St. Louis Market News

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@Rei Reid St. Louis is a very diverse city in terms of demographics, types of investment property, and return on investments. In some neighborhoods a 4% ROI is considered lucky due to low inventory. Other neighborhoods that were producing 15-20% ROI are now producing 8-10%, yet most of these types of properties (D-C) still involve the same amount of risk. Again, the reduction in ROI is due to low inventory and the continuing upticks in buyer demand. In fact, last month (May) we saw an increase in median sales price of 20% compared to May 2020. The month's supply of inventory decreased by nearly 50%. However, closed sales are up 12% compared to May 2020, even though there were nearly half the properties listed for sale than last year. What does this mean? Buyer demand is increasing quicker than inventory decreases. With all of this in mind it is not too far out of the question whether or not properties will continue to appreciate at a 10-20% rate year over year on average for the next 1-2 years. This is on the assumption that the Fed will keep rates low. But, due to recent inflation reports the Fed could introduce 1-2 rate hikes in the next 1-2 years by 2023.