Real estate markets fluctuate daily, and while many regions follow national trends, some have their own specifics. When investing in real estate, you know that location is a key factor, and local market conditions can drag down your return on investment. It’s also important to note that economic, political, and social factors play a role in real estate metrics. Because of this, it’s essential to stay on top of local and national conditions to know if the elements are working for or against each other. Knowing what to look for and spotting trends is vital for any investor who wants to maximize return on investments, optimize strategies, and successfully enter new markets.
The Benes Group has compiled research on both national and local market trends to help get you started.
National market trends
Throughout most of 2022, there was pressure on the housing market, causing home prices to hit record numbers across the nation. December saw mortgage rates beginning to decline, which is a positive for buyers, but what will happen throughout the rest of the year?
The jury is still out on whether home prices will begin to decline or whether the market will hit a slump. The overall housing supply across the nation remains low because many who have purchased homes in recent years and jumped on the pandemic rate drop are staying put. The tight inventory has likely kept prices from dropping significantly, which makes many homes unaffordable to some buyers. Despite home prices remaining relatively high, they’re not as bad in today’s market as they have been throughout the past year. Experts predict that with the economy being pushed and pulled in various directions due to inflation, steep interest rates, and fear of recession, it’s best to keep a watchful eye on things.
As it stands, mortgage interest rates are beginning to cool off after the sudden increase in recent years. The median home prices are sitting at around $359,000, according to the National Association of Realtors (NAR). This represents a small increase over last year yet remains a good deal lower than what it was last June. With rates dropping to a steady 6% and home prices beginning to steady out, the housing market should start to level out in 2023 onward. Although the market could be steadying some, that doesn’t fix the problem of sales inventory. At best, the NAR says it sits around 2.9 months, which remains relatively steady compared to the last few years.
This means that investors across the board are competing with homebuyers trying to find their way into this chaotic housing market. This isn’t necessarily bad news; with potential foreclosure rises and new construction, it’s possible to find a worthy investment. If you’re going to purchase an investment property, take the time to consider every aspect before diving in, as it’s a significant investment. While using market trends and predictions is good, don’t let that be your only strategy. Rather than waiting for lower prices or interest rates, consider your budget and work with it. Of course, the region you choose also plays a role in the process. Let’s talk about Frontenac real estate and what the market looks like today.
Local market trends
The real estate market in Missouri varies depending on the county but sits at a total average well below the national. The current median home price across the state of Missouri is $160,000, which is only a slight decline over the past few months. Homes are selling at close to the asking price, so the market remains in a neutral state. This is excellent for buyers and sellers, especially if you’re looking for investment property.
Not all of Missouri follows this pattern, though. For example, homes for sale in Frontenac have a different market than the rest of the state. The median sold price of a three-bedroom home is $775,000 as of January. The number of homes available and the time on the market has declined, further proving that it’s a seller’s market. Other areas, like Chesterfield and Clayton Township, see lower prices but more time on the market. It’s important to remember that real estate market trends vary from region to region. While the national trends may be slightly higher or lower, the city-by-city trends can differ drastically. Ensure that you do your research before choosing to invest in any property, and work with a quality realtor to understand local and national trends. If you have any questions about a specific region in the St. Louis area, reach out to The Benes Group, whose expertise in this field ensures they’ll have the answers you need.
Key takeaways
When it comes to market trends, the national average is slightly higher than the local across the state of Missouri. Certain regions, like Frontenac, offer a higher median sales price, so if you can purchase an investment property in these regions, you’ll reap the benefits. Whether you’re buying or selling property, there are several things to consider to work with current market conditions.
Those looking to purchase should start with a budget and stick to it. Though your region might see a slight increase in homes for sale, you’ll continue seeing an increase in prices and possibly rising interest rates. There’s also a slight disconnect between buyers and sellers, but buyers want to come in at low prices, and sellers want record-high numbers. The best thing to do is remember that it’s still a seller’s market, and you should plan accordingly.
If you’re a seller, the first step is finding an expert agent who knows the region well. They will work closely with you to ensure your home’s price is competitive and field questions and negotiations. Use reason, and understand that the market is changing, and you can’t expect the same prices we’ve had across the last couple of years. The best thing you can do is put your home in its best possible light. Make the necessary renovations and repairs, deep clean, declutter, and organize everything. This way, buyers see the potential even if the home is outdated.
Buying or selling? Work with The Benes Group
When you’re ready to get started on your journey, contact Mary Beth Benes of The Benes Group. As a trusted real estate professional in the area, she’ll get you started the right way.
