The housing market in St. Louis is active, but sellers face growing reality. There’s little money for their home
In St. Louis, there is a risk that 10% of all listings will sell because they are less than the homeowners bought them. This is the sixth highest among the top 50 metros, up from its 8% share last year. Nationwide, there is a risk that 6% of sellers will lose money on sales.
However, shares vary widely depending on when someone bought their home, and those who buy these days tend to be at greater risk.
16% of post-pandemic sellers risk losing money on sales, compared to 16% nationwide. 14% of sellers who purchase during the pandemic risk losing money on sales. Nationwide, this share is 9%. Seven percent of sellers who bought before the pandemic risk losing money on sales that are well above 2% nationwide.
St. Louis reflects broader Midwest trends. Affordable homes, seller friendly situations, strong demand for price increases. However, Gateway City will destroy regional trends, and sellers are much more likely to sell at a loss than affordable Boolean Walk (6.4%) and Cleveland (2.6%).
That’s not to say that home sellers in St. Louis actually lose and sell. Sellers facing financial losses usually pay the asking price and wait until they find a buyer willing to return home from the market or rent. Moreover, the majority of sellers still make money from home sales. Nationwide, 94% of homes are on sale than they buy, compared to just 37% in 2012.
How has the housing market changed since the pandemic?
During the pandemic, the housing market in St. Louis was hot, but relatively calm. Many home buyers instead rushed to the Sunbelt to take advantage of the nice weather and low mortgage fees to photograph available homes. As a result, prices skyrocketed in the area and people began to search for affordable homes – mainly rust belts.
Now, across the Midwest and Northeast, prices are rising, and stocks are falling as buyers compete for limited supply. Still, many sellers have left an incredible sale.
A drop in prices creates a bigger gap
If prices fall by the end of the year to match Redfin’s forecasts, more sellers will be more susceptible to losing money at home. Even the most affected metros will see a significant increase in New Brunswick, New Jersey, Providence, and RI.
If prices drop at the predicted 1%, 11% of the St. Louis list is at risk. A 3% drop in price puts 12% at risk. A 5% drop in price puts 14% at risk.
Those who bought before the pandemic face the lowest risk of losing and selling, but the lower mortgage rates make them less likely to move in the first place.
How buyers and sellers navigate the St. Louis market
The St. Louis housing market has changed dramatically since the pandemic, creating more pressure for buyers and opportunities for sellers.
Buyers: Market buyers can face competition due to increased housing costs and fewer homes in the market. They should hire great agents, prepare to negotiate, and move as soon as the right home arrives. Sellers: Sellers have more power in St. Louis than in many parts of the country thanks to strong buyers’ demand. Prices are fairly common, those who don’t have the bargaining power they had during the pandemic may need to provide incentives to bravely attract today’s markets.
Complete Metro-level data
Methodology
The largest US Metros of the 50 largest are based on a Redfin report that analyzed the active list of MLS in May. All housing data is from Redfin.
The report identifies the share of sellers who are actually losing their homes and selling them, not the share of sellers who are at risk of losing their homes and selling them, and does not take into account the costs of closing. The pandemic was defined as the highest rise in home prices between July 2020 and July 2022. For more information, see the methodology in the original report
