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Tower Grove South: Rising Home Values Amidst Shifting Ownership Trends
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Tower Grove South, a neighborhood in St. Louis, Missouri, has experienced significant changes in its housing market over the past decade. This area, known for its diverse community and historic architecture, has seen fluctuations in homeownership rates and a consistent increase in housing costs, reflecting broader economic trends and local market dynamics. The homeownership rate in Tower Grove South has shown interesting shifts over the years. In 2013, the neighborhood had a nearly even split between owners and renters, with 49% of units being owner-occupied. This ratio remained relatively stable until 2016 when it began to shift more towards renting. By 2019, the percentage of owner-occupied units had decreased to 46%. However, recent years have seen a reversal of this trend, with the homeownership rate increasing to 51% in 2022, indicating a renewed interest in property ownership in the area.
Average home prices in Tower Grove South have demonstrated a consistent upward trend, particularly in recent years. In 2013, the average home price was $114,065. By 2018, it had risen to $151,797, representing a 33% increase over five years. The most significant growth occurred between 2020 and 2022, with average home prices jumping from $172,595 to $206,678, a 19.7% increase in just two years. This rapid appreciation likely contributed to the recent uptick in homeownership rates.
The relationship between federal interest rates and homeownership rates in Tower Grove South appears to follow expected patterns. From 2013 to 2015, when interest rates were at historic lows (0.11% to 0.13%), homeownership rates remained stable at around 50%. As interest rates began to rise in 2016 (0.4%) and continued upward, there was a corresponding decrease in homeownership rates, dropping to 46% by 2020. However, the ultra-low interest rates in 2021 (0.08%) likely contributed to the subsequent increase in homeownership to 51% by 2022, as more residents took advantage of affordable financing options.
Regarding rental trends, the percentage of renter-occupied units in Tower Grove South increased from 51% in 2013 to a peak of 54% in 2020. This coincided with a steady rise in average rent prices. In 2013, the average rent was $702, which climbed to $905 by 2019, representing a 28.9% increase. The population also grew during this period, from 12,825 in 2013 to a peak of 13,168 in 2017, likely contributing to the increased demand for rental properties.
As of 2024, the average home price in Tower Grove South has reached $226,631, continuing the strong appreciation trend observed in previous years. This represents a 9.7% increase from the 2022 average of $206,678. The current federal interest rate stands at 5.33%, which is significantly higher than the rates seen in the past decade. Despite this increase in borrowing costs, the housing market in Tower Grove South appears to remain robust.
Looking ahead, predictive models suggest that the upward trajectory of both home prices and rent in Tower Grove South is likely to continue over the next five years, albeit potentially at a more moderate pace. Average home prices could potentially reach the $250,000 to $275,000 range by 2029, while average rent prices may approach or exceed $1,200 per month. However, these projections are subject to various economic factors and local market conditions.
In summary, Tower Grove South has demonstrated resilience and growth in its housing market. The neighborhood has seen a recent shift back towards homeownership, despite rising home prices. The rental market has also remained strong, with increasing rent prices reflecting the area's desirability. The interplay between interest rates, housing costs, and occupancy trends underscores the dynamic nature of this St. Louis neighborhood's real estate landscape.
