Buyers and sellers are facing a whirlwind of changes in the St. Louis real estate market these days. The market is different now than it was even two short years ago when houses flew off the market within days of listing.
With the shifting market, it’s more important now than ever for sellers to choose the right listing strategy and maximize profits. For buyers, navigating the market can still be tough, but not impossible.
Existing home sales in the U.S. recently dropped to their lowest level in 13 years, according to data from the National Association of Realtors.
High mortgage rates combined with limited options on the market have increased prices.
As a result, many buyers have left the market.
Rising Mortgage Rates and Inventory
One of the biggest factors influencing the market is interest rates. The St. Louis housing market is experiencing a slowdown compared to the post-COVID years, and changing interest rates play a crucial role. Home buying activity has fallen considerably compared to 2021, but the market is still moving nonetheless.
Though home sales in St. Louis were down 4.8% in October 2023 compared to October 2022, the average time on-market was also down. The average home in St. Louis is on the market for 25 days before selling.
This means that even though fewer homes are selling overall, the ones that do tend to sell faster than in previous years.
It’s still a strong seller’s market
Inventory levels remain tight across most markets, but housing inventory is up 23.5% compared to 2022.
Even with inventory up to about 2 months in Q4 of 2023, we are still in a seller’s market.
Typically, less than 6 months of inventory is considered a seller’s market, and anything more than 6 or 7 months of inventory is a buyer’s market.
Two months of inventory means that if no more houses came on the market, it would take approximately 2 months for everything currently listed to sell.
How Some Homes in St. Louis Still Sell Over List
These days, sellers find themselves in a somewhat advantageous position. They are still receiving great offers on their homes, so long as the price is carefully set. High mortgage rates have created very price-sensitive buyers.
Creating the right listing conditions for a multiple-offer situation has become more nuanced.
Create the right situation
Being strategic in preparing your home for the market is critical these days.
Two years ago it was not uncommon for homes to receive 5-10 offers in the first week.
Now, multiple offer situations are less common. And when they happen, it’s more like 2-4 offers instead of 10.
Make your house the best-looking for the price
If you’re considering selling, go on Zillow and look at your competition. Competition is all the homes within 1 mile of you that have similar:
- Square footage
- Bedrooms & bathrooms
- Floor plan
- Upgrades & finishes
- School district
- Lot size
Check what price they’re listed for, how long they’ve been on the market, and if there have been any price drops.
For example: if your neighbor’s home is very similar to yours, the same size, and has the same updates, you’ll probably want to list your home at or below their price.
Let’s say your neighbor’s listed for $400k and it’s been on the market for 3 weeks. If you’d like a better chance of selling faster than 3 weeks, consider pricing below $400k. If you’re fine with being on the market for 3 weeks to get an offer, you should be good to list at $400k.
What if your home is more/less updated than your neighbors??
If a neighboring home is listed for sale, look at the interior photos very carefully.
What if that house has a brand new kitchen & primary bathroom and yours doesn’t? You might be better off pricing your home 5-10% below theirs. If you want to price your home equally, you certainly can… But understand your neighbors will be a better-looking and more updated home at the same price as you. Given how price-sensitive buyers have become, this is not ideal for you as the seller.
Let’s say it’s the reverse, and your home is the one with all the newest finishes and modern upgrades in the neighborhood. There are 2 strategies you can use:
- Price your home below the competition and generate much more interest
- Price your home 5-10% above the competition and generate the same level of interest
This is where you’ll want to pay attention to days on the market, and any price drops your competition has had.
If you get the same level of interest as your neighbors, you’ll likely be sitting on the market for the same amount of time, whether it’s 2 days or 2 months.
Information Is Your Competitive Advantage
The more information you have when selling your St. Louis home, the better. If there are other homes in your neighborhood for sale, you get to closely watch:
- How quickly they sell
- When they have price drops
- How much interest they generate
When deciding your price to list, you’ll want to compare the interiors of those homes to your own. Using sites like Zillow and Redfin and looking at public tax records of sales history can give you a huge advantage over your neighbors, who may be less calculated in their listing approach.
A great listing agent who can advise on different listing strategies is extremely helpful.
If you’re trying to narrow in on your home’s value, let us know.
We are here to help. We will share our listing advice, but the decision is always yours to make when it comes to price.
