Multifamily Per-Unit Sale Prices Push Higher in St. Louis as Rents Rise

Operating conditions in the St. Louis multifamily market were mixed during the second quarter. After a slight decline at the start of the year, the vacancy rate began to inch higher, reaching the mid-6% range after spending much of the past year closer to 6%. Despite this uptick, rents showed positive momentum, recording their strongest quarterly increase in nearly a year and maintaining a healthy annual pace of growth. A major driver of property performance has been the pace of new construction in the region. Although deliveries have slowed since peaking in 2022, annual totals remain about 60% above the market’s long-term trend. Correspondingly, area vacancies have risen above their 10-year average, currently sitting about 100 to 150 basis points higher than historical norms.

St. Louis has been one of the more consistent major markets for investment sales activity in recent years. The market has not recorded sharp upward spikes or steep declines in transaction volumes since 2020, a trend that remained in place through the first half of this year. The number of sales recorded during the first half of 2025 was nearly identical to levels from the same period in 2024 and closely tracked the market’s trailing five-year average for first half sales. While transaction activity has remained consistent, pricing has shifted significantly. The median price per unit is up 50% from last year at $159,100. Year to date, only three transactions have closed below the 2024 median price. Cap rates in St. Louis range between 5.0% and 6.5%.

Looking ahead

The trends that were observed in the St. Louis multifamily market during the second quarter are expected to continue through the remainder of the year. Developers will maintain a steady pace of activity, with deliveries in 2025 projected to decline by about 10% compared to 2024. Still, inventory growth will exceed the region’s long-term average, and the cumulative impact of several years of heightened delivery totals is expected to result in slightly higher vacancy rates. The influx of new, high-quality inventory is contributing to rent growth. Deliveries peaked in 2022 and rents have increased by approximately $100 per month in properties delivered since that year. As these newer units are steadily absorbed, there may be room for additional rent growth. A slowdown in permitting activity should ultimately thin the development pipeline, positioning the market for vacancy improvement and continued rent growth in 2026.

Multifamily investment sales activity in St. Louis is projected to maintain its current course through the rest of 2025, with a transaction count likely ending the year in line with the market’s trailing five-year average. While the properties that sold in the first half were spread out across the region, the Mid-County area, typically the region’s most active submarket, may be poised for increased activity levels in the second half. Additionally, several properties were listed for sale in Downtown St. Louis as the second quarter came to a close. The majority of properties that are publicly listed for sale are Class B assets, which have already been trading at elevated pricing and in higher volumes than in recent years. There is little indication that cap rates are expected to move outside of current ranges, and cap rates for the remainder of the year will likely be determined by the quality and performance of the properties that change hands.

Learn more

Contact our St. Louis office for more information.