St Louis Home Prices and Rental Increasing Faster Than Wages

A report just released by ATTOM data shows that St Louis home prices are rising at a rate significantly higher than the rate wages in St Louis are rising and St Louis rental rates are increasing at rates higher than home prices.  As the chart below shows, during the past year, wages in the St Louis metro area increased 3.8% however, home prices in St Louis increased 7.9% and rental rates increased 11.2%.

St Louis MSA – Housing Affordability

St Louis MSA - Housing Affordability 

Data source:  ATTOM Data – Copyright 2023 – all rights reserved, Guerrilla Brokers LLC

 

 

Franklin County Home Prices Increased at nearly double the rate for St Louis County From 2021 to 2022

The median price of homes sold in Franklin County increased from 2021 to 2022 at nearly double the rate the price of homes sold in St Louis County did during the same period.  As the chart below shows, the median price of homes sold in Franklin County during 2021 was $206,000 and then increased 6.7% to $219,800 in 2022. During the same period, the median price of homes sold in St Louis County increased 3.4% from 246,500 to $255,000.

Franklin County vs St Louis County Home Prices – 2021-2022

(click on chart for live, interactive chart)

Franklin County vs St Louis County Home Prices - 2021-2022

 

St Louis Home Prices Fall Over 12% And Sales Fall 40% In 6-Month Period

Kind of an attention-getting headline, huh?  At least it’s not as bad as a lot of the gloom and doom headlines I’m reading today about the real estate market.  Many folks out there are predicting a total meltdown of the housing market, and our economy as a whole for that matter.  Don’t get me wrong, I’m not drinking the “there’s nothing to see here” Kool-Aid, I do believe we are in for some rough times ahead, I am just not convinced it’s going to be as bad here in St Louis as in many parts of the country.

So back to the falling St Louis home prices and sales…

As the infographic below shows, the median price on homes sold in St Louis dropped 12.7% from June to December of last year and, during the same 6-month period, St Louis home sales declined 40%.  But, “I thought you said you weren’t gloom and doom?”.  Granted, this data doesn’t sound good but remember, the residential real estate market is very seasonal.  Prices and sales go up in the spring and down in the winter every year, during good markets and bad.  So, since June is often the peak of the market in terms of sales and prices, and December or January the trough where prices and sales fall to the lowest levels, this is normal.  The question is, whether the amount home prices sales declined in the past 6-months is pretty typical? As the infographic below illustrates both the decline in price and sales were the largest declines in the past 5-years.  The decline in sales in 2018 was close to this past year and the decline in prices in 2019 was close to this past year, but 2022 saw larger declines in both.

It’s something to watch close but not time to panic yet…

While the seasonal decline now is greater than is typical, it certainly is not as bad as some markets are seeing.  The big question is what is going to happen in the next couple of months?  Typically January sees another decline in sales from December and a slight decline in price and February is about the same or sometimes starts to show an uptick in prices.  So, depending upon how things turn out this month and next we’ll have a better idea of whether we’ll see the normal recovery from the winter season or if we’ll see the market continue to deteriorate.

New Home Construction In Midwest During Increased During Past 12 Months

Even though the number of new home building permits in the St Louis area has been on the decline, they’re been on the increase in the midwest region of which St Louis is a part. As the chart below illustrates, for the 12-month period ended last month, there are been 2,850 building permits issued for new privately-owned housing units in the midwest region of the U.S. an increase of 3.6% from he prior 12-month period when there were 2,746 permits issued. For just the month of November 2022, there were 197 permits, down nearly 8% from November 2021 when 214 permits were issued.

New home construction starts on the rise as well…

Depicted also on the chart below is the number of new homes where construction has actually begun, referred to as “starts”.  The number of starts always tends to be lower than the number of permits issued as there are many issues that could arise that would cause a home not to be built even though a permit was issued for it.  One of those issues could be the developer or builder’s sentiment about the market which, if trending unfavorably, may cause the developer to postpone adding to inventory.  However, even though we saw builder sentiment decline every month this year, the number of new home starts in the midwest region for the most recent 12-month period increased 5% from the prior 12-month period.  There were 2,657 new home starts in the 12-month period ended last month compared with 2,523 starts during the prior 12-month period.  For just November 2022, there were 215 starts, down just one from November 2021 when there were 216 starts.

