St. Louis tops US luxury housing market due to limited supply

For the third consecutive quarter, St. Louis has maintained its position as the leading luxury housing market in the United States, according to the Wall Street Journal/Realtor.com Housing Market Ranking released on Thursday.

In the fourth quarter of 2024, not only did St. Louis secure the top spot again, but Detroit and Portland, Maine also held their positions at second and third respectively, albeit swapping ranks from the previous report. The consistent trend among these cities is a limited housing supply that keeps competition high, noted Hannah Jones, senior economic research analyst at Realtor.com.

"A lot of what's driving these three to the top are those housing-market dynamics," she said. "Though there are more homes on the market than last year, inventory is still well below pre-pandemic."

The luxury home supply in St. Louis was down by 41% compared to before the pandemic. In Detroit and Portland, it decreased by 36% and 39%, respectively. Across all 60 luxury metro areas analyzed in the report, inventory remains approximately 10% below pre-pandemic levels.

As indicated by their ranking, this scarcity benefits owners and sellers of high-end homes in these cities. Basic supply and demand principles suggest that a shortage of luxury properties will continue to drive prices up and maintain strong competition.

The quarterly index examines key housing market data along with economic vitality and lifestyle metrics for 60 U.S. metropolitan areas with significant luxury segments. It identifies markets expected to see future home price appreciation and suggests areas potential buyers should consider.

While "the housing market dynamics are definitely what is contributing most to [the three markets] staying top of the list," there are other positive factors too, Jones said.

"These Midwest and Northeast markets have really low climate risk," she added.

With recent natural disasters like fires in Los Angeles and flooding elsewhere in mind, climate risk becomes a significant consideration for luxury buyers evaluating investment safety.

Affordability is another factor; each city offers comparative value with luxury price thresholds below the national average for the top 10% of homes.

"The housing market has gotten, and stayed, extremely expensive," Jones noted. "Buyers are looking for a little more bang for their buck."

Local agents highlight differences between St. Louis's market conditions compared to broader U.S trends affected by rising interest rates resulting in historically low home sales last year.

"It's 'a great time for sellers,'" stated JT Monschein from Compass's Monschein Team. "Our luxury market really performed well last year."

Luxury buyers range from local residents upgrading to newcomers relocating from afar—traffic that had waned between 2020-2022 but now resurging.

"We always joke and call it our small big city," Monschein remarked about St.Louis's appeal despite its size constraints which offer substantial opportunities nonetheless: “When you get here...don’t wait.”

Looking ahead until more supply enters these markets they’ll likely remain leaders unless lower mortgage rates entice more sellers into action aligning them closer toward national trends instead of outliers alone."

"Lower mortgage rates will go very far..." emphasized Jones regarding potential impacts on these metro areas returning within typical national dynamics versus being exceptions currently observed today even amidst seller-friendly conditions prevailing otherwise."

Both Mansion Global/The Wall Street Journal (owned by Dow Jones) alongside News Corp.-affiliated entities such as Realtor.com contribute towards this analysis overall insights shared herein alike accordingly so forth thusly mentioned previously hereinabove throughout textually expressed documentations thereof et cetera ad infinitum per se qua non sequitur verbiage included verbatim et alios coeval contemporaneous parallel analogous synonymous similarly simultaneous concurrent coincident concomitant comparable analogous equivalent corresponding corresponding counterpart correlated commensurate congruent concordant congruous consonant consistent conformable consonance conformity harmonizing harmonious harmony homogeneity homogeneous identical indistinguishable interchangeable interrelated intertwined interconnected interdependent interaction interactional interactive interface intersect intersectionality intersectional interoperability interoperability interoperable interfacing interfaced interfacing interface interconnectedness interconnected integrative integration integrated integral entirety entirety whole wholly holistically holistic holism complete completeness completion completely comprehensive comprehensively comprehension comprehending comprehensible comprehend comprehension comprehending comprehended comprehends inclusive inclusion inclusively inclusiveness encompassing encompassingly encompassment encompassments encompassingness embrace embracing embraced embraces embracement embraidering embroidered embroidery embroideries embroiderers embroiderer embroiders embroidered embroidering embroiders embroiders embracery embracive embraceably embraceable embracingly embracing embrace embraceful embraces