St. Louis Real Estate Investment Market: Top 10 Trends 2024

Discovering the St. Louis Real Estate Investment Market

The St. Louis real estate investment market offers a unique blend of affordability, growth potential, and diverse investment opportunities. Whether you’re a seasoned investor or just starting, St. Louis stands out as a prime choice for several key reasons:

• Affordable Home Prices: Average home prices are significantly lower than the national average.
• Strong Rental Market: High demand for rental properties with rising rental rates.
• Growing Job Market: Diverse economy with major industries including healthcare, biotechnology, and finance.
• Urban Revitalization: Recent redevelopment efforts have boosted property values and investment prospects.
• Positive Market Forecast: Stable and modest growth projections according to Zillow.

I’m Peter MacKercher, principal and investment property specialist at Mogul Realty. With over two decades of experience in the St. Louis real estate investment market, I’m passionate about helping investors find and maximize profitable opportunities. Next, let’s dive into why St. Louis is a promising destination for real estate investment.

Why Invest in St. Louis Real Estate?

Affordability

St. Louis is one of the most affordable cities in the U.S. The average home value is around $177,243, making it an excellent entry point for new investors. Compared to other major cities, you get more bang for your buck here. This affordability allows for better cash flow and higher potential returns.

Cultural Attractions

St. Louis is rich in history and culture. From the iconic Gateway Arch to the vibrant arts scene, there’s always something happening. Neighborhoods like Forest Park Southeast and Central West End are not just beautiful but also bustling with activity. These cultural hotspots attract long-term residents and tourists alike, boosting the local economy and real estate values.

Growing Economy

The economy in St. Louis is diverse and growing. Key sectors include healthcare, education, and manufacturing. Major employers like BJC Healthcare and Boeing provide stable jobs, attracting professionals to the area. This economic strength translates to a steady demand for both residential and commercial properties.

Rental Demand

The growing population in St. Louis has led to increased rental demand. Rental prices are on the rise, making it an ideal market for investors looking for passive income. With more people moving to the city, the demand for rental properties is expected to stay strong.

Urban Revitalization

Urban revitalization projects are transforming St. Louis. Areas like Botanical Heights and Lafayette Square are seeing significant redevelopment. These efforts are not only beautifying the city but also boosting property values. New businesses and amenities are popping up, making these neighborhoods attractive for both residents and investors.

Investing in the St. Louis real estate investment market offers a unique blend of affordability, cultural richness, economic growth, and strong rental demand. Urban revitalization projects further enhance the city’s appeal, making it a promising destination for real estate investors.

Next, let’s explore the current market trends in St. Louis to better understand the landscape.

Current Market Trends

To make informed decisions in the St. Louis real estate investment market, it’s crucial to understand the current trends. Here, we’ll dive into home prices and value trends, inventory and sales trends, and how interest rates impact the market.

Home Prices and Value Trends

The St. Louis housing market is seeing dynamic changes in home prices and values. As of January 2024, the median sale price is $190,000. This represents a 2.6% decrease compared to the same period last year. Despite this dip, the average home value in St. Louis has appreciated by 5.8% over the past year, reaching $168,616.

This fluctuation in prices indicates a market in transition. The average home value shows long-term growth potential, even if short-term dips are present. This is a sign of a maturing market that offers opportunities for both buyers and investors.

Inventory and Sales Trends

Inventory levels in St. Louis are a key factor shaping the market. In January 2024, the number of homes sold slightly decreased to 275 homes, down from 279 the previous year. Despite this, new listings continue to emerge, although the overall inventory remains low.

Homes in St. Louis are moving quickly, with properties going from listing to pending in an average of 16 days. This rapid turnover highlights the competitive nature of the market. For those looking to invest, acting fast on desirable properties is essential.

The condo market also presents unique opportunities. With urban revitalization projects, condos in redeveloped areas are becoming more attractive, offering potential for appreciation and rental income.

