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Hoping for a drop in St. Louis property prices in 2025? Don’t count on it.
Despite economic shifts, the St. Louis market is poised for growth, with demand outpacing supply and driving prices upward.
Let’s explore why property values in this city are expected to rise in 2025.
We rely on solid, up-to-date data and statistics from multiple credible sources, ensuring our analysis is grounded in fact, not speculation.
By examining this data closely, we draw our own conclusions, which we share at the end of this blog post. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) Redfin considers the St. Louis real estate market to be "very competitive."
Signal strength: strong
The fact that Redfin ranks the St. Louis real estate market as "very competitive" is a strong indicator that housing prices are likely to rise in 2025. When a market is labeled as "very competitive," it typically means that there is a high demand for homes, which often leads to an increase in prices.
In St. Louis, the most competitive properties are single-family homes in the suburbs. These areas are particularly attractive because they offer more space and a family-friendly environment, which is highly sought after by buyers.
People are drawn to these suburban homes because they provide a balance of affordability and quality of life, making them a popular choice for families and first-time homebuyers. As demand continues to outpace supply, prices are expected to rise in these areas.
If the market were to become "less competitive," it could signal a potential stabilization or decrease in housing prices, as demand would not be as strong.
Source: Redfin
2) Home values in St. Louis have risen by 7.5% since last year, and this trend may persist
Signal strength: strong
The fact that home values in St. Louis have already changed by 7.5% since last year is a strong indicator that the housing market is on an upward trend. This increase suggests that demand is growing, and if this trend continues, it could mean higher prices in the future.
Currently, the median home price in St. Louis is around $175,443, which is relatively affordable compared to other major cities. Additionally, the median sales price per square foot is around $153, indicating that buyers are willing to pay more per unit of space, further supporting the idea of rising prices.
These statistics show that the market is becoming more competitive, which often leads to price increases. If you're considering investing, these signals suggest a potential for growth in property value over the next few years.
However, if the home value change were to drop below 3%, it might indicate a cooling market, challenging the assumption of rising prices.
Source: Redfin
We created this infographic to show how property prices in St. Louis compare to other big cities in Missouri. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) Three major websites confidently predict that home prices in St. Louis will rise in 2025
Signal strength: strong
There are currently three major websites forecasting a positive growth for home prices in St. Louis in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with a projected increase of 7.10% in home prices, followed by Redfin at 4% growth, and finally Zillow with a more modest 1.70% increase. The significant gap between these predictions highlights the varying levels of confidence among experts.
While these forecasts are encouraging, it's important to remember that predictions should be taken with caution as they are based on current trends and assumptions. We will also rely on strong, reliable, and actual data to make a well-informed decision about investing in this market.
If these forecasts were to predict a negative growth in home prices, it would suggest a different outlook for the St. Louis housing market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
4) A local in St. Louis could afford a house in about 3.1 years, which is relatively quick
Signal strength: moderate
In St. Louis, it currently takes around 3.1 years for a local to buy a house, which is relatively short compared to many other cities. This suggests that housing is still quite affordable for the average resident, making it an attractive market for potential buyers.
The median household income in St. Louis is approximately $56,245, which is a decent income for the area. With the median home price being around $175,443, homes are within reach for many families, indicating a healthy demand.
As demand increases, it's likely that housing prices will rise in 2025 as more people look to buy. This affordability and demand dynamic is a key signal for potential real estate investors considering this market.
If the time to buy a house were to increase to 5 years or more, it might suggest that prices are stabilizing or even decreasing.
Source: USCensus
Our team designed this infographic to show how competitive the real estate market in St. Louis is vs. other major cities in Missouri. It shows the percentage of sales above the list price, a key indicator of market competition.
5) St. Louis offers a good quality of life with a livability score of 74
Signal strength: moderate
The livability score of 74 in St. Louis is considered good because it reflects a balance of amenities, cost of living, and quality of life.
One reason for this score is the affordable cost of living, which is lower than the national average, making it attractive for families and young professionals. Additionally, St. Louis boasts a rich cultural scene with numerous museums, theaters, and music venues that enhance the quality of life for residents.
Another factor contributing to the livability score is the strong sense of community found in neighborhoods like The Hill and Soulard, where local events and festivals are common. These characteristics make St. Louis a desirable place to live, which in turn can drive up housing demand and prices.
If the livability score were to drop below 65 due to increased crime rates or a decline in public services, it might signal a potential decrease in housing prices instead.
