Reliving Its 1900 Heyday, St. Louis Ranks No. 1 on the WSJ/Realtor.com Luxury Index
Meet me in St. Louis?
Maybe, if buyers are looking for an easygoing lifestyle where they can afford a mansion for less than they’d pay for a two-bedroom apartment in some other major U.S. cities, according to Janet Horlacher, a St. Louis native and owner and principal broker of Janet McAfee Real Estate/Luxury Portfolio International in the city.
“Affordability is not the sexiest thing to talk about, but you know, the average sale price of a home in St. Louis is about 30% lower than the national average,” she said. “Our luxury buyers can have so much more buying power and the quality that they can afford is just so enticing.”
That’s a major reason why St. Louis is the No. 1 metro area on The Wall Street Journal/Realtor.com Emerging Housing Markets Index first quarter of 2023, released Wednesday, shooting up from 16th place the previous quarter.
Then there’s sports and entertainment—including the St. Louis Cardinals baseball team and the Missouri Botanical Garden—and the accessibility of the city, which is located near the confluence of the Missouri and Mississippi rivers.
“Our cultural institutions in St. Louis are world class and they’re free,” Ms. Horlacher said. “Another thing people here get hooked on is accessibility. You can get just about anywhere in St. Louis in 20 to 30 minutes. We wig out if we’re going like five or 10 miles under the speed limit on the highway; we are so spoiled.”
And the regional stereotype is as true in St. Louis as anywhere in the Midwest: People are friendlier.
“When I moved back home from the East Coast, I had to relearn how to walk slower and look people in the eye,” she said.
Although cities in the Sun Belt—which includes the southern swath of the U.S. from Florida to California—have been dominating the Emerging Housing Index for the last several quarters, it’s not a surprise that a Midwest locale topped the ranking this quarter, according to Danielle Hale, Realtor.com’s chief economist.
“The Midwest has been a standout region lately when it comes to job growth, unemployment and all those factors that underlie a solid economy,” she said. “What is interesting is that the luxury market in St. Louis is very different than other markets in the sense that the luxury entry price is much, much lower than it is in any other market. This could reflect the fact that affordability is important across the board, even in the luxury sector.”
St. Louis’s relatively small size could also be attracting buyers, Ms. Hale noted.
“We’re seeing buyers move from bigger cities to smaller cities in search of affordability, and so that could also be a factor at play here,” she said.
Other metro areas that ranked in the top 10 of the Index include Hilton Head Island, South Carolina; Boulder, Colorado; San Jose, California; Dallas; Nashville; Salt Lake City; Tampa, Florida; Asheville, North Carolina; and Portland, Maine.
Of that list, Portland has moved up nine places in the ranking, the biggest mover other than St. Louis. Many people who live around Boston choose Portland as a smaller option for their homebase, Ms. Hale said.
The Emerging Housing Markets Index identifies regions of the country that offer strong future upside potential and a nice lifestyle for homeowners each quarter. The luxury segment of the index used housing data for the top 10% of 60 metropolitan areas for the ranking. The rankings factored in information on the real estate market and other economic measures from the first quarter of 2023, analyzing a number of indicators to rank the most active luxury housing markets. Indicators include growth in housing supply and demand; median listing prices; a cost-of-living measure; small businesses; local property taxes; amenities; unemployment; wages; and the share of foreign-born residents—who contribute to the economic vitality and diversity of the area.
St. Louis is a Midwest hub for commerce, medicine and science.
“People are coming here for work,” she explained. “Oftentimes, at the office, we’re like, ‘well, who bought this beautiful luxury home?’ Doctors.”
Indeed, Barnes-Jewish Hospital is the biggest employer in the city, according to the St. Louis Business Journal. The hospital is partnered with Washington University, which also attracts people to St. Louis, and there are several other colleges, universities and hospitals.
St. Louis also attracts entrepreneurs, boasting a 200-acre innovation district that provides 45,000 jobs, and the renowned Donald Danforth Plant Science Center also brings scientists to town. There are several regional corporate headquarters in St. Louis, including Enterprise, Boeing and Express Scripts, owned by Cigna Healthcare.
“We service a lot of corporate clients coming in who are home buyers,” Ms. Horlacher said. A large cohort of wealthy St. Louis residents with part-time homes in Florida have hunkered down in the city while homes destroyed by recent hurricanes are rebuilt, she added.
Like much of the country, the metro is suffering from too few homes for sale. Locals set on downsizing are finding there just isn’t enough supply.
“With inventory being so low, it’s clogging up the natural progression,” Ms. Horlacher said, referring to the tendency of empty-nesters to actually leave said nest for a smaller one, thus creating an opportunity for a young family to step up and move to a bigger home—with their brood in tow.
Lifestyle is also key to St. Louis’s appeal.
The city is very green and hilly unlike many people’s preconceived notions about the Midwest, the agent said.
“St. Louis is a tree city,” according to Ms. Horlacher. “We have boulevards and neighborhoods that have these 100-year-old oaks. The streets are tree lined, especially in the older areas of the city. We’re between the two rivers, the Mississippi and the Missouri, and it just makes for a lush geography.”
The city—which, around the turn of the 20th century, was once the fourth largest in the U.S.—also has Forest Park, a more than 1,300-acre public green space. Many of the cultural institutions of St. Louis are located in and around the park, and some of the attractions were created for the 1904 World’s Fair. (Hence the lyrics to the popular 1944 song sung by Judy Garland in the movie of the same name: “Meet me in St. Louis, Louis/Meet me at the fair…”)
A special tax district was also created in the city in the early part of the 20th century, allowing arts and cultural institutions to thrive. That includes the St. Louis Art Museum, part of which was designed by the renowned architect of the time, Cass Gilbert; three zoos; and several other museums. The botanical gardens are located at nearby Tower Grove Park.
Sports are also a draw, from the Cardinals to the XFL’s St. Louis Battlehawks.
“We lost our NFL team, the Rams, to L.A. But now we have this XFL team. This is a craze among millennials and younger generations. These XFL teams are just on fire,” according to Ms. Horlacher.
For families, schools are also top of mind.
“We have great public schools. But we also have the largest number of private independent and religious-based schools,” Ms. Horlacher said. “For a newcomer to St. Louis, it’s a little bit overwhelming because we have to go through all the schools.”