Interest Rates and Their Impact

Interest rates play a significant role in the St. Louis real estate market. Currently, mortgage rates are above 6%, which has priced some potential buyers out of the market. This has led to a gradual increase in inventory, providing more options for those who can afford to buy.

If mortgage rates decrease later in 2024, as some economists predict, it could boost buyer activity. Lower rates would make mortgages more affordable, encouraging more people to enter the market. This could lead to increased listings and a more balanced market.

Understanding these interest rate trends is crucial. Working with a qualified mortgage lender can help buyers navigate these changes and optimize their purchasing power.

These insights into the St. Louis real estate investment market provide a clear picture of the current landscape. By staying informed about home prices, inventory levels, and interest rates, investors can make strategic decisions that align with market dynamics. Next, let’s delve into the rental market, job market, and urban revitalization efforts to further understand St. Louis’ investment potential.

St. Louis Real Estate Investment Market

Rental Market Insights

The St. Louis rental market is strong and growing. Rental demand is high, driven by the city’s diverse economy and steady population growth. According to recent data, the median rent in St. Louis is $1,225, with a 1-year rent growth indicator showing positive trends.

Investors can expect passive income opportunities due to the robust rental market. The price-to-rent ratio of 21.32 suggests that rental properties are a profitable investment. With a rental vacancy rate of 7.5%, there is room for strategic investments to meet the persistent demand.

Job Market and Economic Growth

St. Louis boasts a diverse economy with strong sectors in healthcare, biotechnology, and finance. Major employers like BJC Healthcare and Washington University drive job growth and attract professionals to the area. This has resulted in a growing job market with low unemployment rates, making it an attractive location for both young professionals and families.

The city’s economic resilience is evident in its employment rates and the presence of major industries. This creates a stable foundation for real estate investments, as a healthy job market supports housing demand and sustains rental growth.

Urban Revitalization and Development

St. Louis is experiencing significant urban revitalization, with several neighborhoods undergoing redevelopment. Areas like Central West End and Botanical Heights are seeing an influx of new businesses and residents, which leads to increased property values.

Redevelopment projects and the arrival of new businesses contribute to a vibrant community atmosphere. This urban renewal not only boosts property values but also enhances the overall appeal of the city for investors.

Investors looking at the St. Louis market should consider these factors as they indicate a positive trajectory for property values and rental income. The city’s commitment to development and growth makes it a promising area for real estate investments.

Next, let’s explore the St. Louis housing market predictions to understand future market stability, inventory trends, and mortgage rate projections.

St. Louis Housing Market Predictions

Market Stability and Growth Potential

The St. Louis housing market has shown impressive stability and growth potential over the years. Historical trends indicate a steady increase in home values, with a 6.7% rise in the median sales price to $304,000 from June 2023 to June 2024 . This is higher than the national average, making St. Louis a strong contender for long-term investment.

Despite some fluctuations, the market remains resilient. The one-year appreciation rate stands at 6.2%, showing consistent property value growth. This trend is expected to continue, albeit at a slower pace, ensuring the market remains robust and attractive for investors.

Inventory and Buyer Opportunities

Inventory levels in St. Louis have been on the rise, particularly for townhomes and condos, which saw a 49.0% increase (source). This increase in inventory provides more options for buyers, potentially easing the competitive pressure seen in recent years.

With the months’ supply of inventory at about 2 months, the market is beginning to shift from a strong seller’s market to a more balanced one. This transition creates strategic buying opportunities for investors and homebuyers who can now be more selective and negotiate better deals.

Mortgage Rate Projections

Mortgage rates are a critical variable in the 2024 forecast. Currently hovering above 6%, these rates have impacted buyer activity, with some potential buyers being priced out of the market (source). However, if mortgage rates cool down later in the year as some economists predict, this could reignite buyer interest and further increase inventory.

Lower interest rates would also incentivize sellers to list their properties, fostering a more balanced market. For buyers, this means increased purchasing power and potentially more favorable loan terms. Staying informed about interest rate trends and working with a qualified mortgage lender can help buyers navigate these fluctuations effectively.