  

Pending Home Sales Drop By One-Third In Midwest But St Louis Faring Better

The National Association of REALTORS (NAR) just released its pending home sales report for October 2022 which revealed pending home sales in the U.S. were down 37% from October 2021. The Northeast market had the smallest decline in year-over-year pending home sales with a decline of 29.5% followed by the Midwest with a decline of 32.1%, the South with a decline of 38.2%.  The west region of the U.S. saw the biggest decline in pending home sales with a decline of 46.2% from October 2021 to October 2022.

The St Louis market is performing better…

While the NAR does not publish pending home sales data for St Louis, MORE, REALTORS has its exclusive STL Real Estate Trends Report.  This report shows new contracts accepted during a period so, since a pending home sale starts with a contract being accepted, this gives us a very similar caparison.  As the table below shows, New Contracts in the St Louis 5-County Core Market for October 2022 were down 24% from October 2021. This is a significantly smaller decline in sales than reported at the national level (37%) or even for the Midwest (32.1%).

St Louis 5-County Core Market – New Contracts October 2022 vs October 2021

St Louis 5-County Core Market - New Contracts October 2022 vs October 2021

St Louis Real Estate Market Update – Video

Is the St Louis real estate market going to crash?  The national news is filled lately with reports of slowing housing markets throughout the country, increasing inventories, falling sales and prices.  Some prognosticators are predicting some metro areas will see home prices fall by as much as 40 or 50 percent.  Is the St Louis real estate market on a similar trajectory??  While I can’t predict the future, I can share data to help you see where the St Louis real estate market is currently as well as where the data shows it’s headed.  

In our MORE, REALTORS St Louis Real Estate Market Update video below, you can quickly and easily get the latest information on home prices, home sales, trends and more for the entire St Louis area!  

St Louis Real Estate Market Update - Video

Sell Your Home For The Highest Price In The Least Amount of Time!  See how- STLSellersAdvantage.com 
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St Louis Real Estate Market Report For October 2022

Below is our St Louis Real Estate Market Report for October 2022 for the City and County of St Louis combined.  You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below.

St Louis Real Estate Report for October 2022

(click on infographic for complete report including other counties)St Louis Real Estate Report for October 2022

Time On Market and Percentage of St Louis Listings With Reduced Prices Continues To Increase

As the infographic below illustrates, the time active listings in St Louis have been on the market is much greater than the time it took homes that closed last month to sell.  In addition, a much greater percentage of the current active listings have reduced their asking prices versus the sales that closed last month.

The most dramatic increase in days on the market was in St Charles County.   Active listings in St Charles County have been on the market a median time of 38 days, almost 5 times as long as the sales that closed in September where the median time on the market was just 8 days.  All 5 counties reported below saw the percentage of listings with a price reduction go up about the same, from twenty-something percent to forty-something percent.

Fannie Mae Predicts Lower Home Sales and Home Prices Next Year

Yesterday, Fannie Mae released their October housing forecast in which they forecast, among other things, where home sales and prices are headed.  The report incudes a forecast for next year, which included:

  • Home prices in 2023 to decline 1.5% from 2022
  • Home sales to finish 2022 down nearly 18% from last year and drop another 22% in 2023
  • New home construction to end 2022 down 3.6% from last year and drop another 25% in 2023.
  • Mortgage Interest Rates will continue to rise the rest of these year, ending the year at 6.7% and then will ease back to 6.4% in 2023.

See Fannie Maes Complete Housing Forecast HERE

Nearly Half The Active St Louis Listings Have Reduced The Asking Price

As the STL Real Estate Trends report below shows, as of last week, 43% of the active listings in the St Louis 5-County core market have a current asking price that is lower than the initial asking price.  This is more than a 100% increase from the same week last year when only 20% of the listings had a reduced asking price.

Franklin County saw the biggest increase in price reductions on listings  from last year with an increase from 14% to 47%.  Franklin County also has the highest percentage of active listings with a reduced price and St Charles County, at 38%, the lowest.

