St. Louis Left Untouched
By the Housing Boom

The housing boom that has lifted median home prices in the U.S. by about 25% since 2003 seems to have left the St. Louis region behind. Housing prices in the heartland region that straddles both the Missouri and Illinois banks of the Mississippi River rose by about 13% through the fourth quarter of 2005 from 2003 levels, according to the National Association of Realtors.

This two-bedroom, one-and-a-half-bath Victorian-style home in the St. Louis suburb of Crystal City is on the market for $144,900.

Lower home prices in the region, a largely suburban area of about 2.8 million people anchored by the city of St. Louis, can be traced in part to the area's slow-growing economy and below-average population growth. Median home prices reached $138,800 in the fourth quarter, well below the $213,000 national level. The slower-paced housing market offers a silver lining of affordability and stability to local and would-be residents and investors. Relatively low-priced homes in St. Louis have allowed more residents a crack at the American dream. The homeownership rate for the region was about 74% in 2004 compared with the national average of 69%, according to Property & Portfolio Research Inc.

Additionally, as some areas of the country brace for a potential decline in housing prices that have skyrocketed in recent years, home prices in places like St. Louis that aren't overvalued are less likely to fall, said Jack Strauss, an economist at St. Louis University. "The Midwest and St. Louis are relatively safe," said Mr. Strauss. "What goes up comes down."

Sources: National Association of Realtors, St. Louis Association of Realtors, Property & Portfolio Research

Coming up tomorrow, a look at the commercial real-estate market in St. Louis.

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