ST. LOUIS, MO/August 25, 2017 (STLRealEstate.News) The outlook for the St. Louis housing market is showing promise.
The median sales price and home sales jump 6 percent amid a tightening inventory, according to the latest numbers in the July St. Louis Realtors Housing Report. This comes after a less than impressive outcome for June, with the median sales price uncharacteristically flat and an atypical drop in sales volume.
St. Louis Realtors president Barry Upchurch calls this a rebound for the St. Louis housing market.
“The flat median sales price we saw in June, during the height of the summer selling season, was certainly a bit surprising,” Upchurch said. “The good news is what we saw in June appears to have been a market anomaly rather than a trend, as our median sales price and sales volume in July were up 6 percent compared to the same period a year ago.”
The median home sales price, covering MLS sales data for St. Louis city and county combined, increased from $179,000 in July 2016 to $189,900 this year. The number of St. Louis homes sold in July increased from 1,826 last year to 1,933 in 2017.
At the same time, July data support a tightening housing inventory as active listings were down 5 percent to 7,015 compared to 7,397 for the same month last year. Days on market dropped significantly from 150 in July 2016 to 92 days in July 2017. In addition, inventory for St. Louis city and county combined stands at a 3.6-month supply, compared to 4.1-month supply in July 2016.
According to economists, a 6.5 months’ supply is the ideal balance between supply and demand. A 3.6 month supply signifies a tight inventory and ultimately is considered a strong seller’s market.
“When you take a deeper look at sales within each pricing category, many home sales were in the mid-to-upper categories – $200,000 and above. That means a large number of lower-priced homes – which includes the first-time buyer market – were sold during the first six months of the year. The result is there are not as many homes available from which to choose within that particular housing category, and in turn more sales are taking place in the upper-market segments.” Upchurch explained.
John Gormley, St. Louis Realtors CEO, agreed: “The pricing cohorts for July reflect that homes sold in the under $200,000 category dipped below 50 percent – something we’ve not seen in our market lately. That dip underscores two things. First, the fact that many first-timebuyers in 2017 have already taken advantage of low interest rates and have invested in homes and their futures right here in St. Louis earlier in the year. Secondly, and as a result, there has definitely been a tightening of inventory within the first-time buyer market segment. The good news is there are still some great opportunities available within that market area; however, there are certainly fewer homes from which to choose.”
According to a realtor.com survey, 35 percent of homeowners are planning to sell their homes next year. More than half of those sellers are millennials. The survey suggests that as millennials begin to outgrow their first homes, they are poised to enter the move-up market – something that is predicted to significantly affect the housing market nationwide.