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Average price of a St. Louis-area home skyrockets to $324,000 as competition heats up

Average price of a St. Louis-area home skyrockets to $324,000 as competition heats up

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HOME ECONOMICS: With housing prices rising rapidly and inventory in short supply, buyers are getting into bidding wars in the St. Louis area. David Nicklaus and Jim Gallagher say the situation will persist until interest rates rise or until supply catches up with demand, which could take years.

ST. LOUIS — The price of homes sold in the St. Louis area jumped by an average of nearly $55,000 this spring, underscoring how competitive the local residential market has become.

The average sales price of a single-family home in St. Louis and St. Louis County spiked to $324,061, or by 20%, this May compared with last May, according to the latest data from St. Louis Realtors.

Sellers also sold 12.5% more homes this May, and those homes spent just 23 days on the market — 15 fewer days compared to May 2020, the data shows.

The market is in “hyperspeed” right now, said real estate agent Mark Massey of Berkshire Hathaway HomeServices Select Properties.

“Even when buyers are making offers higher than the asking price, they’re still not getting them,” Massey said. “There are a lot of frustrations. I’m having to play therapist more to keep them positive.”

Massey said he’s seen homes listed for $350,000 or under selling within a day, especially in growing areas like Edwardsville and Glen Carbon in Illinois. In Missouri, homes for $200,000 or under are almost impossible to find, he said.

Realtor Brian Adler, of online brokerage firm Real Broker LLC, said one of his buyers offered $16,000 over asking and waived the appraisal for a bungalow listed at $199,000 in the Dutchtown neighborhood of south St. Louis — and yet his buyer still lost out.

“It’s difficult to imagine, but it’s where we’re at now,” Adler said.

Home sales are up statewide and nationwide as well.

The average sales price of a home in Missouri grew 22% to $261,341 compared with May 2020, as the state saw 27% more sales, according to Missouri Realtors.

Missouri homes also spent just 28 days on the market in May, three weeks less than in 2020, data shows.

U.S. single-family home sales increased 39% year over year in May as the median existing single-family home price grew 24% to $356,600, according to the National Association of Realtors.

Homes stayed on the market an average of 17 days across the U.S., down from 26 days in May 2020. The association said 89% of homes sold in May 2021 were on the market for less than a month.

Bridget Forbes, also of Berkshire Hathaway, said it’s never been more of a seller’s market than now.

“If you have a difficult home to sell — it’s on a busy street or it has an odd floor plan — it’s definitely your year to do it,” Forbes said.

She said the historically low interest rates are driving people to buy.

The national average rate for a 30-year, conventional, fixed-rate mortgage was 2.96% in May, according to Freddie Mac. In 2020, the average rate was 3.23%.

“It’s an incredible time to buy,” Forbes said.

Still, real estate agents are seeing small signs the market may be swinging back into balance.

Massey, of Berkshire Hathaway, said he’s noticed that over the past month homes haven’t been selling as fast as before. It’s likely due to some people feeling more comfortable, getting busier, going on summer vacation and not home-hunting. In other cases, buyers are taking a break, too frustrated to keep searching, he said. It’s a not a slowdown, Massey said, but the market may be growing more bearable.

Forbes said homes now are getting eight offers whereas in the first quarter of 2021 houses were getting 10-20 contracts.

“Buyers are getting frustrated with the process and are just holding back a bit,” she said.

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