Are You Prepared for Missouri’s 2021 Real Estate Market?
While the effects of COVID-19 rippled through most sectors of the economy, the Missouri real estate market has remained seemingly unaffected. In fact, it has grown stronger — a trend that’s expected to continue well into 2021. With demand steadily increasing, low-interest rates motivating buyers, and rapidly rising home sale prices, real estate agents all across Missouri should gear up for a scorching year ahead.
2021 Missouri Real Estate Outlook: Hot
In December 2020, the average home in the state of Missouri was valued at $176,609.That’s a 7.3% increase from the previous year, and Zillow predicts the market will rise by another 10.3% over the next year. Bustling real estate activity, despite 2020’s challenges, is a promising sign that 2021 could be profitable for Missouri-based agents and sellers alike.
Additionally, home sales in the Kansas City area are up 7.0% compared to 2019, and St. Louis presents a myriad of affordable properties for investors. A property spends an average of 104 days on the market, but in hot areas of Kansas City, some are going much more quickly. Thanks to record low-interest rates (the lowest they’ve been in five decades) and continued strong demand, Missouri as a whole will likely be a seller’s market as 2021 unfolds.
Rent prices, on the other hand, have increased by 4.8% year-over-year statewide, and there’s still room for additional increases. Luckily, Missouri rents are 36.8% lower than the rest of the country on average. Meanwhile, a total of ~0.8% of Missouri mortgages were reported as delinquent, reflecting the national average of 0.8%. So, while new transactions continue to boom and affordable real estate draws more and more people to Missouri, current homeowners will thrive as well.
2020 Missouri Real Estate Market Data
|Zillow Home Value Index||$176,609|
|1-Year Change on Home Values||+7.3%|
|1-Year Change on Rent Prices||+4.8%|
|Homes With Negative Equity||0.8%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Missouri
In November of 2020, the Bureau of Labor Statistics reported that the unemployment rate in Missouri was 4.4%, down from 6.9% in July. Currently, Missouri sits well below the national unemployment rate of 6.9%, and that’s likely to continue improving as tourism, events, and hospitality return to normalcy. Economic activity often correlates with growth in the real estate industry, and narrowing unemployment rates along with low-interest rates are a positive sign for agents in the year ahead.
The state of Missouri also sports some other attractive features that could positively impact its market. For one, real estate sales around the Lake of the Ozarks just topped $1B, which was a 64.0% jump from 2019. Meanwhile, others are leaving the high taxes of big cities for the lower taxes, cultural riches, and business-friendly environment that Missouri has to offer. For instance, keep an eye on real estate near the new Amazon sorting center planned in North St. Louis County or the $200M NorthPoint industrial park expansion near Liberty, MO.
As for 2021, inventory will remain low with a noticeable influx of first-time homebuyers and investors making moves in places like Kansas City and St. Louis. It would be wise to prepare clients for bidding wars as home prices could reach new heights. Missouri real estate, while still a great investment that affords homeowners a high quality of life, will play out to be a strong seller’s market in 2021.
Local real estate agents will need to be at the top of their game and encourage their clients to make strong initial offers. However, many out-of-state buyers are looking to make Missouri their permanent residence and are thus likely willing to pay more, which could shatter previous real estate records. So, with a myriad of opportunities on the horizon, there has never been a better time to help your fellow or future Missourians purchase the home of their dreams.
Ready to Seize the Year With the Best Missouri Real Estate Courses From The CE Shop?
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow Missourians with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything Missouri? Join the Midwest Real Estate Facebook Group!