Springfield was recently ranked #7 among the top 10 cities with the biggest rent increases last year.
It’s also a market where more people rent than own where they live, with Millennials, Baby Boomers, and students all creating an on-going demand for rental property in Springfield.
Nicknamed “Queen City of the Ozarks” and the “Birthplace of Route 66," Springfield is located in Southwestern Missouri along the Ozark Mountain Range, and only a few hours drive from Kansas City, St. Louis, and Tulsa.
For a small city of its size, Springfield boasts a robust economy. Industry sectors powering growth in the region include healthcare, manufacturing, education, and tourism. This energetic metropolitan area has a growing job market, expanding population, and a very affordable cost of living that’s well below the national average.
Keep reading to learn why Springfield could keep seeing a rising demand for rental property in 2020.
Metropolitan Springfield ranks #114 for population growth among all 394 metro areas in the U.S. In fact, Springfield has outpaced the population growth in most of Missouri, including the much larger city of St. Louis.
Key Population Stats:
- City of Springfield is home to more than 167,000 residents with about 475,000 people in the metropolitan area.
- Springfield MSA is a five-county region consisting of Greene, Christian, Webster, Polk, and Dallas counties.
- Springfield is the 3rd largest city in Missouri
- Nearly 700,000 people live within a 50-mile radius of Springfield.
- Population growth in the Springfield metro area was 1% last year with a net increase of more than 4,600 net residents in the five-county area.
- Population of the Springfield region grew by nearly 20% over the last 10 years.
- Metro Springfield population is projected to reach over 492,000 in the next few years, growing by about 17,000 people.
Over the last few years, the professional and business services sector in Springfield has grown by nearly 16%. But job growth here is wide-spread across all business sectors.
In fact, people in nearly every industry can find a job in Springfield. That’s because the region is the economic hub of a 27-county area spanning across Missouri and Arkansas and encompassing more than 1 million people.
Key Employment Stats:
- GDP of Springfield MSA is more than $18 billion, according to the Federal Reserve Bank of St. Louis, and has grown by nearly 12% since 2010.
- Job growth in Springfield was 1.7% last year, as reported by Forbes.
- Kiplinger forecasts a state-wide job growth rate of 0.8% this year, with Springfield seeing strong growth in manufacturing and transportation.
- Springfield unemployment rate is just 3.2%.
- About 95% of businesses in Springfield have fewer than 50 employees.
- Healthcare industry in Springfield employs about 18% of the total workforce.
- Other key industry sectors in Springfield include distribution and logistics, advanced manufacturing, call centers and back office support, technology and innovation, corporate office, and data centers.
- Largest employment sectors include education and health services, government, retail trade, leisure and hospitality, professional business services, and manufacturing.
- 3M, Burlington Northern Santa Fe, Expedia, JPMorgan Chase, Kraft Foods, and T-Mobile are a few of the many well-known companies in the Springfield metropolitan area.
- Major employers in Springfield include CoxHealth and Mercy Hospital Springfield, Walmart, Springfield Public Schools, State of Missouri, Bass Pro Shops/Tracker Marine, O’Reilly Auto Parts, City of Springfield, and Chase Card Services.
- Colleges and universities located in Springfield include Missouri State University, Ozarks Technical Community College, Drury University, and Southwest Baptist University.
- 90% of the Springfield residents have a high school degree or higher, while 27.6% hold a bachelor’s degree or advanced degree.
- Interstate and U.S. highways passing through Springfield include I-44 connecting the city to St. Louis and Tulsa, and the Kansas Expressway going north to Kansas City.
- Atlanta, Denver, Detroit, Chicago, and Dallas are all within 1,000 miles or less of Springfield.
- Burlington Northern Santa Fe provides freight rail service in Springfield.
- Springfield-Branson National Airport (SGF) provides non-stop service to 12 destinations served by Allegiant, American, Delta, and United.
Real Estate Market
Springfield is rated among the top 100 up-and-coming real estate markets to watch in 2020, based on key investment criteria such as housing supply, population and job growth, and flow of investment capital.
The Springfield Business Journal agrees with this rating, adding that a housing realignment is taking place in the market. Demand for single-family rentals in Springfield is being driven by college students, downtown professionals, and young couples looking for their first home.
Key Market Stats:
- The median listing price of a house in Springfield is $161,900 according to Zillow (as of January 2020).
