Exploring St. Louis' Real Estate Trends: Top and Worst Appreciating Areas

Introduction:

The real estate market is always evolving, and knowing which areas are on the rise and which are struggling can be key for investors, property managers, and even homeowners. In our latest episode of the Saint Louis Property Manager Podcast, we dive deep into Zillow’s data on the most and least appreciating areas in St. Louis. By analyzing the numbers, discussing the neighborhoods, and sharing our on-the-ground insights, we help investors understand where their money could best work for them in this ever-changing market.

With our guest, Brandon—our resident expert on Section 8 housing and property management—we break down some surprising findings about appreciation trends in neighborhoods you wouldn’t typically expect to see on top, and we discuss areas that are still struggling to recover. Whether you're looking to invest, manage, or simply understand the local real estate dynamics, this podcast episode is packed with insights!

The Data Dive: What Zillow Tells Us About St. Louis

To kick off the discussion, we pulled data from Zillow’s Zestimate, which gives us an idea of which neighborhoods are appreciating the most and which ones are seeing declines. It’s important to note that Zestimate data isn’t perfect—far from it—but it does offer an interesting snapshot of trends in the area. Brandon and I both agree that you should always take this information with a grain of salt, as Zillow’s algorithms sometimes miss the nuances that come with local market dynamics. However, it’s still a fun and informative exercise to see what the numbers tell us.

The Best Appreciating Neighborhoods

1. Hillsdale (13.2% Appreciation)

Surprisingly, the neighborhood at the top of Zillow’s list was Hillsdale, with an impressive 13.2% year-over-year appreciation. For many listeners, Hillsdale might not have been the first place they’d think of for top appreciation, but it’s a great example of how out-of-town investors are reshaping the local market.

Brandon's take on Hillsdale:

“This doesn’t surprise me at all. Hillsdale has a lot of homes that haven’t been renovated in decades. Out-of-town investors come in, throw money into these properties, and the values rise quickly. The population density is also pretty high for such a small area, which is pushing up demand.”

Hillsdale's population sits at 1,477, packed into just 0.3 square miles. The high density means there’s potential for even more growth as investors continue to renovate homes. However, crime remains a concern in the area, with a D+ crime rating, which is something to keep in mind for investors considering this neighborhood.

Is it a good investment?
Yes, but it depends on the street. Some streets are in much better condition than others, so you’ll want to do thorough research before jumping in. As with any high-crime area, tenant screening is crucial to ensure you get reliable, long-term renters.

2. Pagedale (11.3% Appreciation)

Next up on Zillow’s list was Pagedale, which has seen an 11.3% appreciation over the past year. Pagedale, like Hillsdale, has become a magnet for out-of-town investors, particularly those looking for affordable homes to flip.

Brandon's insights on Pagedale:

“Pagedale is just west of University City. The homes are smaller, but you can pick them up for about $50,000, put $10,000 to $20,000 into them, and they’ll appraise for about $100,000. The local community might overlook these areas, but out-of-town investors are seeing the potential.”

Pagedale’s population is around 3,600, with a D crime rating. While crime is still a challenge, the appreciation rates show that investors are taking notice. However, as with Hillsdale, screening tenants carefully is key.

Investment potential:
Investing in Pagedale makes sense for those looking to enter the market at a low price point. With crime in the area, it’s essential to ensure you get a solid tenant, but the return on investment can be great with the right approach.

3. Velda Village Hills (8% Appreciation)

With 8% appreciation, Velda Village Hills rounds out the top three. This is a small but densely populated area, with 1,090 residents packed into just 0.1 square miles. The population density, coupled with minimal vacant homes, means demand for housing is relatively stable.

Brandon’s thoughts on Velda Village Hills:

“This is a unique part of town. Most of the people living here are over 50, and the police department sits right in the middle of the community. It has a small-town feel despite being part of a larger metro area.”

The 8% appreciation is driven by a combination of the low vacancy rate and new investments in the area. However, as with the other top-performing areas, crime remains a factor, with a D+ rating.

Investment viability:
Velda Village Hills has a lot of potential for those willing to invest. The appreciation rates are promising, but as always, do your homework on tenant background checks and property conditions before diving in.

4. Edmondson (8% Appreciation)

Edmondson is another small area with high appreciation, sitting at 8%. With a population of just 840, it’s located right by the airport, making it a convenient spot for commuters.

Brandon’s perspective on Edmondson:

“It’s a cool little place. The houses are affordable, and the location near the airport adds to the appeal. I’d definitely recommend it to investors.”

Is it worth investing in?
Yes, especially for investors looking for properties close to transportation hubs. The small size of Edmondson means you need to move quickly to find good deals, but the potential is there.

5. Beverly Hills

Beverly Hills, a small area near Velda City, is also seeing some appreciation, though it’s a less discussed neighborhood. Brandon mentioned that while it shares similarities with Velda City, investors tend to overlook it.