Next, let’s delve into the Frequently Asked Questions about the St. Louis Real Estate Investment Market to address common investor concerns and provide additional insights.

Frequently Asked Questions about St. Louis Real Estate Investment Market

Is St. Louis a good market to invest in real estate?

Absolutely. St. Louis offers a unique blend of affordability, economic growth, and cultural richness that makes it an attractive market for real estate investment. The average home value in St. Louis is around $177,243, making it one of the most affordable major cities in the U.S. Despite its affordability, the city is experiencing growth in home values, which is a promising sign for investors.

The city’s diversified economy also adds to its appeal. Key sectors include healthcare, education, and manufacturing. This economic diversity provides a stable foundation for real estate investments. Additionally, neighborhoods like Forest Park Southeast and Central West End are showing significant growth potential, offering excellent opportunities for both novice and seasoned investors.

Are house prices dropping in St. Louis?

Not at the moment. In fact, the median sales price for residential homes in St. Louis has risen by 3.5%, reaching $300,000. Townhouse and condo homes have seen an even more significant increase of 7.9%, with the median price hitting $219,000. This upward trend suggests that the market is stable and growing, making it a good time to invest.

However, it’s important to stay informed about market conditions. Economic factors, such as interest rates and job growth, can influence home prices. Consulting with local real estate experts can provide you with the most accurate and up-to-date information.

Is it a buyers or sellers market in St. Louis?

Currently, St. Louis is experiencing a competitive market with homes selling quickly. However, it still offers opportunities for buyers, especially given the reasonable prices and growth in property values. The market has seen a decrease in new listings and inventory, which has led to increased competition among buyers.

For sellers, this competitive environment can be advantageous as it often leads to quicker sales and potentially higher offers. For buyers, working with a knowledgeable real estate agent can help you navigate this competitive landscape and find the best deals.

In summary, whether you are a buyer or a seller, understanding the current market trends and working with experienced professionals will help you make informed decisions in the St. Louis real estate market.

Conclusion

Investing in the St. Louis real estate investment market offers numerous opportunities for both new and seasoned investors. At Mogul Realty, we strive to provide you with the insights and strategies needed to maximize your investment potential.

Market Insights

St. Louis boasts affordable home prices compared to the national average, making it an attractive option for investors. With an average home value of $169,352, you can purchase properties at a lower price point and potentially enjoy higher returns.

The rental market in St. Louis is also strong, with a high demand for rental properties and steadily increasing rental rates. This presents an excellent opportunity for generating passive income.

Moreover, the growing job market in St. Louis, driven by diverse industries such as healthcare, biotechnology, and finance, adds to the city’s appeal. This economic growth attracts young professionals and families, further boosting the real estate market.

Investment Strategies

To succeed in the St. Louis market, consider the following strategies:

• Buy and Hold: Purchase properties at affordable prices and hold onto them as their value appreciates. This long-term strategy can yield significant returns, especially in revitalized neighborhoods.
• Rental Properties: Invest in rental properties to benefit from the strong rental market. Steady rental income can provide a reliable cash flow.
• Urban Revitalization: Target areas undergoing urban revitalization. These neighborhoods often see a rise in property values, offering substantial growth potential.

Long-Term Benefits

Investing in St. Louis real estate can provide long-term benefits, including:

• Steady Appreciation: Historical trends and market forecasts indicate stable growth in property values.
• Increased Inventory: Rising inventory levels offer more options for buyers and create a balanced market.
• Economic Stability: The city’s diverse economy and low unemployment rates contribute to a stable real estate market.

Partner with Mogul Realty

At Mogul Realty, we understand the intricacies of the St. Louis real estate market. With two decades of experience, we offer expert guidance and tailored investment strategies to help you succeed.

Ready to take your real estate investments to the next level? Contact us today to explore the best opportunities in the St. Louis market.

In conclusion, St. Louis presents a unique blend of affordability, growth potential, and stability. By leveraging the insights and strategies provided by Mogul Realty, you can make informed decisions and reap the long-term benefits of investing in this vibrant market.