Vacancy and asking rents improve for St. Louis multifamily market

Operating fundamentals in the St. Louis multifamily market improved during the third quarter after posting mixed conditions in the earlier months of the year. The vacancy rate edged lower during the third quarter and has remained in a narrow range of 6.0% to 6.3% since the beginning of 2024. Asking rents continued to tick up, building upon gains recorded during the second quarter. One key influence on property performance has been the wave of new development in St. Louis. Although construction has cooled from the highs of 2022 and 2023, year-to-date deliveries remain elevated relative to the long-term average. Demand has also strengthened, as evidenced by robust absorption this year, which has helped to mitigate the impact new supply and support overall market stability.

The St. Louis multifamily investment market continues to perform well. Total sales to this point in the year are in line with historical norms, while activity in many major markets is still trailing levels recorded prior to 2020. Pricing in 2025 has been elevated, with the median sale price to this point in the year at $159,900 per unit, up 50% from 2024. A key driver of rising pricing has been activity in the Central West End submarket, which generally features the highest-priced properties in St. Louis. After recording no sales in 2022 and limited activity in 2023, the Central West End accounted for 13% of all transactions year-to-date in 2025 with a median sale price of $233,000 per unit. As pricing has increased, cap rates have remained stable, ranging between 5.0% and 6.5% throughout 2025.

Looking ahead

Shifts in St. Louis multifamily operating conditions during the fourth quarter are forecast to be modest but generally favorable. The pace of deliveries in the closing months of the year is on track to roughly match the second and third quarter figures, while absorption levels have been steadily rising throughout the year. Supply and demand are anticipated to remain near equilibrium in the coming months, keeping the vacancy rate around 6.0%. Vacancy conditions are projected to remain stable into early next year, with modest improvements likely as development activity slows. Operators should have room to push rents higher, though growth is likely to be moderate in the near term. As new construction slows, rent gains are projected to return to trend, rising by roughly 3.5% per year.

Multifamily transaction volume in St. Louis is expected to finish 2025 at roughly the same level as it did in 2024. While the Mid County area has led the region in activity to this point in the year, transaction activity is likely to pick up in the Downtown St. Louis and the East Metro submarkets, where the number of listings is elevated. Properties that are currently publicly listed for sale in St. Louis, on average, are approximately 20 years older than those sold so far in 2025. This could put upward pressure on cap rates and impact per-unit pricing, though class-specific metrics may still improve.

Learn more

Contact our St. Louis office for more information.