There have been 10,070 Homes sold in St Louis this year so far (through May 31, 2016), in the 5-county core St Louis market, an increase of 8.7 percent from the same time last year when there were 9,261 homes sold. As the table below shows, this years home sales is outpacing the prior 4 years thus far. The core St Louis market is comprised of the city of St Louis as well as the counties of St Louis, St Charles, Jefferson and Franklin.
Pending home sales up as well but could show slowing trend…
At the chart below illustrates, year to date pending home sales (homes with contracts on them that have not closed yet) have increased 5 percent from the same time last year. Through the end of May, 2016, there have been 10,953 pending home sales in St Louis up from 10,433 the same time last year. With the closed home sales being up 8.7 percent, but pending home sales up only 5 percent, that would indicate one of two things: either a higher percentage of pending sales are closing and fewer failing along the way, or pending sales, a good leading indicator of the housing market, are slowing meaning we are going to possibly lose of some of the increase in home sales from last year over the coming months.
Declining Inventory Is The Problem…
To answer the question I raised above as to the reason for the slowdown in the rate of pending home sales, I looked at what I suspected to be the problem: inventory. As the chart at the very bottom below shows, while home sales have been on the rise in the 5- county core St Louis real estate market, the inventory of homes for sale has been on the decline. In May 2015, there were 2,540 homes sold in the St Louis 5-county core market and there was a 3 month inventory of homes for sale. Last month, there were 2,735 homes sold and only a 2 month supply of homes for sale. That decline of 33% in the supply of homes for sale is no doubt to blame for the decrease in pending home sales…if there is nothing on the market to buy there won’t be sales, simple as that.
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St Louis 5-County Core Market* Year to Date Home Sales
Data Source: MARIS
*Includes the city of St Louis and the counties of St Louis, St Charles, Jefferson and Franklin (through May 2016 compared with same period on prior years)
St Louis 5-County Core Market* Year to Date Pending Home Sales
Data Source: MARIS
*Includes the city of St Louis and the counties of St Louis, St Charles, Jefferson and Franklin (through May 2016 compared with same period on prior years)
St Louis 5-County Core Market* Home Sales vs. Inventory of Listings – May 2014-May 2016
Source: MARIS
*Includes the city of St Louis and the counties of St Louis, St Charles, Jefferson and Franklin