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'The market has gone bananas' | Why rising prices will persist in the spring housing market

"We are so deep into seller’s market territory. I’ve never seen anything like it is my 10 years of real estate"
Credit: SLBJ

ST. LOUIS — The spring housing market is typically the busiest time of the year for the residential real estate industry. It’s a time of year when sellers are more apt to place their homes on the market. 

Will that finally bring a boost to the drastically low number of St. Louis homes on the market? Area real estate agents say don’t bet on it. 

As the spring market begins, local agents say they expect the market to continue to be defined by a low inventory of available homes for sale and rising prices. That dynamic has plagued the St. Louis market for several years but intensified during the pandemic. 

“The market has gone bananas,” said Sam Hall of The Warner Hall Group of Dielmann Sotheby’s International Realty. 

Inventory woes continue 

The spring market may bring more home listings, but Coldwell Banker Gundaker’s Stephanie Morgan says those gains likely will still be offset by an influx of buyers.

The market had just a 1.1-month supply of inventory — the number of months it would take to sell all homes on the market — in February, down from 2.1 a year ago, according to data published by the St. Louis Realtors trade group. Real estate agents often cite six months' supply of inventory as a metric signifying a balanced market, one that isn’t tilted to favor either buyers or sellers. 

“We are so deep into seller’s market territory. I’ve never seen anything like it is my 10 years of real estate,” Hall said. 

Competition is stiffest for starter homes, according to a research published by real estate firm Zillow Inc., with homes often receiving multiple offers. As buyers navigate the market, Morgan said she’s making sure clients understand the competition for homes is driving up prices. 

The median sale price for a home year-to-date through February was $233,827, up 20.2% from a year ago, according to the St. Louis Realtors.

“It’s not at all unusual for a house to sell for $30,000 more than list price. If somebody hasn’t experienced that, then that’s hard to swallow,” she said. 

Given the bidding wars and high prices, Hall said his advice to buyers is “don’t go crazy” and to have patience in the crowded market. He’s urging buyers to be creative by exploring temporary housing or off-market deals. 

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