Understand What Buyers Are Looking For
Buyers in 2024 will be pickier and more price-sensitive compared to previous years. Rising interest rates and the high cost of materials have made it more expensive to take out a HELOC and renovate a home that needs work.
Most buyers are looking for a move-in-ready home that needs minimal renovation because their mortgage payment is about to be more expensive than it was two years ago.
This makes it even more important to pay attention to how updated your home is compared to other listings near you and price your home with competing homes’ prices in mind. Since inventory is higher than in 2022 and demand is lower, it’s good to be aggressive with price.
On the flip side, being a bit ambitious with price will often lead to your home sitting on the market longer than it would have in 2021. Buyers will be more likely to lowball you with their first offer.
Prepare Your Home for the Market
Preparing your home for the market is extremely important. A neutralized home combined with professional photography makes all the difference. Here are some things you’ll want to do:
1. Great Curb Appeal: Make sure your landscaping is fresh and well-maintained. If any lights are missing, shutters or windows are broken, replace them. Also make sure exterior paint, doors, and screens look new and clean. Power-wash any pavement, patios and driveways that might be dirty.
2. Neutralize Design and Colors: If you have unique wall colors, dated carpets, or eccentric cabinet colors, you’ll want to swap the colors to something more neutral. White, beige, gray, or tan can be a good color. Avoid overly colorful walls and carpets like red, green, and yellow.
If a room’s paint starts to look old, give it a fresh coat of paint. It’s one of the cheapest ways to make a BIG impact on how your home appeals to buyers.
3. Simple and Modern Touch: If there are outdated chandeliers, wall-mounts, and lamps, it may be worth your while to switch to something simple, bright, and a bit more modern. Make sure your rooms feel open and airy. Remove furniture that makes your home feel cramped or closed-off in any way. If your furniture doesn’t match the style of your home, consider staging.
We sometimes recommend staging to our clients with unique furniture taste that might be off-putting to buyers.
If your appliances are dated, it may be worth your while to invest in newer stainless steel appliances.
4. Declutter and Depersonalize: Remove as many personal items from counters and tables as possible. Hide appliances in cabinets, and clear off any vanities, nightstands, and coffee tables. If you have lots of family pictures, you’ll want to remove them from the walls so buyers can have an easier time visualizing their family in the home instead of yours.
Use closets to your advantage, but keep them organized. Many buyers open doors to see how much closet space a home has. Consider renting a storage unit temporarily if you run out of space to put things in the basement or closets.
5. Clean, Clean, CLEAN! Further prepare your home for pictures and showings by deep cleaning the kitchen and bathrooms. Scrub every surface, including floors, counters and baseboards, to remove grime and freshen the whole home. Use air neutralizers such as charcoal briquettes or baking soda routinely so the indoor air smells fresh and clean. If needed, purchase simple neutral bedding and linens to freshen dated bedrooms.
Whether you’re switching out a light fixture, re-painting a room, or doing a renovation that will increase value, it’s important to prepare your home for the market to the best of your ability if you want to earn top dollar.
If your home is starting to feel bland inside, you’re on the right track.
Start viewing your home as someone else’s rather than your own. As difficult as it may be, you’ll want to emotionally detach from it.
Be ready to accept an offer and leave the place you’ve loved behind. Every penny you spend on updating and cleaning your home is an investment that should earn you a return when the home sells.
By prepping your home thoroughly, you’ll be in a great position to receive multiple offers and sell quickly.
While inventory remains low, selling conditions are more complex than in previous years’ hot seller’s market. Though still a seller’s market, homes may not attract multiple offers without proper preparation.
Selling Your St. Louis Home in 2024
The St. Louis real estate market is undergoing massive changes compared to recent years. Home sales have declined nationally and locally due to rising mortgage rates and lower demand. While inventory remains relatively low, selling conditions are more complex than in previous years’ hot markets.
Though 2024 will still be a seller’s market, it takes more strategy and an experienced agent to sell your home over list price.
If you’re in the market to sell your St. Louis home sometime soon, don’t hesitate to reach out to us for guidance.
We have tried and tested listing strategies for every step of life you may be in during your next move. We’re here to help.
Buyers today have less budget for renovations, so many are looking for turnkey homes. Adapting to this shift by making your house desirable and competitively priced can still result in bidding wars. Carefully navigating these dynamics is critical for those buying or selling.
