The Kansas City housing market is hot and in many ways the envy of housing pundits on both coasts. This dynamic market spans both Missouri and Kansas and is characterized by rising home prices, low inventory, and a fiercely competitive market. Whether you’re a buyer or a seller, staying on top of the latest trends and forecasts for 2023 is crucial. In this article, we’ll provide a comprehensive overview of the Kansas City housing market by delving into the latest data, insights, and predictions. So, let’s dive right in!
Current Kansas State Housing Market Trends 2023
Kansas City is also in the state of Kansas. It is the third-largest city in the U.S. state of Kansas, and the county seat of Wyandotte County. The following housing market trends are the state of Kansas and the Kansas City located there. Kansas is a state in the Midwestern United States that has seen some significant changes in its housing market in recent years. We will explore the market highlights for September 2023, including home sales, prices, and mortgage rates, as reported by the Kansas Association of REALTORS® (KAR).
As of October 24, 2023, KAR president Thomas Howe from McGrew Real Estate in Lawrence emphasizes that despite the higher mortgage rates, the market retains its essence as a seller’s market. An intriguing revelation is that in September, an impressive half of all homes were sold at or above the original listing price.
Home Sales Dynamics
The September 2023 data unveils a 15.6% decline in home sales in Kansas compared to the same period in the previous year. This aligns with the national trend, where sales dipped by 15.4% in 2022. The challenges posed by the evolving market dynamics are evident, reflecting the need for a nuanced approach for both buyers and sellers.
Escalating Home Prices
Despite the dip in sales, there’s a notable surge in home prices across the state. The statewide average sale price in September reached $295,577, marking a 4.1% increase compared to the previous year. Zooming out to the broader Midwest, prices rose by 4.7%, while the entire US experienced a 2.8% increase. This upward trajectory in prices emphasizes the resilience of the real estate market in the face of challenges.
Mortgage Rate Impact
One of the significant factors influencing the market is the increasing mortgage rates. The national average commitment rate on a 30-year conventional mortgage for the week ending October 13, 2023, reached 7.63%. This surge in mortgage rates necessitates a strategic approach for potential buyers and underscores the importance of timely decision-making in a changing financial landscape.
Missouri Housing Market Trends
In this in-depth analysis, we delve into the current trends in the Missouri housing market, examining key indicators such as the number of listings, year-to-date figures, and monthly details. This comprehensive overview (by Missouri REALTORS®) aims to provide valuable insights for both potential homebuyers and real estate professionals.
Number of Listings: A Steady Rise
June-23: 8,877 listings
July-23: 9,168 listings
August-23: 9,902 listings
September-23: 10,509 listings
October-23: 11,012 listings
From June to October 2023, the number of listings has shown a consistent upward trajectory, reaching a total of 11,012 listings. This growth suggests a dynamic and active real estate market in Missouri.
Year-to-Date Figures: A Comparative Analysis
Comparing year-to-date figures from October 2020 to October 2023:
- Number of Residential Properties Sold – YTD: 60,180 (-16.0% vs 2022 YTD, -25.4% vs 2021 YTD, -16.9% vs 2020 YTD)
- Median Residential Property Selling Price – YTD: $250,000 (4.2% vs 2022 YTD, 15.7% vs 2021 YTD, 34.4% vs 2020 YTD)
Despite a decrease in the number of properties sold, the median selling price has seen a significant increase, indicating a potential shift in market dynamics towards higher-value properties.
Monthly Detail Comparison: October Trends
Comparing October 2021, October 2022, and September 2023:
- Number of Homes Sold: 5,957 (-2.2% Oct. vs Sept., -5.7% Oct. ’23 vs Oct. ’22, -30.2% Oct. ’23 vs Oct. ’21)
- Number of Days on Market: 34 (3.0% Oct. vs Sept., 6.3% Oct. ’23 vs Oct. ’22, 21.4% Oct. ’23 vs Oct. ’21)
- Average Selling Price: $295,985 (-3.1% Oct. vs Sept., 4.8% Oct. ’23 vs Oct. ’22, 14.6% Oct. ’23 vs Oct. ’21)
- Median Selling Price: $247,500 (-1.4% Oct. vs Sept., 5.3% Oct. ’23 vs Oct. ’22, 15.1% Oct. ’23 vs Oct. ’21)
- Monthly Dollar Volume: $1,763,179,976 (-5.2% Oct. vs Sept., -1.2% Oct. ’23 vs Oct. ’22, -20.0% Oct. ’23 vs Oct. ’21)
October 2023 has seen a slight decrease in the number of homes sold and a longer duration on the market. However, both average and median selling prices remain relatively stable, indicating resilience in property values despite market fluctuations.