STL Real Estate Trends Report – Price Reductions

(click on report for most recent report)

STL Real Estate Trends Report - Price Reductions  St Louis 5-County Core Market

St Louis Real Estate Market Report For September 2022

Below is our St Louis Real Estate Market Report for September 2022 for the City and County of St Louis combined.  You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below.  Worth noting and remembering is not all data is created equally nor is all of what you see reported accurate.  Given the challenging and rapidly changing economic times we are in which are having an direct impact on the St Louis housing and real estate market, now, almost more than ever, you need to be sure the data you base your real estate decisions on is accurate and the agents you are trusting to get you through the process have the knowledge, information and accurate data they need to do so.  At MORE, REALTORS® we have developed proprietary software which uses the database we have created from the REALTOR® MLS (MARIS) to produce what we believe is the most accurate and relevant data and reports for the St Louis residential real estate market.  For example, currently, there are other sources reporting (and many, many real estate agents sharing the information without verifying) that the median price for homes sold in the City and County of St Louis during September was over 6% higher than our data shown below.  Think what an impact that could have on you if you base your decision to buy or sell a home on pricing data that is over stating the value.

Oh, how do we know we’re right?  We have proof, straight from the MLS, see the image below our infographic which is a screen shot straight from the MLS showing date for closed sales during the month of September in the city and county of St Louis.  You’ll find that the median price from the MLS is $250,000, the same as our data computed, the number of sales is a little higher in the MLS (20 or just over 1%) because while about 99% of sales are sent out in “feeds” to broker websites etc (including Zillow and Realtor.com) there are a few listings that are not and the DOM (days on market, or days to sell) at 10 is very close to our 12 (this is due to us using a slightly different method to compute median for the data).

St Louis Real Estate Report for September 2022

(click on infographic for complete report including other counties)
Continue reading “St Louis Real Estate Market Report For September 2022

House Payment On Typical St Louis Home Increased Over 50% In Past 12-Months (Infographic)

Click on the image below to see the InfographicHow Interest Rates Affect The Cost of a St Louis Home - Infographic

Why St Louis Home Prices Are Going To Decline

A little over two weeks ago I wrote my most recent article addressing St Louis home prices titled “Will St Louis Home Prices Decline?” in which my short answer was “yes”, but kind of tongue in cheek and based upon the seasonality of home prices, but my longer answer was more vague.  I mentioned that there certainly is a correction coming but pointed out that there are so many variables that will affect prices that it is hard to say to what extent this correction will be.  While this is still true, a lot has happened in the short time period since that article that has caused me to become more bearish on the St Louis real estate market to the point where I’m confident St Louis home prices will decline.

What has changed in the last 16 days…

  • While it doesn’t directly impact the St Louis market, hurricane Ian has wreaked havoc on a lot of Florida and other areas and will no doubt impact the overall housing market and economy and likely in more of a negative way.
  • Interest rates have risen another 1/2% hitting and staying near 7%.
  • The Mortgage Bankers Association (MBA) just announced that mortgage applications dropped over 14% during the last week of September, the biggest one-week drop in 17 months and pushed their index down to the lowest point since 1997.
  • The percentage of active listings that have reduced the asking price at least once broke the 40% mark.
  • The 12-month home sales trend for St Louis for the period ending September 30, 2022 fell to the lowest point in over 2-years.
  • Active listings in St Louis have been for sale a median of 43 days over four times higher than the median time to sell during the past 2 years of 10 days.

Market data pointing to lower St Louis home prices…

  • The declining sales trend mentioned above.  As chart 1 below shows, home sales during September in St Louis were down nearly 19% from last September.
  • The declining home price trend.  Chart 1 also reveals the median price of homes sold during September 2022 was $267,500, only 2.8% from then September 2021 when the median sold price was $260,000 which was a 8.3% increase from September 2020 when the median price was $240,000.
  • Showings on active listings continues to decline.  Chart 2 shows there are almost 10% fewer showings of active listings now then there were in the first week of January (the slowest time of the year).  Last year at this time showing activity was over 30% higher than now and in 2020 it was abut 55% higher.  Fewer showings mean fewer sales in coming.
  • The widening gap between home prices and rental rates.  Chart 3 shows the home price index (blue line) rising above the rental rates (red line) at a fairly steep rate. Historically, such as the late 1980’s – 2000 shown on the left side of the chart, these two lines track closely with home prices slight below the rental rates line.  The last time home prices started increasing more than rents was in the early 2000’s and this continue until the gap widened to the point that something had to give…either home prices had to fall or rents had to increase.  In 2008, the bubble burst and home prices fell.  While the present gap is not as large as it was during the height of the housing market bubble in 2006-07, we’re headed that way.
  • CPI and St Louis Home Price Index are hitting bubble levels.  Chart 4 shows the rate of change (year over year) in CPI and the  St Louis home price index.  The rate of change in both has already exceeded what in the past (with the exception of 1979 when it went a little higher) has triggered home prices to fall.
  • Home price and interest rate increases are killing St Lous home affordability.  Table 5 shows that currently, based upon median home prices and interest rates, one year of house payments (principal and interest only) take about 30% of the median household income for St Louis.  In 2007, at the peak of the housing bubble, it was only 21% and in 2000, which many economists use as a “normal” or baseline year, it was 20%.  So the real cost of a typical St Louis home to a typical St Louis family is about 50% higher now than normal.