Source: AreaVibes
6) In St. Louis, about 39% of homes sell for more than their listing price
Signal strength: moderate
In St. Louis, around 39% of sales close at a price higher than the listing price, which is a strong indicator of a competitive housing market. This means that buyers are willing to pay more than the asking price to secure a property, suggesting high demand.
When demand is high, it often leads to increased competition among buyers, which can drive prices up. As more people are eager to buy, sellers gain confidence in setting higher prices, anticipating that buyers will meet or exceed these prices.
This trend of buyers paying above the listing price is a signal that housing prices are likely to rise in the future. However, if the percentage of sales closing above the listing price were to drop significantly, say below 20%, it might indicate a cooling market where prices could stabilize or even decrease.
Source: Zillow
This infographic we have made will show you how market values have changed during the last decade in St. Louis vs other major places in Missouri. Here, the percentage increase or decrease in market value will help you see long-term trends.
7) St. Louis offers homes at prices 60% lower than the national average
Signal strength: minimal
The fact that St. Louis has a median home price that is 60% below the national average suggests that there is significant room for growth in the housing market. This disparity indicates that St. Louis is currently undervalued compared to other cities, making it an attractive option for potential investors.
In St. Louis, the most expensive properties are likely to be luxury homes located in affluent neighborhoods such as Clayton or Ladue. These areas are known for their high-end amenities and excellent school districts, which drive up property values.
On the other hand, the cheapest properties are often small, older homes in less developed areas like North St. Louis. These properties may require significant renovation and investment to increase their value, but they offer potential for substantial returns.
If the median home price in St. Louis were to rise significantly above the national average, it might suggest that the market is becoming overvalued, which could deter investment.
Source: Zillow
8) St. Louis boasts a strong employment rate of 65.6%
Signal strength: minimal
The employment rate in St. Louis is at 65.6%, which is considered high compared to the national average in the United States.
This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing as people look to buy homes. The major employment sectors in St. Louis include healthcare, manufacturing, and financial services, which are known for providing stable and well-paying jobs.
Some of the major employers in the area are Boeing and BJC HealthCare, which employ a significant number of people and contribute to the economic stability of the region. With more people employed, there is a higher likelihood of increased purchasing power, which can drive up housing prices as demand rises.
If the employment rate were to drop below 60%, it might indicate a weakening economy, potentially leading to a decrease in housing demand.
This infographic designed by our team breaks down the latest livability score in St. Louis but also in other big cities in Missouri. It provides a clear view of which locations offer the best overall living conditions, which is a good thing to know if you want to buy real estate.
9) In St. Louis, home prices have steadily increased by an average of 5.6% each year over the past decade
Signal strength: minimal
The fact that home prices in St. Louis have appreciated at an average rate of 5.6% over the last decade is a noteworthy signal for potential investors. This consistent growth rate suggests that there has been a steady demand and price growth in the housing market over the years.
Such a positive trend can indicate that the market conditions have been favorable for price increases, which might continue into the future. However, it's important to remember that past performance doesn’t guarantee future results, so one should consider other factors as well.
Despite this, historical data like this is still a valuable indicator to consider when evaluating potential investments. It provides a context that can help investors make more informed decisions about the market's potential.
If the average appreciation rate were to drop significantly, say below 2% over a similar period, it might suggest a different trend and warrant a more cautious approach.
Source: NeighborhoodScout
So, are prices going to climb in St. Louis in 2025? Yes, they are!
St. Louis is poised for a rise in housing prices in 2025, driven by several compelling factors.
Firstly, the market is labeled as "very competitive" by Redfin, indicating high demand, especially for single-family homes in the suburbs. This demand is fueled by the desire for more space and a family-friendly environment, which is highly sought after by buyers. As demand continues to outpace supply, prices are expected to rise.
Additionally, home values have already increased by 7.5% over the past year, with a median home price of $175,443. This upward trend is supported by forecasts from major websites like Realtor, Redfin, and Zillow, predicting growth rates of 7.10%, 4%, and 1.70% respectively. These predictions, combined with a strong employment rate of 65.6% and a livability score of 74, suggest a healthy and attractive market.
Moreover, the fact that 39% of homes sell for more than their listing price further underscores the competitive nature of the market. With homes priced 60% lower than the national average, there is significant room for growth, making St. Louis an appealing option for investors. All these factors combined point to a likely increase in housing prices in 2025.
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