Kansas City, Missouri Housing Market Report
Located on the Missouri River at the confluence with the Kansas River, the city is contiguous with Kansas City, Kansas. But most of Kansas City lies within Jackson County, Missouri. A large, prosperous, self-sufficient, and culturally rich city, it is no wonder why it has seen a continuous rise in its employment, directly impacting the local real estate.
Here are the Greater Kansas City housing market statistics for October 2023 as reported by the Kansas City Regional Association of Realtors (KCRAR).
- In the Greater Kansas City housing market, the average sales price is up +3.4% to $350,892.
- Home sales in the Kansas City area totaled 2782 units in October, down 10.3 percent from the same month in 2022.
- Pending sales were also down by 0.4% to 2693 properties being under contract.
- Homes that sold in October were on the market for an average of 36 days and sold for 98 percent of their original asking prices.
- The number of active listings decreased by 11.8% year-over-year, which makes the supply equal to 2.1 months (up 10.5% YoY).
- Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.
- It is a good indicator of whether a real estate market favors buyers or sellers, and Kansas City is a seller’s market.
Kansas City, MO Housing Market Forecast 2023-2024
Kansas City’s housing market is one of the most affordable in the nation. It is one of the hottest real estate markets for affordable rental real estate investment. What are the Kansas City real estate market predictions? The housing market has been displaying notable trends and growth over the past year.
As of October 31, 2023, Zillow’s latest insights into the Kansas City housing market reveal a robust and dynamic landscape. The average home value in Kansas City stands at $227,994, marking a 5.1% increase over the past year. Remarkably, homes go pending in a mere 7 days, emphasizing the speed and competitiveness of the local real estate scene.
Key Metrics and Trends
- For Sale Inventory (October 31, 2023): 1,378
- New Listings (October 31, 2023): 637
- Median Sale to List Ratio (September 30, 2023): 1.000
- Median Sale Price (September 30, 2023): $247,437
- Median List Price (October 31, 2023): $233,300
- Percent of Sales Over List Price (September 30, 2023): 45.0%
- Percent of Sales Under List Price (September 30, 2023): 34.6%
The for-sale inventory, new listings, and the median sale price showcase the vibrancy of the market, while the high percentage of sales over list price underlines the competitiveness among buyers.
Kansas City MSA Housing Market Forecast
Zillow’s forecast for the Kansas City Metropolitan Statistical Area (MSA) for the upcoming months is as follows:
- Base Date (October 31, 2023): 0.2
- 30-11-2023: 0.0
- 31-01-2024: -0.3
- 31-10-2024: -0.3
This forecast suggests a modest decline in the housing market, reflecting a nuanced shift in the region’s real estate dynamics.
The Kansas City Metropolitan Statistical Area (MSA), encompassing regions in Missouri, is a significant economic and cultural hub. Comprising various counties, including but not limited to Jackson, Clay, Platte, and Cass, this MSA plays a pivotal role in the Midwest’s housing market. The forecasted trends for 2023 and 2024 provide valuable insights for those navigating the real estate landscape in this vibrant region.
Analyzing Current Trends: Are Home Prices Dropping?
As of the latest available data, there are indications of nuanced shifts in the housing market. While the median sale price in the Kansas City area has seen a 5.1% increase over the past year, suggesting overall growth, specific factors may contribute to variations in local markets. It’s crucial to assess regional dynamics and consider factors such as supply and demand, economic conditions, and local policies to determine the trajectory of home prices.
Buyer’s or Seller’s Housing Market: Understanding the Landscape
The current state of the housing market can be viewed in terms of whether it favors buyers or sellers. In markets where demand exceeds supply, sellers typically have the upper hand, leading to a seller’s market. Conversely, if supply outpaces demand, buyers may find more negotiating power in a buyer’s market. The competitive nature of the Kansas City market, with homes going pending in approximately 7 days and a significant percentage of sales over list price, suggests a market that leans towards sellers. However, localized factors can influence this dynamic, and it’s essential to consider specific neighborhoods and property types.
Predicting a Housing Market Crash: Assessing Risks and Realities
The prospect of a housing market crash is a topic of concern for many. While predicting market crashes is challenging, certain indicators can offer insights into potential risks. Factors such as economic downturns, rising interest rates, and excessive speculation can contribute to market instability. As of now, the data available for the Kansas City area indicates a resilient market, with moderate fluctuations in key metrics. However, continuous monitoring of economic indicators, policy changes, and global economic conditions is crucial for a comprehensive assessment of potential risks to the housing market.