- Square foot listing price in Springfield is $101 vs. $109 per square foot in the Springfield metropolitan area.
- Home values in Springfield increased by 6.8% last year and by more than 38% since July 2012 based on the Zillow Home Value Index.
- Average days on market is 65.
- During the listing period 11.1% of the houses for sale in Springfield have a reduction to the listing price.
- 0.5% of the homes in Springfield have a delinquent mortgage vs. 1.1% U.S. average.
- Cities near Springfield with the highest home values include Ozark and Bois D Arc.
- Cities near Springfield with lower homes values include Republic and Fair Grove.
Strong Renters’ Market
Springfield was one of the top 10 cities with the country’s biggest monthly rent increases last year, according to a recent report from the Springfield News-Leader. The city is also ranked 8th for the least expensive rents in the U.S., indicating the potential for future annual rent increases.
The publication notes that some of the factors driving the demand for rental property in Springfield include rising inflation and cost of living, shortage of available housing, and the preference to rent by Baby Boomers and Millennials.
Key Market Stats:
- Median rent in Springfield is $952 per month vs. $941 per month for the metropolitan area.
- Rents in Springfield increased by 9.4% over the past year, according to Rent Jungle.
- Nearly 43% of the housing units in Springfield rent for between $800 and $1,499 per month.
- Nearly 56% of the households in Springfield are renter-occupied.
- Best neighborhoods to live in Springfield include Fremont Hills, Battlefield, Nixa, and Ozark.
Historic Price Changes & Housing Affordability
Real estate investors analyze markets on a macro level to help prioritize when and where to invest. Two readily-available statistics for all real estate markets across the U.S. are the historic changes in housing prices and the affordability of homes.
Reviewing data on price changes can help forecast potential property appreciation over the long term, while housing affordability statistics are one indicator of how strong or weak the demand for rental property may be in a given area.
Each quarter the FHA releases up-to-date data on the change in home prices for all markets across the U.S. The most recent FHA 2019 Q3 House Price Index report for the Springfield, MO MSA (including purchase and refinance mortgages) shows:
- Over the past five years home prices have increased in Springfield by 27.64%
- Over the past year prices have increased by 7.2%
- Over the last quarter home prices in Springfield have increased by 1.78%
To analyze housing affordability in a market, investors often turn to the Housing Affordability Index (HAI) report published by the National Association of Realtors (NAR). The NAR research uses 100 as a baseline HAI, then compares the housing affordability in each market to the HAI baseline.
When assessing the affordability of housing, the NAR considers the amount of median family income needed to purchase an existing single-family home using a conventional mortgage with a 20% down payment.
Based on the NAR’s latest report, the HAI for the Springfield MSA was 218.8 in 2018, the most recent year available. This means that the median family has a little more than two times the income needed to purchase a median priced, single-family resale home in the Springfield, Missouri metro area.
Quality of Life
Springfield is nicknamed the “Queen City of the Ozarks” for very good reasons. It’s a place where living is easy, the job market is growing, with cultural and entertainment options similar to those found in a much bigger city.
Key Quality of Life Stats:
- Forbes ranks Springfield #50 in cost of doing business, #94 in best places for business and careers, and gives the city high ratings for job growth and education.
- Cost of living in Springfield is 9% below the national average.
- U.S. News & World Report rates Springfield as the 80th-best place to live and the 105th-best place to retire.
- Springfield has received national recognition as a great place to live and work from Matador Network, MSN as one of the 15 cities you get the most bang for your buck, WalletHub, Go Banking Rates, and many more.
- Niche.com gives Springfield high ratings for nightlife, diversity, family living, housing, and public schools.
- Springfield is home to more than 900 restaurants and is rated as the 6th best city in the nation for BBQ.
- Climate is humid subtropical with hot humid summers and cold winters, with the most varied weather in the U.S.
- Springfield-Greene County boasts 120 parks, 100 miles of trails, and is home to four national parks and forests.
- Downtown Business Improvement District in Springfield is the perfect place for entrepreneurs, foodies, families, and art lovers.
- Mercy Hospital Springfield is ranked as the 5th best hospital in Missouri by U.S. News & World Report.
- Springfield hosts NCAA college teams from Missouri State University and Drury University, while the Missouri Sports Hall of Fame celebrates Olympic athletes and teams who trained in the city’s Olympic Development Program.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Springfield based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
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