Worst Appreciating Areas

On the flip side, there are areas in St. Louis that continue to struggle. Here are the neighborhoods with the worst appreciation rates:

1. Castle Point (Negative 4.2% Appreciation)

Castle Point is a neighborhood with a negative 4.2% appreciation rate, and it's one of the most challenging areas in St. Louis for investors.

Why is Castle Point struggling?

“There are a lot of abandoned buildings in Castle Point, which is dragging the whole area down. It’s going to take a lot more investment to turn things around here. Most properties are sitting on tax lists, burned out, or abandoned.”

Investment risks:
While it may be tempting to buy in at rock-bottom prices, the amount of work needed to bring properties up to livable standards is significant. For now, Castle Point remains a high-risk area for investors.

2. Cool Valley (Negative 4.1% Appreciation)

Cool Valley is another area seeing negative appreciation at 4.1%. Despite its location near the airport, Cool Valley hasn’t attracted much interest from investors.

Brandon’s insight on Cool Valley:

“It’s a small area—less than half a square mile with around a thousand people—but it hasn’t seen much investment. There’s potential here, but it’s a tough sell for now.”

3. Jennings (Negative 4.1% Appreciation)

Jennings, one of the largest municipalities on the list with a population of 15,000, is also seeing a decline. With a negative 4.1% appreciation rate, it’s struggling despite being a hotspot for out-of-town investors.

Why Jennings is declining:

“Jennings has its issues, from high crime to administrative challenges. There are some areas that are better than others, but overall, the market is tough. Out-of-town investors are still buying properties sight unseen, but they may not fully understand the challenges they’re walking into.”

4. Delwood (Negative 2.8% Appreciation)

Delwood is another area with a negative 2.8% appreciation rate. Unlike some of the other struggling areas, Delwood has larger homes, which makes renovations more expensive.

Investment challenges:
Larger homes in Delwood mean more work and higher costs for investors. While there’s potential here, the upfront investment can be daunting.

5. Ferguson (Negative 2.1% Appreciation)

Ferguson, with a population of 22,000, rounds out the list with negative 2.1% appreciation. Despite having some positive aspects—like a decent crime rating and population density—Ferguson’s image has suffered due to high-profile media coverage.

Brandon’s thoughts on Ferguson:

“There’s a lot of potential in Ferguson, but the media image has really hurt it. Some parts of the area are seeing new developments like wine bars and cigar lounges, but it’s still a tough sell for investors.”

Final Thoughts: Balancing Risk and Reward

St. Louis’ real estate market offers a wide range of opportunities for investors, but it’s important to weigh the risks and rewards. In this episode of the podcast, we learned that while some areas like Hillsdale and Pagedale are showing

DATA DISCUSSED IN PODCAST:

TRANSCRIPT:

Welcome back to the Saint Louis Property Manager Podcast, Brandon.
All right, so I’ve pulled Brandon out of his office.
Yeah, and I surprised him—he has no idea what’s happening with this topic today, right?
And, uh, I don’t know how serious we're gonna take today’s conversation, but I think it's gonna be entertaining.
All right, so I pulled the data from Zillow.
So this is Zillow. The Zestimate, or Z-estimate, depending on how you say it.

I wanted to see what the top appreciating areas in Saint Louis were, because if you’re a local investor, property manager, leasing agent, or anything in real estate, you kind of want to know this. Once I pulled the data and looked at it, I didn’t know what to make of it. And this is why.

So everyone out there, take this with a grain of salt. We’re gonna talk about some areas—this is just Zillow’s information, we claim nothing, and we know what’s gonna happen here. We claim no authority over it.

So, you would think the top appreciating area would be Kirkwood or Ladue, right? That’s what you would think, because they’re the most expensive, right? So they’re gonna go up, well... let me look. Let’s see if I can even find—like Frontenac, uh, 5.6% year-over-year. Okay, that sounds about right, that makes sense. Now, would you go up past that? So that’s probably ranked number 20.

Maybe I’ll link this in the YouTube description. We’ll put a link to this data so you can take a look at it if you want. So, let’s go to the first one. We’ll go through them pretty quick. I don’t know these areas, so I’m gonna ask you, because you’re really our Section 8 agent. You’re the only one who really does Section 8 property management, right? So you're in a lot of these areas.

Absolutely.
So, I’ve already tipped—that’s the last surprise. I’m laughing because that’s why I had to pull you out of the office, ‘cause I’m like, okay, number one, the best appreciating area in Saint Louis is Hillsdale at 13.2%.

Doesn’t surprise me, really.

What? Tell me about Hillsdale.

Well, all these areas haven’t been renovated in 20 years, and you get a bunch of out-of-town investors coming into these areas. They’ll take a house that hasn’t been renovated in 20 years, throw a bunch of money into it, and the property value goes up. And that’s what’s happening in those areas. The population is 1,477, which is actually a pretty decent population to cram into 0.3 square miles, yeah.