Kansas City, MO Real Estate Investment Overview
Is Kansas City a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Kansas City is a good investment. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers. Kansas City is the largest city in the U.S. state of Missouri, famous for its distinct barbeque cuisine and jazz heritage. Also nicknamed the City of Fountains, Kansas City is now emerging as a growing market for real estate investments.
When we refer to the Kansas City housing market, it comprises the Kansas City metropolitan area, which is a bi-state metropolitan area anchored by Kansas City, Missouri. Its 14 counties straddle the border between the U.S. states of Missouri (9 counties) and Kansas (5 counties). It is the second-largest metropolitan area centered in Missouri (after Greater St. Louis) and is the largest metropolitan area in Kansas, though Wichita is the largest metropolitan area centered in Kansas.
Kansas City, MO is a minimally walkable city in Jackson County with a population of approximately 460,377 people. In the past ten years, the annual real estate appreciation rate has amounted to 2.88% in Kansas City, according to NeighborhoodScout.com. Kansas City has a mixture of owner-occupied and renter-occupied housing units. Three and four-bedroom single-family detached homes are the most common housing units in Kansas City. Other types of housing that are prevalent in Kansas City include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.
If you are looking to make a profit, you don’t want to buy the most expensive property in the Kansas City real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Kansas City that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Top Reasons To Invest In Kansas City Real Estate
- Kansas City is the largest city in Missouri and is the sixth-largest in the Midwest.
- Kansas City has long been a favorite of real estate investors.
- Affordable Turnkey Properties.
- The largest city in the state of Missouri.
- The population is expected to grow to 2,200,000 by 2020.
- 1-year positive appreciation forecast (ZHVI).
- #62 in the U.S. out of the top 100 MSAs – FHFA.
Overview of Kansas City & its Real Estate Market
Kansas City is a large, prosperous, self-sufficient, and culturally rich city located astride the Missouri River. In the metropolitan area, the population is estimated at 2.1 million. The median household income in Kansas City is 45,376 and the median home price is $146,300. Kansas City is the largest city in Missouri and is the sixth-largest in the Midwest. It hosts the Kansas City Chiefs as well as the Kansas City Royals. It’s home to some of the Best Ribs in America.
The city has over 200 water fountains, making it only second to Rome, Italy, hence the nickname “City of Fountains.” It is also important to remember that only Paris, France has more Boulevards. In 2017, a WalletHub survey for real estate market growth in the United States listed the “Kansas City Real Estate Market” at number 18 out of 300 of the fastest-growing cities in the US.
Kansas City has started to do some major revitalization downtown. More than $6 million has been spent giving the downtown area a facelift and new makeover, including, apartments, offices, and condominiums. These facelifts have also been done in both indoor and outdoor malls, restaurants, and places for concerts, plays, and other forms of entertainment. Kansas City real estate is very affordable; the home prices are near the national average. All of these make Kansas City properties attractively appealing to investors and homebuyers who are looking for gains in cash flow.
Employment in Kansas City
Employment in Kansas City is diverse, with major industries including healthcare, finance, and manufacturing. The city has a low unemployment rate and a growing job market, making it an attractive place to live and work. The unemployment rate in Kansas City, MO, is currently at 2.80% for March 2023, which is lower than the long-term average of 6.06%.
This rate is slightly higher than the 2.7% reported in February 2023. Comparatively, the US average unemployment rate is 6.0%. This indicates that the unemployment rate in Kansas City is significantly lower than the national average.
Kansas City is experiencing a period of growth, with a thriving job market, a vibrant arts and culture scene, and numerous new development projects. The city’s population is also steadily increasing, with more people choosing to call it home. This growth is expected to continue in the coming years, making Kansas City an attractive destination for businesses and individuals alike.
Great Place to Live Due To Rich Culture & Favorable Weather
The city is known for its distinct barbeque cuisine and uniquely crafted breweries, which makes it a preferred destination for foodies. It has more than 100 barbecue restaurants and is known in Missouri as the “world’s barbecue capital. The ancient heritage of Jazz music makes it suitable for immigrants who are passionate about music.
The city lies on the shores of the Missouri & Kansas Rivers with a landscape full of fountains. The overall ambiance and accommodating culture are sure to attract more and more residents into the city, which will prove to be a boon for investments in Kansas City Real Estate Market. The weather in Kansas City is beautiful and usually clear and sunny.
September, May, and June are the most pleasant months in Kansas City, while January and December are the least comfortable month. You can almost always count on the 4th of July to be a great day to BBQ and shoot off fireworks and watch your neighbors shoot theirs, creating a competition. The neighborhood fireworks shows have always been as big as the city’s, only the last half of the night.
During the shows, everyone in the neighborhood waters the top of their houses for a week straight to avoid catching fire. Where else in America can you find that? Even better, the people are friendly and the weather is inviting. There are nearby lakes for boating, fishing, swimming, and camping. The weather is almost always enjoyable. They get most of their rain in the spring of April and the summer month of June.
