June 2023 St. Louis Real Estate Market Update
Temperatures are heating up, yet the housing market was cooler than usual for this time of year due to a combination of low inventory and higher borrowing costs, which have restricted market activity going into the summer homebuying season. Despite these challenges, the median sale price increased by 3.7% compared to June 2022, reaching $311,111 for June 2023, which marks the fifth consecutive monthly increase of 2023.
Although the number of sales are down by 14.9% year-to-date and days on market are up 28.6% to 36 days, sellers still managed to capture 103.1% of their asking price in June.
Buyers are feeling the pinch when it comes to having options. New listings were down by 17% in June 2023 and have fallen by 15.1% year-to-date. It’s somewhat contradictory to see prices going up while average number of days on market does the same, but it illustrates perfectly the relationship between supply and demand in real estate. Buyers have had 1,733 fewer listings to choose from in the St. Louis area this year. While less desirable and poorly marketed properties are now taking longer to sell, the best listings are still selling quickly and for more than the seller’s asking price.
→ If you prefer to digest this update visually, click here to skip to the graphs and data below.
What the Data Tell Us
1. Housing affordability is at a record low
The housing affordability index measures housing affordability for the region. For example, an index of 120 means the median household income is 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability. In July 2022 it was 116 and for June 2023 the housing affordability index has fallen to 96. As a point of reference, in January of 2018 it was just above 200.
2. Prices are up but St. Louis still offers value
Nationwide, the shortage of homes for sale has kept prices high for remaining buyers, with a national median sale price of $386,100 as of last measure, a 3.1% decline from the same time last year and the largest annual decrease since December 2011, according to NAR. The median sale price in St. Louis year-to-date is $111,100 lower than the national median, at just $275,000. Though prices are up in St. Louis, our housing prices remain low compared to much of the country. While coastal and high-cost cities see huge decreases in housing prices after periods of inflation, the St. Louis market tends to have a more tempered reaction because our prices don’t accelerate as aggressively, either.
3. Fall/Winter is a great time to buy
Real estate in the St. Louis market hits its highest peak in the summer and lowest valley in the winter, both in terms of the number of units for sale and the percent of listing price for which they sell. If current market conditions are making you feel hesitant, you may do well to wait until the cooler months to dip your toe. Buyers paid nearly 6% less than sellers were asking in January 2023 when compared to July 2022, and some years the difference is closer to 10%. With higher interest rates reducing affordability, every penny counts.
My Observations in the Field
Multiple offers may be cooling but we’ll have to watch the numbers to see if a trend develops. In June I was able to get one property under contract at asking price, another in Clayton after it took a $50k price reduction, and three for an investor client which were all below asking price.
This year feels different to the prior three. Summer in real estate is notoriously demanding with very little downtime and weekends booked solid with buyer showings. Though I’ve been busy, the workload felt more manageable than usual. I was grateful for more time at the pool and slightly slower pace of life.
There seem to be fewer showings happening. So many showings were taking place during the COVID pandemic that agents had to begin limiting how many could occur at once. When new listings hit the market, if we didn’t book our showing for the premier weekend we likely wouldn’t be able to get in at all before offers were due. Since the world has continued to return to pre-pandemic conditions showings have done the same, but in June everything felt quieter. I rarely ran into someone else showing a house at the same time as me, and didn’t have any scheduling issues with my listings.
I’m seeing more price reductions. Granted, any price reduction stands out these days since the market has been so strong and by no means am I seeing lots of them but I have observed more. The data doesn’t support the idea that prices are going down and that’s not what I’m suggesting either, but perhaps we’ll see prices start to level out toward the end of the year, and perhaps not!
Housing Market Statistics for
St. Louis City & County Combined
MEDIAN SALE PRICE
The median home sale price in St. Louis in June 2023 increased by 3.7% to $311,111 when compared to the same period of the prior year. Year-to-date the median sale price has increased 4% to $275,000.
PENDING SALES
The number of pending home sales in St. Louis inJune 2023 decreased by -10.6% to 1,677 when compared to the same period of the prior year. Year-to-date, pending sales have decreased by -14.9%.
CLOSED SALES
The number of closed home sales in St. Louis in June 2023 decreased by -18% to 1,718 when compared to the same period of the prior year. Year-to-date, closed sales have decreased -18.3%.
MONTHS OF INVENTORY
The number of months of inventory (i.e. supply) in the St. Louis housing market in June 2023 has increased by 6.7% to 1.6 months when compared to the same period of the prior year.
NUMBER OF UNITS FOR SALE
The number of units for sale in the St. Louis housing market in June 2023 has decreased by -13.8% to 2,268 units when compared to the same period of the prior year.
DAYS ON MARKET
The number of days on market in St. Louis for June 2023 is up by 27.8% to 23 days. Days on market year to date are up by 28.6% to 36.
PERCENT OF LIST PRICE RECEIVED
The percent of list price received by sellers in St. Louis for June 2023 has decreased by -1.9% to 103.1% when compared to the same period of the prior year. Year-to-date the percent of list price received has decreased by -2.5% to 101.2%.
This residential real estate data is representative of single family homes in St. Louis City & County combined, and is provided by Mid America Regional Information Systems. Some numbers may be rounded to the nearest whole number.