St Louis Home Sales Trend Lowest In 2-Years with YTD Sales 9 Percent Lower Than Last Year

There are many headlines out there talking about home sales down 20% from last year on a national level but here in St Louis we are not seeing as large of a decline in home sales.  As the chart below shows, for the 12-month period ended August 31, 2022, there were 27,891 homes sold in the St Louis 5-county core market, which as the trend line (dark green) depicts is a declining trend we’ve seen for the past 11 months now.  This 12-month trend is the lowest trend since September 2020 when there were 27,572 homes sold in the prior 12-months.  However, year to date there are have been 17,480 homes sold in the St Louis area (lighter green line on the chart) which is only a little over 9% less than this time last year when there were 19,875 homes sold.

St Louis 5-County Core Market – 12-Month Home Sales Trend and YTD Home Sales

(click on chart for live, interactive chart)St Louis 5-County Core Market - 12-Month Home Sales Trend and YTD Home Sales

Mortgage Interest Rates Top 7 Percent for first time in over 20 years

Today, the interest rate for a 30-year fixed-rate mortgage hit 7.08% marking the first time in over 20-years the rate has gone above 7%.  Historically speaking, as the 2nd chart shows, this is not that high of an interest rate and, in fact, lower than the median rate over the past 50 years, however, it’s a very high rate based upon the the recent past.

The affect of interest rates on home prices…

Interest rates just began increasing in the past few months, rising above the 4% level in February, so it will take time to see the impact of this on home prices.  We’re beginning to see the effect in prices somewhat, particularly with the decrease of “overbids” and an increase in reduced prices on active listings, but nothing too dramatic yet.  For example, as the bottom chart shows, the median price of homes sold in St Louis in August was $280,000, a nearly 11% increase from the median price of $252,450 a year ago. Since home prices typically peak around June, they are usually lower in August than June or July.  If we examine this to see if perhaps there was a bigger decline in those months this year than last we find that last year prices dropped 3/4 of 1% from June to July and then dropped 4% from July to August, for a total decline of 4.7% from June’s peak to August.  This year, prices dropped 3.9% from June to July, then 1.7% from July to August for a total decline of 5.6%, only slightly higher than last year.  I do think we’ll see a larger impact than this, but thus far it’s not so bad.

 

Mortgage Interest Rates Based Upon the MND Rate Index

(click on chart for live, interactive chart)

Mortgage Interest Rates Based Upon the MND Rate Index

30-Year Fixed Rate Mortgage Interest Rates 1970-Present

(click on chart for live, interactive chart)

30-Year Fixed Rate Mortgage Interest Rates 1970-Present

St Louis 5-County Core Home Prices and Sales – Past 25 Months

(click on chart for live, interactive chart)

St Louis 5-County Core Home Prices and Sales - Past 25 Months

Will St Louis Home Prices Decline?

The short answer is yes.  They decline every year as we head into winter due to the seasonal nature of the business.  If you look at the first chart below which depicts the median price of homes sold in the St Louis 5-County core market since 1998, you will notice a very consistent pattern of prices rising in the spring and summer, then declining in the fall and winter.  For the most part, the other pattern you will see is that the peak each spring is higher than the spring before and the bottom each winter is higher than the winter before, but there are exceptions to that such as after the bubble burst in 2008.