Cost of Living in Kansas City
Another great factor that is seen as a boon to the Kansas City real estate market is the cost of living. The cost of living in Kansas City is reasonable and affordable. With the cost of rent and the price you might pay for a house already discussed, there’s the cost of day-to-day expenses to consider. A basic lunch around the business district is around $12 unless you go to a fast-food restaurant and order a combo meal, then you’re looking at $7.
Milk is around $3.50 a gallon, a 2 lt. A bottle of Coca-Cola is $1.82. These prices are about the same as the national average at –1%. Housing is at 8% below. Kansas City is 15% below Oklahoma and 8% below Indiana. In fact, New York City is 129% above compared to Kansas City, while 14% below Miami, Fl, and 23% below Chicago.
Summary of the cost of living in Kansas City:
- Four-person family monthly costs: $3,331.71 without rent.
- A single-person monthly costs: $935.08 without rent.
- Rent Prices in Kansas City, MO are 32.81% higher than in Wichita, KS
- Rent Prices in Kansas City, MO are 63.21% lower than in New York, NY.
- Rent Prices in Kansas City, MO are 26.01% lower than in Atlanta, GA
Rich and Stable Neighborhoods
The city is surrounded by neighborhoods like River Market District as well as the 18th & Vine District and the Country Club Plaza on its north, east & south sides respectively. These vicinities, in combination with the city’s vibrant real estate market, comprise all amenities residents and non-residents alike can take advantage of and put their investments in.
Some of the best neighborhoods in or around Kansas City, Missouri are Waldo, Raytown, The Downtown Loop, Northland, Westwood Hills, Patrician Woods, Chapel, Pendleton Heights, Crossroads, Turner, Westwood, Downtown Kansas City, Ward Parkway, Lake Quivira, Nashua, Shawnee Mission, and Briarcliff-Claymont.
Good Neighborhoods in Kansas City To Invest in Real Estate
- The Johnson County of Kansas City: It is high on the list of home buyers as an ideal place to raise a family. It has highly accredited school districts within the county, which include Shawnee Mission, Gardner Edgerton, Spring Hill, Blue Valley, Olathe, and De Soto. Most subdivisions see steady property valuation increases year after year.
- The Prairie Village, Kansas City: It is another good neighborhood with low crime rates, mature trees, plenty of quiet neighborhood parks, and accessible community pools.
- Leawood, Kansas City: It is a low crime rate area and it’s safer than 79 percent of U.S. cities. The residents have a median household income of $133,702, so they are quite well off. The region is home to the biggest Methodist church in the nation – the United Methodist Church of the Resurrection.
- Lenexa, Kansas City: This neighborhood has a median listing price of $394,000. Fifty-four percent report some school education, contrasted with the national average of 22 percent for all cities and towns.
Low median sales prices, which in return, drive a solid rent are another reason to look into the Kansas City real estate market. Add to that the weather, the many activities at your disposal, and the famous “Kansas City BBQ.” There isn’t much left to desire when investing in the real estate market. Take a look around, make some calls, and talk to some of the people around Kansas City before you decide.
Good cash flow from Kansas City investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Kansas City real estate investment opportunity would be key to your success. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties.
The neighborhoods in Kansas City must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. As with any real estate purchase, act wisely. Evaluate the specifics of the Kansas City housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Kansas City.
Here are the top ten neighborhoods in Kansas City having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- South Hyde Park
- Westside North / Westside South
- 18th and Vine and Downtown East / Downtown East
- Crossroads
- Columbus Park
- River Market
- Longfellow
- Pendleton Heights
- Western 49-63
- Eastern 49-63 / Rockhurst University
Sources:
- https://kcrar.com/media-statistics/market-statistics/
- https://kansasrealtor.com/news-media/market-stats/
- https://www.zillow.com/kansas-city-mo/home-values
- https://www.redfin.com/state/Missouri/housing-market/
- https://www.kansascity.com/news/local/article244912977.html
- https://realestate.wichita.edu/data-research/data-by-market/kansas-market/
- https://www.realtor.com/realestateandhomes-search/Kansas-City_MO/overview
- https://www.neighborhoodscout.com/mo/kansas-city/real-estate/
- https://www.fhfa.gov/DataTools/Downloads/Documents/HPI/Fact-Sheets/MSAs/2019Q4/FS-KansasCity-2019Q4.pdf
- http://www.435mag.com/March-2017/Kansas-City-Real-Estate
- https://www.corevestmentfinance.com/hot-markets-for-residential-real-estate-investors-2018
