Springfield is rated as one of the best markets for renters in the U.S. based on factors such as rental market activity, affordability, and a great quality of life. That helps to explain why Springfield was also recently ranked #7 among the top 10 cities with the biggest rent increases last year.
The metro area is a place where more renter households than owner-occupied, 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 2021.
Metropolitan Springfield ranks #114 for population growth among all 394 metro areas in the U.S. based on the most recent census date. 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 468,000 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 1.44% 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.
Last year the job market in Springfield declined by about 3.56%. Today, the economy is quickly recovering. According to the most recent data from the U.S. Bureau of Labor Statistics (BLS Oct. 2020), employment sectors in Springfield rebounding the fastest include construction, manufacturing, information technology, and professional and business services.
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.
As history shows, it’s likely that 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 11% over the last ten years.
- Employment growth in Springfield declined about 3.6% last year but grew by 1.7% the previous year, as reported by Forbes.
- Springfield unemployment rate is just 3.0% as of October 2020, about the same rate as it was pre-pandemic.
- 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.
- 90.6% of the Springfield residents have a high school degree or higher, while 27.5% 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 ranked as one of the eight best housing markets for real estate investing. According to DoughRoller, homes in Springfield may be undervalued compared to historic income and home price data. This means that rental property in Springfield could provide investors with an extra bonus due to appreciation in addition to recurring cash flow.
Key Market Stats:
- Zillow Home Value Index (ZHVI) for a home in Springfield is $160,635 based on market data through Nov. 2020.
- Home values in Springfield have increased by 10.2% year-over-year and are forecast to grow another 11.2% in the next 12 months.
- Over the last five years home values in Springfield have increased by nearly 40%.
- Median listing price of a single-family home in Springfield is $174,900 according to the most recent report from Realtor.com (November 2020).
- Median listing price per square foot of a home for sale in Springfield is $102.
- Listing prices of homes in Springfield have trended up by 13.3% year-over-year.
- Average sales price of a home in Springfield is $225,556 as of Oct. 2020 according to the Greater Springfield Board of Realtors (GSBOR).
- Days on market from the time a home is listed to when it goes under contract is 33.
- Months of inventory is 1.61, where anything less than a six month supply indicates a shortage of homes for sale.
- Of the 48 neighborhoods in Springfield, Lake Springfield is the most expensive with a median home listing price of $269,900.
- Most affordable neighborhood in Springfield to buy a home is Tom Watkins where the median listing price is $69,200.
Attractive Renters’ Market
The Springfield housing market is rated by WalletHub as one of the best cities for renters. The ranking uses key criteria including activity in the rental market, affordability, and the quality of life.
Historically, Springfield has been ranked as one of the top 10 cities with the country’s biggest monthly rent increases, according to the Springfield News-Leader. The city was 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 for a 3-bedroom home in Springfield is $995 per month according to Zumper.
- Rents in Springfield have increased by 11% year-over-year.
- Majority of rental housing in Springfield rents for less than $1,300 per month.
- Renter-occupied households make up 52% of the occupied housing units in Springfield.
- Most affordable neighborhoods in Springfield for renters include Walnut Street, Webster Park - Shady Dell, and Northwest Springfield.
- Neighborhoods with the highest rents in Springfield include Rountree Area, Phelps, and Downtown Springfield where average monthly rents are $1,100 or more.
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 month Freddie Mac releases its Home Price Index (FMHPI) report with up-to-date data on the change in home prices for all markets across the U.S. The most recent FMHPI from Freddie reveals how home prices in Springfield have been increasing over the last several years:
- October 2015 HPI: 127.11
- October 2020 HPI: 174.31
- 5-year change in home prices: 37.1%
- One-year change in home prices: 9.9%
- Monthly change in home prices: 1.0%
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 82nd-best place to live and the 123rd-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 4th 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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