So, as we head into the fall season, we can expect home prices to decline.  The question is, given all that is going on in the economy, including mortgage interest rates in excess of 6%, will the decline be more than the typical “seasonal adjustment”?  To address this, the first thing we can look at is the percentage decline we’ve seen in the recent past from the summer peak to September which is as follows:

  • 2019 – Summer peak to September –10.9%
  • 2020 – Summer peak to September – 0% (no change)
  • 2021 -Summer peak to September –1.9%
  • 2022 -Summer peak to September –10.2%

What this reveals is this years decline, while definitely larger than the last two years, is actually less than the decline in 2019 (which was a good market) so this doesn’t jump out as particularly alarming.  I think it’s worth saying that we are no doubt going to have a market “correction” or “adjustment” at a minimum because home prices could not simply keep increasing like they have been so this years seasonal adjustment may just be a return to normal.  Having said that though, since the “bottom” of the winter market price-wise doesn’t usually come until January or February, we will need to watch the next couple of months to see if this downward price trend remains consistent with historic norms or in fact picks up steam and looks like it’s headed for a bigger decline than normal.  My guess is at this point it the latter.  While I’m not a “gloom and doomer” in fact, I like to think of my self as an opportunist and see opportunities in challenging markets, I just think I’m being realistic.  There are a lot of moving balls in the air right now with regard to our economy and more unknowns than certainties in my opinion.

We can’t underestimate the impact of interest rates either…

St Louis Home Sales Trend Declines In August For the 11th Consecutive Month

The 12-month home sales trend in the St Louis 5-county core market declined in August to 27,840 homes sold in the 5-county area during the prior 12-months, marking the lowest 12-month sales number since September 2020.  As the chart below illustrates, the 12-month home sales trend in St Louis has declined now for 11-months in a row landing just slightly higher than the 12-months sales of 27,573 for September 2020.

The St Louis home sales trend is still higher than any period after August 2006 and prior to September 2020…

At the current level, the St Louis home sales trend is slightly above the trends prior to September 2020 going back to the peak of the bubble in August 2006 when there were 27,974 homes sale in the prior 12-months. However, if it declines further will be in the range of the years 2016 through mid-2020.

St Louis Home Price Trend Outpacing Sales…

The chart below also shows the median price per foot for homes sold during the prior 12-month period.  As it shows, the home price trend has continued to increase while the sales trend has been declining however that changed in June when the price trend started declining.  If you look back t prior years you will see that is earlier than when the normal seasonal adjustment comes so it is likely indicative of the market.

Year To Date Home Sales in St Louis Metro Area Down Nearly 11 Percent From Last Year

There have been 21,164 homes sold in the St Louis Metro area during the first 7-months of this year which, as the STL Market Chart below illustrates, is a decline of 10.7% from the same time last year when there were 23,709 homes sold.

2022 home sales fairly consistent with 4 out of 5 prior years…

As I stated above, St Louis YTD home sales are lagging behind last year however, last years sales appear to be the market peak and the difference, as shown below,  between current YTD sales and the years prior to last year is not as significant.

  • Through July 2020, there were 21,344 homes sold in the St Louis MSA, less than 1% more than this year.
  • Through July 2019, there were 21,702 homes sold in the St Louis MSA,  2.5% more than this year.
  • Through July 2018, there were 22,095 homes sold in the St Louis MSA, 4.4% more than this year.
  • Through July 2017, there were 21,994 homes sold in the St Louis MSA, 3.9% more than this year.

St Louis slowing home sales trend appears to increasing….

Below the chart is our STL Market Report for the St Louis metro area, which shows there were 40,171 homes sold during the 12-month period ended July 31, 2022,  a decline of nearly 6.5% from the prior year.  This, in contrast to the double-digit decline noted above for the most recent 7-months of that 12-month period indicates that the slowing home sales trend is increasing.  We’ll get a lot more clearer picture of this in the next month or two as we see what happens in the economy, interest rates, etc.

One-Third Of St Louis Homes Listed For Sale Have Reduced The Price

We continue to see more price reductions on listings, or, as some agents prefer to refer to them as “price improvements”, throughout the St Louis area.  As the infographic below depicts, as of today one-third of the active listings in the St Louis 5-County core market have a current asking price that is below their original price.

Nearly One-Third Of St Louis Homes Listed For Sale Have Reduced The Price

Price reductions are quickly showing up more and more on real estate listings in the St Louis area.  As the Infograph below illustrates, 31% of the current active listings in St Louis have had at least one price reduction.  Since the price homes sell at isn’t known until closing and a home sale typically takes 4 to 6 weeks to close, the actual sold prices won’t reflect these price reductions for a while.  For example, in the past 30 days (through today) there have been 2,381 closings of home sales in the 5-county St Louis core market at a median price of 104% of the original list price.  In about a month we’ll revisit that stat and see how things look.

