Missouri Real Estate Market: What to Expect in 2024 and 2025?

✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.

The current median home sale price of $273,400 is stable and rising steadily at 4.1% YoY. Moreover, homes spend only 24 days on the market. This indicates that the Missouri real estate market is pretty much competitive.

The average months of home supply are 2 months YoY. A market with fewer months of supply indicates a seller’s market. However, in July, the number of homes sold increased by 4.8% year-over-year. In July 2024, 7,545 homes were sold up from 7,203 homes in July 2023.

Such inactivity in the market is mainly due to the recent NAR settlement. People are anxious about the selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed suit. It will probably reduce the home selling prices. As a result, buyers will enjoy better affordability and low mortgage rates. Here are some tips to help you stay competitive in the market:

• If You Are a Home Buyer: The number of homes for sale (25,207) is up by 18.8%. Combined with the expected drop in home prices, this could benefit you. The low mortgage interest rates at 5.98% are now in buyers’ favor. If housing demand and prices drop, you can also request seller concessions.
• If You Are a Home Seller: The correction in the home prices is long overdue. Following the NAR settlement, home prices may dip further. As a seller, you can still profit from your home sale before prices decline.

So, How Is the Real Estate Market in Missouri?

Balanced!

The number of homes for sale increased by 18.8% in July 2024 compared to the previous year. This is the 9th consecutive month the housing market has witnessed such growth. Other important facts are:

• Median Days on Market: The median days on the market for homes for sale are 24 days, up by 6 days YoY. This trend suggests a high demand in the Missouri real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 18.8%. There are 25,207 homes for sale in Missouri, with an average supply of 2 months.
• Average Home Prices: The median home price in Missouri is $273,400. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 100%, up by 1.1 pt YoY.
• Home Sales: As per July 2024 data, home sales increased by 4.8% YoY! 7,545 homes were sold, compared to 7,203 last year.
• Average Rent Prices: Rental costs vary statewide. The median rent is $1,325 with a month-over-month change is +$5.

Why Is Missouri a Seller’s Market Now?

Missouri’s real estate market has a balanced inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 24 days on the market which depicts the competitive market.

Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending only 24 days on the market before going under contract. This is visible in metro cities like Gladstone and Creve Coeur where the average days on the market is between 8 to 9 days.
• Multiple Offers on Homes: Gladstone got 85 in Redfin’s Compete Score. It means the housing market in Alaska is very competitive. Many homes get multiple offers, some are even sold without contingencies.
• High Sale-To-List Price: Homes often sell for 1% below the list price and go pending in 14 days. Hot homes sell for 4% above the list price and go pending in 6 days.

• Homes Sell Above List Price: On average, 27.3% of homes sell above list prices. This trend indicates a gradual shift toward a buyer’s market.

Missouri Housing Market Predictions 2024

Here are the predictions for Missouri’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
2. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across MO YoY, reaching $273K in July 2024. Cities like Gladstone and Creve Coeur expect home prices to increase by 3.6% and 3.1% by July 31, 2024.
3. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.
4. New Home Construction Sales Will Increase:  As per the Building Permits Survey, 9,863 new private housing units were authorized, in July 2024. Missouri’s housing market’s high demand will be served with the new constructions.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

When Will the Housing Market Crash in Missouri?

A housing market crash in the Bullion State is unlikely.

Missouri’s robust economy, diverse job market, and affordable cost of living will continue to attract businesses and individuals seeking new opportunities.

Springfield is the fastest-growing city in Missouri, with a 1.37% increase in its population by 2023. Columbia is the second fastest-growing city in Missouri, with its population surging 2.68% to nearly 1.29 million.

Missouri is a haven for several businesses and industries. Several cities offer a variety of fun activities, such as visiting parks, savoring local cuisine, and exploring arts and entertainment.

Missouri’s job market is also strong. The unemployment rate is at 3.3% and it’s friendly tax policies are a cherry on the top. Missouri’s affordability, natural beauty, and recreational opportunities will draw in homebuyers in 2024.

2024: Is It a Buyer’s or Seller’s Market Now?

Missouri real estate market favors sellers in 2024. (And buyers, too!). The Missouri real estate market is expected to lean more in favor of the buyers in the latter half of 2024.

Home prices are rising slowly, and the number of homes for sale has increased by 18.8% YoY. Buyers now have more choices. With mortgage rates around 5.98%, buyers also have more purchasing power.

Consequently, more homeowners are likely to list their homes on Missouri MLS. The 2.5% increase in new active home listings in Missouri has brought back home shoppers. So, whether you are looking for a condo in Gladstone or a single-family primary home in Creve Coeur, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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