The St. Louis multifamily market is experiencing a slight increase in vacancies due to the new deliveries, but with strong fundamentals, the market remains strong and stable with rent growth at 1.6% for Q3 2024.
From a broader economic standpoint, the St. Louis unemployment rate has remained below the national average of 4.1%, but it rose 30 basis-points (bps) from last quarter to 3.9% in Q3 2024. Despite this, the St. Louis labor market improved overall, with non-farm employment recording a 210-bps increase year-over-year.
Delving into the multifamily supply trend, vacancy in the St. Louis sector rose 20-bps quarter-over-quarter, ending Q3 at 9.7%. This increase was primarily driven by the delivery of 1,038 new units in Q3 (and no deliveries in Q2), in addition to just 689 units of absorption recorded this quarter. Despite the absorption trend in Q3, St. Louis saw over 2,500 units of positive absorption year-to-date (YTD), bringing overall vacancy down 70-bps from Q1 2024. From a rent growth perspective, effective rents have remained above $1.40 per square foot (psf) throughout 2024, ending Q3 at $1.42 psf, with annual rent growth stabilizing, closing the quarter at a growth rate of 1.6%.
After a record-setting delivery of over 8,000 units throughout 2022 and 2023, St. Louis’ multifamily development pipeline stabilized. The market saw a 1.4% increase in inventory YTD, with the largest amount of development is concentrated in the St. Charles County submarket.
Read more about the St. Louis multifamily market in Cushman & Wakefield’s latest Marketbeat.
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