Missouri, commonly called the Show-Me State, was admitted to the U.S. in 1821 and has long served as a key hub for transportation and commerce, thanks to the presence of the Missouri and Mississippi rivers. It features one of the world’s most recognizable monuments, the Gateway Arch in St. Louis, which at 630 feet is the tallest man-made monument in the nation.
Missouri has about 6.1 million residents, making it the 18th most populous state, according to the World Population Review. U.S. Census Bureau figures show that Missouri has lower housing costs than the U.S. as a whole: During the four-year period ending in 2017, the median value an of owner-occupied home in Missouri was $145,400, compared to $193,500 nationwide, and the state’s median monthly rent of $784 was less than the U.S. median of $982.
According to the Missouri Economic Research and Information Center (MERIC), the state was expected to add nearly 205,000 workers from 2016 through 2026, an increase of 7.2 percent. This is slightly below the projected U.S. employment growth rate of 7.4 percent for the same period. Health care and social assistance; construction; and professional and business services are the employment sectors anticipating double-digit growth during those 10 years, MERIC reported.
Manufacturing is a major component of Missouri’s economy as it generated $40.4 billion, or 13.2 percent of the state’s gross domestic product, in 2017. The average manufacturing job in Missouri paid $57,139 that year, compared to the $47,800 annual wage across all private-sector jobs in the state, MERIC reported.
Eleven companies based in the Show-Me State were listed on last year’s Fortune 500 rankings, including health care companies Express Scripts and Centene; chemical manufacturers Monsanto and Olin; and financial-services provider Edward Jones. Combined, those companies employed 27,000 and generated revenues of some $233 billion.
A report this past March from the Brookings Institution, a nonprofit research group, said that Missouri’s largest population centers — Kansas City and St. Louis — ranked among the bottom half of the nation’s 100 largest metro areas in multiple measurements of economic growth, entrepreneurial activity and standard of living from 2016 to 2017.
Personal-finance website WalletHub released a study in July 2018 of the nation’s best places for first-time homebuyers. The Missouri cities of Kansas City, St. Louis and Springfield ranked 138th, 156th and 192nd, respectively, out of 300 markets, based on factors such as housing affordability, cost of living, real estate taxes, home-price appreciation and property-crime rates.
Home sales and prices
According to data from Missouri Realtors, home sales rose dramatically from 2015 to 2018, with nearly 102,000 properties sold last year — a 40 percent increase over those years. The median sales price jumped about 13 percent in the same time frame, reaching $162,500 at the end of 2018.
As of the past first quarter, Missouri Realtors reported, the average home spent 65 days on the market, an increase of nine days compared to fourth-quarter 2018 but down from 116 days in first-quarter 2017. On a year-over-year basis, home sales were down 3.6 percent in first-quarter 2019 but the median sales price rose 9.1 percent to $160,389.
In the St. Louis metro area, the median sales price declined by 1.4 percent year over year this past February to $175,000, St. Louis Realtors reported. Sales prices decreased despite a smaller number of for-sale homes, with single-family inventory down 23.6 percent during the same 12-month period..
Unemployment
Missouri’s unemployment rate this past April was 3.3 percent, below the national rate of 3.6 percent, although Missouri’s figure was up from a post-recession low of 3 percent reached as recently as October 2018, the U.S. Bureau of Labor Statistics (BLS) reported.
As of April 2019, the Show-Me State had slightly more than 2.9 million workers in its nonfarm labor force, up 1 percent year over year. Its fastest-growing job sectors were leisure and hospitality, and manufacturing. Those sectors grew 2.4 percent year over year and employed about 588,000 people combined, BLS reported.
Missouri is one of 19 states that increased its minimum wage at the start of this year. Voters approved a 75-cent increase to $8.60 an hour, which is estimated to impact 4.1 percent of the state’s workforce, according to the Economic Policy Institute.
Delinquencies and foreclosures
According to Attom Data Solutions, auctioned and real estate-owned properties in Missouri peaked in 2010 with 42,538 total filings. That number has steadily dropped to 11,295 filings in 2018, the third straight year of declines. Default filings are not required to be reported, per Missouri state law.
A fourth-quarter 2018 report from CoreLogic showed the average Missouri homeowner gained $8,000 in equity over the prior 12 months, roughly in line with many of its Midwest neighbors. The same report said the Show-Me State had a “moderate” percentage of properties with negative equity, or mortgage balances that exceed the home’s value. Missouri’s share of homes with negative equity was 3.9 percent, below the national average of 4.2 percent in the past fourth quarter.
What the locals say
“Kansas City real estate, like much of the Midwest, had a slow winter and start to 2019 due to the extreme cold and snow. … [Housing] inventory is still an issue, especially in the first-time homebuyer price range, so we are in a market where multiple offers and sellers receiving over asking price is common. Working with a lender that knows the local market and is highly respected by local agents can be the difference between having an offer accepted or not. … Over the past several years, the downtown KC area has come back to life with a $9 billion renovation. The significant renovation to our entire downtown area has really sparked a citywide enthusiasm.”
Scott Fleming
Senior loan originator, PrimeLending
3 Cities to Watch
Columbia
The fourth-largest city in the state with about 121,000 residents, Columbia had a median home value of $181,200 and a median monthly rent of $950 as of this past March, Zillow reported. Columbia is home to the University of Missouri, with nearly 30,000 students and more than 13,000 full-time employees as of fall 2018. Some of the other largest employers in the area include Shelter Insurance Co., Boone Hospital Center and Veterans United Home Loans.
St. Louis
“The Gateway to the West” has shrunk dramatically since its population peak in the 1950s, but St. Louis still has more than 300,000 residents in the city limits and about 2.85 million in the metro area. According to BLS, the 15-county metro area had an average weekly wage of $981 in third-quarter 2018, below the U.S. average of $1,055. The metro area added 12,300 jobs from March 2018 to March 2019, BLS reported, with the manufacturing sector growing by 3.6 percent during that time.
Kansas City
Well-known for its barbecue and jazz, the “City of Fountains” also reportedly has more fountains than Rome. Kansas City’s population is approaching 490,000 and its 14-county metro area has about 2.3 million people. According to the Economic Development Corp. of Kansas City (EDCKC), a strong infrastructure has attracted a number of transportation, logistics and warehousing companies. The city leads the nation with the most freeway-lane miles per capita and Kansas City is the No. 1 rail center in the U.S. by annual tonnage, EDCKC reported.
Sources: Attom Data Solutions, Brookings Institution, Columbia Chamber of Commerce, CoreLogic, Economic Development Corp. of Kansas City, Economic Policy Institute, History.com, Kansas City Parks and Recreation, Missouri Economic Research and Information Center, Missouri Realtors, Nolo.com, St. Louis Realtors, University of Missouri, U.S. Bureau of Labor Statistics, U.S. Census Bureau, WalletHub, World Population Review, Zillow
