St. Louis Makes Modest Gains
The metro’s multifamily market continues to improve at a middling rate, as its population and job market grow at a pace below the national average.
St. Louis rent evolution, click to enlarge
St. Louis’ multifamily market continues to improve at a middling rate, as the metro’s population and job market grow at below-average rates. Rents have increased moderately over the past year, reaching $928, up 1.3 percent year-over-year through October, well below the 3.3 percent national average. The area’s relatively low cost of living means that affordability levels are moderate. Meanwhile, an influx of financial services jobs has created additional demand for Lifestyle assets, keeping the segment’s rent growth close to the metro’s average rate over the past 12 months.
St. Louis gained 11,000 jobs in the year ending in September. With 8,100 jobs added, the education and health services sector led growth. Continued investment in new space at the Cortex innovation district aims to attract tech talent to the city, which would have a beneficial effect on the metro’s economy, although impacts there will be slow to materialize.
Multifamily investment is likely to have a strong year, as 2018’s total annual sales are likely to come in just below 2016’s cycle peak of $707 million. The overall performance of the apartment sector was solid. As of October, roughly 14,500 units were in different stages of development, of which more than 4,800 units were underway. Although below average, employment and rental gains are still positive, pointing to steady performance ahead.