The Coming Recession and Its Potential Affect on St Louis Home Prices

Ever heard the expression “It’s not if, but when..”?  That is something that I’ve heard for a while now about a recession.  With everything that has happened to our economy including rising interest rates, rising inflation, the government printing more and more currency and running up greater debt, it seemed inevitable we would see a recession.  To officially be in a recession, the GDP (Gross Domestic Product) has to fall for two successive quarters.  For the first quarter of this year, GDP declined at an annual rate of 1.6%.  The second quarter GDP numbers won’t be released until later this month (July 28th) however, the GDPNow forecasting model of the Federal Reserve Bank of Atlanta is forecasting a decline of 2.1% in GDP for the 2nd quarter of this year at this point.  If their forecast is correct, we will officially be in a recession.

What happens to St Louis home prices during a recession?

There are many factors at play in every recession that make them unique, such as unemployment rates, interest rates, etc, making it unrealistic to think that home prices are going to behave the same way during every recession, however, I thought it would be worth looking at what happened during the last couple of recessions.

2020 Recession (Q1 and Q2) 

We had a short recession in early 2020 caused primarily by COVID that only lasted the minimum period of two quarters.  During this period, as the chart below shows, St Louis home prices continued to increase at a fairly consistent rate.  In 2019 the median price of a home in the St Louis MSA was $188,575 and in 2020 it was $208,000, an increase of 10.3%.  Then in 2021, the year after the recession, the median St Louis home prices was $227,000, an increase of 9.1% from the year before.

Over One-Fourth of St Louis Homes For Sale Have Reduced Asking Prices

Price reduction, what’s that?  All we seem to have heard about the last couple of years with regard to home prices is how much OVER the list price buyers were having to pay in order to buy a home.  So, to be talking about price reductions today seems odd. However, as the infographic below illustrates, there have been listings with price reductions over the past couple of years, it’s just the current level of them is higher than we have seen in a while.

New Listings To New Contracts Ratio Increases This Month

For the first three weeks of June there were 1,475 new listings of homes for sale in the St Louis 5-county core market, according to the STL Real Estate Trends Report from MORE, REALTORS®.  During the same period, there were 1,194 new contracts written on homes for sale resulting in a new listing to new contract ratio of 1.25.  This ratio of listings to new sales is higher than it was 3 weeks ago when I shared the last update from the STL Real Estate Trends report and it was 1.05 at that time for the period reported which was the first 3 weeks of May.

It was at the end of last week that the mortgage bond market blew apart forcing mortgage interest rates up so when our new report for this week is release next Thursday we’ll see what effect that had on the market.

Will Home Prices Come Crashing Down?

After over 40 years in the real estate business in St Louis I’ve seen many times just how fast a good, or even great housing market can turn sour as well as the other way around.  Two years ago, economic conditions relevant to the housing market included:

Today, the above conditions are:

Does this mean St Louis home prices will come crashing down?
First off, I’m not an economist, in fact I didn’t even attend college and I certainly don’t have a crystal ball showing me the future, but I am a data junkie that has lived through a variety of markets spanning more than 4 decades.  My experience as well as my study of past markets as well as current indicators of things to come certainly give me an opinion.  In times past, my opinions on the market have been spot on, almost to the point that I even surprised myself (such as in October 2006, at the peak of the housing boom when I predicted the collapse) and other times I’ve been wrong, sometimes way wrong.  The reality is that the housing market is affected, or can be affected by so many different economic factors, as well as social issues, consumer sentiment and more that I don’t believe anyone can predict what it’s going to do accurately consistently.

St Louis YTD Home Sales Down Nearly Nine Percent From Last Year

There have been 9,645 homes sold in the St Louis 5-county core market during the first 5-months of this year which, as the STL Market Chart below illustrates, is a decline of 8.8% from the same time last year when there were 10,579 homes sold.

2022 home sales outpacing 2020…

While this years St Louis home sales are lagging behind last years, as the chart below also shows, 2022 YTD home sales is 2.8% higher than in 2020 when there were 9,382 YTD home sales.

