Low inventory may be the biggest story of real estate in the last year, and it looks like it will continue that way for quite some time. This is causing all sorts of other issues from rising prices to insane bidding wars. The most recent local numbers show some interesting trends.
It should be mentioned from the outset that this problem is by no means particular to St. Louis. Low inventory has been a building issue across the country for some time now. Inman is currently running a series of articles on “Inventory insanity,” talking with real estate agents from around the country on the frantic state of affairs in both the national market and their local communities.
Some factors cited by the different agents include a rising Millennial generation, greater flexibility afforded by remote work, and of course low interest rates. Several of the agents quoted by Inman report homes being sold far above asking price—by as much as $1 million—as well as widespread desperation amongst would be homebuyers who feel unable to close on a house.
So how do things stand in St. Louis?
According to the most recent data from St. Louis Realtors, home inventory has stayed essentially flat from February to March, although it is still down significantly from last year. In March 2021, there were 2,002 homes for sale in the St. Louis market, down only slightly from 2,023 in February. But while it was flat compared to the prior month, inventory was down dramatically year over year. Last April, there were 3,808 homes on the market. Inventory has dropped 46.2% in the last year.
As it currently stands, there is a 1.1 month’s supply of inventory. Meaning that at the current rate of sales, all the homes on the market will be sold in just over 1 month. For perspective, a healthy market will generally have around six month’s supply give or take. St. Louis has had low supply historically, but it has dropped by 50% in the last year.
The price of homes has changed to match the low supply. The average price of a home sales actually went down slightly from $309,288 in February to $303,955 in March. At the same time, the average percentage of listing price received rose to what is perhaps a record high for the region at 101.2%.