The population density is pretty high. This is one of those older communities—a lot of older folks there are probably moving out or passing on. The performers—coined as niche or niche, depending on how you say it—right, crime rating: D+.

So, Hillsdale. Would you buy an investment there?

It depends on the street and the house. Some of these neighborhoods are more street-to-street, right? It's kind of like big city living, like in Chicago. It's street-to-street, not so much area-based. The next city has twice the population, slightly worse crime, and that's Pagedale with 11.3% annual appreciation year-over-year. The crime rating is a D, and 3,600 people live there in 1.2 square miles.

Tell me about Pagedale.

Pagedale is just, uh, west of University City, so it backs up to U-City and is smaller than Wellston. The houses are really small, you can probably get a house there for about $50,000, put 10 or 20K into it, and it'll appraise for about $100,000. What's happening is, you've got a lot of people from out of town buying stuff in those areas that locals don’t think about. They buy a couple, put a bunch of money into them, and before you know it, you've got three or four newly renovated houses on the block, and it just keeps happening.

Would you invest in Pagedale?

Yeah, I would, but I'd be cautious with the crime rating. You still have to make sure you get a good tenant in there, so make sure you do your due diligence. Make sure there's no criminal background, they have a good job, decent credit score, and I think you can get some good tenants to stay there.

Next up is Uplands Park, with a population of 460.

Okay, so these are tricky. I'm not really sure where that is exactly. There’s a few of these in here where when I checked, there was like one listing, one sale. The crime rating is N/A, so it’s not even big enough to have that data.

Sycamore Hills has a population of 700 and year-over-year appreciation of 8.6%.

It’s a weird little area right outside of the Ritner School District. Some pretty big houses there, but it’s just one of those places people don’t rehab a lot. If you go in and rehab, it’s nice, and it’s really not that bad compared to Pagedale or Hillsdale.

Velda Village Hills shows 8% appreciation year-over-year.

The population is 1,090 crammed into 0.1 square miles. It’s a very dense little part of town with not many vacant buildings. Most of the residents are probably 50-plus years old. The police department sits right in the middle, and it has a small-town feel.

Edmondson with 8% appreciation and a population of 840.

It’s right by the airport. If you cross the highway, you’re in Edmondson. It’s actually a cool little place.

Beverly Hills?

I don’t think I’ve ever had a rental there, but it’s right outside Velda City, and they border each other. It’s kind of the same feel there.

Let's continue:

Overland has a crime rating of a C and 7.4% appreciation.

Overland is big—16,000 people live there. The population density is good because it’s a larger area, but Overland is still an interesting place with solid appreciation. Most of Overland is in the Ritner School District.

Sharlak: 7.1% appreciation with 14 people.
They have their own police department and are right next to Overland. It’s a tiny little area, but you can find some decent rental properties.

Huntley: 7.1% appreciation with a population of 323.
I honestly don’t know where Huntley is. It's tiny, but it’s seeing solid appreciation.

Saint John: 7% appreciation with a population of 6,871.
It’s a little crowded as far as density goes, but it’s right next to Overland, and there’s still solid investment potential.

Now, let’s move on to the worst-appreciating areas.

Castle Point has a negative 4.2% appreciation.
Castle Point is tough because there are a lot of abandoned buildings. It’s going to take a lot of time and more investors to turn it around.

Cool Valley: negative 4.1% appreciation.
Cool Valley is another weird municipality. It’s small, and you don’t hear a lot of people talking about investing there. It’s right by the airport, but it’s still not getting much attention.

Jennings: negative 4.1% appreciation.
Jennings is a huge municipality with 15,000 people, but it’s seen a decline. Most of the properties are bought sight unseen by out-of-town investors.

Delwood: negative 2.8% appreciation.
Delwood has larger homes, and it’s a bit more expensive to fix up properties there, which is keeping some investors away.

Ferguson: negative 2.1% appreciation with a crime rating of C-.
Ferguson has a population of 22,000, and while it’s had some bad press, there are still investment opportunities. There are pockets of Ferguson that are doing better than others.

Calverton Park: negative 1.7% appreciation.
It’s a tiny area, but it’s not seeing much investment either.

Bellefontaine Neighbors: 0.1% appreciation.
This is a larger area with 11,000 people. The houses vary a lot, but even with larger homes, it can be expensive to bring them up to code, which is limiting the investment potential.

Florissant: 1.6% appreciation with a population of 51,000.
Florissant is still the capital of property management and rentals in North County, but it’s one of the hardest municipalities to deal with. It’s large, but there are still challenges for investors here.

Hazelwood: another area with 1.6% appreciation.
Hazelwood is still an area where people want to invest, and it’s seeing steady growth.

Kirkwood: 2.6% appreciation.
Kirkwood is one of the most popular areas, but even though it’s growing, the appreciation is not as high as you might expect. People are still buying and renovating small homes in Kirkwood and turning them into mini-mansions.