$1 Million+ home sales going strong…

The bottom chart shows there have been 189 one-million dollar+ homes sold in St Louis year-to-date through May 31st, a slight increase over last year when there were 187 homes sold during the period.  This years $1,000,000+ home sales are 89% higher than they were during the period in 2020.

St Louis Home Values Declined In Past 12-Months After Inflation

With the bidding wars we’ve seen on listings resulting in sold prices that exceed the asking price in St Louis over the past couple of years, it’s hard to imagine that home values could be lower today than a year ago.  Now, before you call me crazy, I’m not saying that St Louis homes are SELLING for LESS now than a year ago.  As our STL Market Chart below shows, the median price of homes sold in the St Louis 5-county core market was $254,950 in May 2021 and $270,000 last month, for an increase in sales price of 5.9%.  However, given that, as the chart at the bottom shows, the inflation rate has increased 8.6% during the past 12-months, St Louis home prices have not increased as much as inflation, thereby leaving them worth less today than they were worth a year ago after adjusting for inflation.

Home prices last month would have needed to be $276,829 to keep pace with inflation…

In order to keep pace with inflation and make a median-priced St Louis home worth the same in today’s dollars as it was worth a year ago it would have be worth $276,829 today at the current rate of inflation.

If we look farther back it gets better….

New Home Building Permits In St Louis For Most Recent 12-Months Decline Nearly 10 Percent

There were 5,138 building permits issued for new single-family homes in the St Louis area during the 12-month period ended April 30, 2022, a decrease of 9.69% from the same period a year ago when there were 5,138 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA).   Four of the seven counties covered in the report saw a double-digit decrease in building permits from the same period a year ago.


  

St Louis New Home Building Permits -April  2022

St Louis New Home Building Permits -April  2022

 

Pending Home Sales Increase In Midwest Region In April…down in all other regions

The pending home sales index from the National Association of REALTORS® (NAR) was released showing the midwest region as the only region that had an increase from March to April.  According to the NAR report below, the pending home sales index for the midwest increased 6.6% from March to April while declining 3.9% for the nation as a whole.  As the table below shows, all while all four regions in the U.S. saw a decline in the pending home sales index from a year ago, the midwest fared the best again showing only a 2.8% decline while the other regions all saw a double-digit decline.

National Association of REALTORS®

Pending Home Sales Index (PHSI)

National Association of REALTORS®  Pending Home Sales Index (PHSI)

 

 

St Louis New Listings to New Contracts Trend Remains Steady

For the first three weeks of May there were 2,115 new listings of homes for sale in the St Louis 5-county core market, according to the STL Real Estate Trends Report from MORE, REALTORS®.  During the same period, there were 2,019 new contracts written on homes for sale resulting in a new listing to new contract ratio of 1.05.  This is pretty consistent with the recent trend with new listings slightly outpacing new sales.  As the tables at the bottom show, for April there were 3,470 new listings and 3,269 new contracts written for a new listing to new contract ratio of 1.06.

St Louis Home Sales Doing Well In Spite of Rising Interest Rates & Inflation

There have been a lot of reports over the past month about rising interest rates (mortgage rates on a 30-year fixed-rate mortgage hit 5.27% last week) as well as rising inflation rates (8.5% in March) and the effect these things will have on the housing market.  It’s no doubt they will have some affect on home prices and sales and I have been watching the data on St Louis home prices and sales closely and so far there does not appear to be much impact.

St Louis home sales increase in April from March…

There are two ways we analyze home sales at MORE, REALTORS®;  the traditional manner, which is what almost all public reports are based upon, closed sales (which are really indicative of what the market was like 1-2 months previously since that is when the contracts were typically written) and then by use of our STL Real Estate Trends Report, which gives us a better idea of the current activity.  Our trends report shows the number of new contracts written on listings, so current sales activity as well as the number of new listings entering the market.  The good news is, when looking at St Louis home sales activity for April, both closed sales and newly written contracts increased from the month before.

As our chart below shows, there were 2,134 homes sold in St Louis (5-county core market) during April, a 6.4% increase from March when there were 2,005 homes sold.  As the STL Real Estate Trends Report shows, there were 3,279 new contracts written on homes during April in the St Louis 5-county core market, an increase of 5% from the prior month when there were 3,124 contracts written.