in hot California or New York markets. You could buy two luxury homes in the St. Louis housing market for less than one in hot coastal markets.
3. The True Bargains Are Abundant
The large number of vacant homes in the St. Louis real estate market, estimated at 20%, presents an excellent opportunity for those who want to buy, rehab and rent out properties. When you factor in the suburbs, the vacancy rate is still around 6%. St. Louis also has a larger than average number of distressed and underwater homes.
In the U.S., roughly 1.5% of mortgages are delinquent. In St. Louis, the rate is 2.2%. Around 10% of homes have negative equity, while that rate exceeds 15% in St. Louis. You’ll be able to find vacant homes, distressed sellers and foreclosures at bargain basement prices here that you can renovate and rent out or sell throughout the St. Louis real estate market.
4. The Market’s Price Stability
The St. Louis real estate market has seen strong appreciation over the past three years, finally bringing them out of the low prices they’ve suffered through the Great Recession that really only ended two years ago. In fact, St. Louis properties appreciated on average 26% over the past three years.
Yet the market isn’t “hot”. Instead, it is considered balanced, favoring neither buyers or sellers. This suggests that those who buy in this relatively cheap market could enjoy reasonable price increases over time without worrying if they’re buying before a bubble bursts or if their investment will go down in value.
5. The Massive Renter’s Market
Around a third of the U.S. population rents. In the downtown St. Louis real estate market, nearly 60% of residents rent, and the rate is around a fifth when you include those in the suburbs. This is a huge rental market that you can take advantage of. Unlike college towns, your ability to find renters doesn’t depend on the popularity of the local college, nor will the value of the property depend on proximity to a particular school.
6. It Is Relatively Landlord Friendly
Missouri is more landlord friendly than other states in the area, notably Illinois. For example, it is much easier to evict someone who doesn’t pay their rent than surrounding states. In Missouri, you can file to evict if they’re just a few days late with the rent. There are protections for tenants, especially regarding security deposits. All of this is aside from the fact that the St. Louis real estate market has far more multifamily housing stock than other Midwestern markets.
7. The Strong ROI
Depending on the source, median rents range from $900-1000 a month in St. Louis and $1100 a month in the surrounding suburbs. Imagine buying a rental property for $50,000 and renting it out for $500-$1000 a month. You can rent out a studio apartment for $500 a month and a two bedroom for $800.
The rare four bedroom apartment or house commands more than $1200 a month. It is hard to beat that ROI without risking your money buying liens and hoping you can secure a property. Because of the city’s age, you can find many older apartment buildings and apartment complexes at a reasonable price and rent them out at a decent rate.
8. The Student Market
College towns have a large proportion of renters, but you’re fighting with other investors to find properties to rent out to students. St. Louis’ student market is fairly scattered due to the sheer number of universities. Yet it is large enough to present an opportunity for those who want to rent to students.
Traditional universities in and around St. Louis include Blackburn College, Greenville University, Missouri Baptist University, St. Louis University, University of Missouri – St. Louis campus, Washington University in St. Louis and the Southern Illinois University Edwardsville campus. On top of this are various technical schools, seminaries, Bible colleges and junior colleges.
9. The Known Redevelopment Opportunities in St. Louis
One of the benefits of master-planned redevelopment is that you know where real estate prices are going to go up due to renewed interest. The Garment District is slated for redevelopment, replacing the empty industrial buildings with homes and workspaces for creative types and new technology companies.
The “New Northside” project wants to redevelop the entire north side of St. Louis. That project includes 1500 acres that borders downtown St. Louis. Chippewa Park in south St. Louis is also targeted for redevelopment, too. That renovation includes apartment homes and industrial space.
10. Redevelopment Opportunities in St. Louis’ Suburbs
St. Louis is old enough to have aging inner-ring suburbs. You can find redevelopment opportunities in suburbs like University City, home to Washington University in St. Louis. About 800 acres are slated for redevelopment in University City. Wellston is receiving funds from HUD specifically for redevelopment.
Investing in St. Louis Real Estate or Not: The Conclusion
Maybe, you have done a bit of real estate investing in St. Louis but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. The St. Louis real estate market is red hot! Homes are selling fast because inventory is low, creating a banner selling season for homeowners looking to move.
If you’re looking for an amazing opportunity, the St. Louis real estate market can’t be beat. There are many opportunities in the St. Louis real estate market to investors regardless of who you want to target for renting or selling a newly renovated home. A good cash flow from St. Louis investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good St. Louis real estate investment opportunity would be a key to your success. If you invest wisely in the St. Louis real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. Most investors naturally gravitate to residential property investment.
When looking for the best real estate investments in St. Louis you should focus on neighborhoods with relatively high population density, employment growth and strong appreciation potential. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing locally in the St. Louis real estate market. As with any real estate purchase, act wisely. Evaluate the specifics of the St. Louis real estate market at the time you intend to purchase.
If you are a beginner in real estate investment business, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like St. Louis, MO.
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 area, 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.
The aim of this article was to educate investors who are keen to invest in St. Louis real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Good Markets To Invest in Real Estate in 2020
Similarly, don’t let the country-western touristy image dissuade you from investing in Nashville, TN. There are a number of 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 2020, 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 in Nashville remain at record lows, it makes buying a property more affordable now than it was in the 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.
Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $350,000, 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, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
Updated Market Prices, Trends & Forecasts
https://www.zillow.com/saint-louis-mo/home-values/
https://www.zillow.com/central-west-end-saint-louis-mo/home-values/
https://www.redfin.com/city/16661/MO/St-Louis/housing-market
https://www.realtor.com/realestateandhomes-search/Saint-Louis_MO/overview
Neighborhoods
https://explorestlouis.com/things-to-do/neighborhoods/central-west-end/
https://www.homesnacks.net/cheapest-neighborhoods-in-st-louis-mo-1220885/
https://www.niche.com/places-to-live/n/gravois-park-st-louis-mo/
Redevelopment
http://www.northstl.com
http://news.stlpublicradio.org/post/university-city-leaders-try-reassure-residents-business-owners-about-redevelopment-plan#stream/0
https://nextstl.com/2016/12/wellston-first-aims-reinvent-struggling-historic-inner-ring-suburb https://fox2now.com/2018/05/22/downtown-st-louis-announces-next-phase-in-redevelopment-of-garment-distrrict
Landlord friendly
https://www.rentapplication.com/missouri-landlord-tenant-laws
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
