Knowing your market when negotiating real estate in St Louis is essential. It is just as important to the seller as the buyer.
The St Louis real estate market was in “catch-up” mode for most of 2016. Through April 2019, it is spotty depending on location and price points. Some areas are hot with low inventory and others are on the edge of being buyers markets. (See months of inventory statistics below.) Negotiating real estate contracts in the sellers markets can be a real challenge. Multiple offers on a single property the moment it is entered into the MLS is common.
The most significant numbers to be mindful of when negotiating real estate are the months-of-inventory. This number tells you the number of months it would take for all of the currently active listings to sell. Four to five months of inventory is considered a balanced market, equal for buyer and seller. Under four is considered a seller’s market and, of course, over 5 is considered a buyer’s market.
This number can also give you an indication if things are changing from one type of market to another. It is also important to note what markets are hot and the ones that aren’t, because all things aren’t equal in the St Louis metropolitan area.
The significance of being in a seller’s market for the buyer is knowing the offer they make is going to need to be aggressive. The financing contingency should be as attractive as possible. It is of primary concern to the seller. During the frenzy of 2016, many buyers were making offers with no financing contingency and no appraisal contingency. This is very risky in a market where values are going up. These buyers needed to be prepared to make a larger down payment if the appraisal didn’t meet their offer. For the sellers in this market, many of them were in the proverbial “driver’s seat”. Certain markets and price points are experiencing low inventory in 2018 also.
Listed below are several areas in the metropolitan area showing the months-of-inventory for the last two years. As you can see, there is variation.
(All information herein has not been verified and is not guaranteed. Copyright © 2017 MARIS. All rights reserved.)
Some additional comments about the current St Louis market are that neighborhoods in St Louis City are realizing growth. Much of this could be due to the the Cortex Innovation Community which is home to a vibrant 200-acre innovation hub and technology district integrated into St. Louis’ historic Central West End and Forest Park Southeast residential neighborhoods. It has brought in over 3000 jobs to the metropolitan area in the last few years. Many of the new St Louisans are millennials who like to be close to work.
Another boost to the St Louis are is the announcement of the NGA’s billion-dollar move. The decision means the city will keep 3,100 jobs, currently housed at the Old Arsenal complex south of Anheuser-Busch brewery, and move them to a $1.75 billion development just northwest of downtown. The move is expected to further the city’s pursuit of redeveloping the near North Side with a massive federal anchor — something that could lure more investment to the struggling area, but also give a major boost to nearby Washington Avenue.
The median sale price single family homes in the 4th quarter in St Louis (National Association of Realtors) was $174,100 up 4.4% over 2017; and overall for the year of 2018 in St Louis the median sale price was $177,500. The national median existing single-family home price in the 4th quarter of 2018 was $257,600, up 4.0 percent from the fourth quarter of 2017 ($247,800).
Home affordability for the St. Louis housing market is still among the lowest metropolitan areas according to interest.com.
Click here to watch the trends throughout the metropolitan area.
For more detailed information, contact me and we can delve into the specifics of your neighborhood and neighborhoods to which you may be interested in moving.