For the third straight quarter, St. Louis, led as the top luxury housing market in the U.S., according to the latest Wall Street Journal/Realtor.com Housing Market Ranking, released Thursday.
Not only did St. Louis return to the top spot during the fourth quarter of 2024, but the second- and third-ranked metro areas also remained, though they swapped positions from the last report, with Detroit at No. 2 now outranking Portland, Maine, ranked at No. 3.
The common trend among all three of these cities, and the thing that’s keeping them at the top of the ranking, is a lack of housing supply that’s keeping competition elevated, according to Hannah Jones, senior economic research analyst at Realtor.com.
While “the housing market dynamics are definitely what is contributing most to [the three markets] staying top of the list,” there are other positive attributes, too, Jones said.
“These Midwest and Northeast markets have really low climate risk,” she said.
Given the recent devastating fires across Los Angeles and last year’s extreme flooding across other parts of the country, “that climate risk feels more front of mind, a little bit heavier. For luxury buyers thinking about buying a high-price property, of course they’re going to be considering ‘how safe is this investment?’”
And in terms of affordability, all three of the cities offer comparative value, with each metro area’s luxury price threshold standing below the average for the overall U.S. luxury market—which is defined as the top 10%.
“The housing market has gotten, and stayed, extremely expensive. Buyers are looking for a little more bang for their buck, without having to pay $2 million for it,” Jones said.
Local agents representing luxury homes in St. Louis, for example, describe a market that’s markedly different from much of the U.S., where interest rates have stifled activity and led to the lowest annual home sales in 30 years in 2024.
It’s “a great time for sellers,” said local agent JT Monschein, a partner and listing specialist at the Monschein Team at Compass.
“Our luxury market really performed well last year,” he said. “We’re still seeing multiple offers, not 10 or 15 anymore, but we’re still seeing multiples and [homes selling for] over asking.”
Luxury buyers in the city, Monschein explained, span the gamut from local residents upgrading to relocators hailing from further afield. “Relocation traffic had kind of died in the 2020 to 2022 time period, but now we’re seeing that again,” he said.
In the third quarter of 2024—the most recent data available—more than 50% of listing views to homes for sale in St. Louis came from within the metro area and a little over 36% came from out of state, according to data from Realtor.com.
“We always joke and call it our small big city. We’re not a huge market but we’ve got a lot to offer,” Monschein said. “When you get here and you like a house, don’t wait. We don’t suspect the demand is going to dry up.”
Indeed, looking ahead, these markets will likely stay top of the crop until more supply comes to the market. If there’s a drop in mortgage rates, that will have a particularly powerful effect by prompting more sellers to get off the sidelines and into the market.
“Lower mortgage rates will go very far to bring these [metro areas] back into the pack, closer toward national housing dynamics, rather than outliers,” Jones said. “Even if they continue to be a seller’s market, more homes for sale will go further.”
Article by Liz Lucking - Global Mansion
