Archives for September 2024

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 2024 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!

Kansas City Housing Market Trends – July 2024

 

Let's dive deeper into what these numbers mean for buyers, sellers, and investors in the Kansas City metro area.

Rising Prices in the Heart of America

The standout statistic from the latest report is the 4.3% increase in average sales price, bringing the typical Kansas City home to $368,166. This uptick outpaces inflation and reflects the strong demand for housing in the metro area.

For homeowners, this appreciation is welcome news, potentially adding thousands to their equity. First-time buyers, however, may find themselves stretching their budgets further than expected. The silver lining? Kansas City remains relatively affordable compared to coastal markets, offering a high quality of life at a fraction of the cost.

Supply and Demand: A Seller's Market Persists

Despite a 7.8% increase in total inventory, bringing available homes to 6,590, the market remains tilted in favor of sellers. Here's why:

1. Months of supply sits at a lean 2.2 months, up 10% from last year but still well below the 6-month benchmark for a balanced market.
2. Days on market increased slightly to 32, indicating properties are moving quickly but not at the breakneck pace of recent years.
3. Percentage of original price received climbed to 98.7%, suggesting sellers are maintaining significant negotiating power.

These factors combine to create a competitive environment for buyers, who often find themselves in multiple offer situations or forced to act quickly on desirable properties.

Closed Sales and Pending Transactions: Signs of Market Velocity

The 4.9% increase in closed sales, totaling 3,539 transactions, demonstrates robust market activity. However, the slight 0.4% dip in pending sales (3,324) could indicate a minor cooling off or simply reflect seasonal patterns.

For real estate professionals and market watchers, these numbers suggest a market that's still moving at a brisk pace but may be showing early signs of normalization after years of frenzied activity.

Neighborhood Spotlight: Where to Look in KC

While the report provides metro-wide statistics, savvy buyers and investors know that real estate is hyper-local. Here are some Kansas City neighborhoods to watch:

• Brookside: Known for its charming bungalows and vibrant community, Brookside continues to attract young professionals and families.
• River Market: This downtown adjacent neighborhood offers urban living with easy access to the streetcar and local attractions.
• Waldo: With its mix of affordable homes and trendy shops, Waldo remains a popular choice for first-time buyers.
• Lee's Summit: This eastern suburb has seen significant growth, offering newer homes and excellent schools.

Economic Factors Driving the KC Housing Market

Kansas City's housing market doesn't exist in a vacuum. Several economic factors are influencing current trends:

1. Job market strength: The metro area's diverse economy, spanning healthcare, technology, and manufacturing, continues to attract new residents.
2. Interest rates: While higher than recent years, mortgage rates remain historically reasonable, supporting home purchases.
3. New construction: Despite supply chain challenges, new home construction is helping to alleviate some inventory pressure.
4. Remote work: The flexibility of work-from-home arrangements has expanded the pool of potential buyers looking in the KC area.

Average House Price in Kansas City: A Look at the Current Market

The average house price in Kansas City has been on an upward trajectory, reflecting the city's growing popularity and competitive real estate market. As of July 2024, Zillow reports that the average Kansas City, MO home value is $242,048, a significant 5.0% increase year-over-year. What's driving this growth and what does it mean for potential buyers and sellers? Let's delve into the details.

Here's a snapshot of median home values in some Kansas City neighborhoods (as of July 31, 2024, from Zillow):

Neighborhood	Median Home Value
Northeast Industrial	$78,930
Pendleton Heights	$258,432
Sarritt Point	$140,238
Columbus Park	$311,426
Independence Plaza	$140,026
River Market	$280,188

It's essential to note that these are just a few examples, and prices can vary greatly even within neighborhoods based on factors like property size, condition, and proximity to amenities.

Kansas City Housing Market Forecast 2024-2025

While no one has a crystal ball, several factors suggest the Kansas City housing market will remain strong through 2024:

1. Continued population growth: The metro area's affordability and quality of life continue to attract new residents.
2. Infrastructure investments: Projects like the new KCI airport terminal and downtown streetcar expansion enhance the city's appeal.
3. Tech sector expansion: Companies like Garmin and Cerner drive high-paying job growth, supporting housing demand.
4. Cultural renaissance: From the thriving arts scene to championship sports teams, KC's cultural cache is on the rise.

However, potential headwinds include:

• Rising interest rates could dampen buyer demand.
• National economic uncertainty may impact local job growth.
• Affordability concerns if price appreciation continues to outpace wage growth.

Here are sections addressing those specific sub-topics for the Kansas City housing market article:

Is Kansas City a Seller's Housing Market?

The data paints a clear picture: Kansas City remains firmly entrenched in seller's market territory. Several key indicators support this conclusion:

• Low inventory: With only 2.2 months of supply, buyers face stiff competition for available homes. A balanced market typically has 6 months of inventory.
• Quick sales: Properties are spending an average of just 32 days on the market, indicating strong demand.
• High sale-to-list price ratio: Sellers are receiving 98.7% of their original asking price on average, suggesting limited room for negotiation.
• Rising prices: The 4.3% year-over-year increase in average sales price favors those looking to sell.

However, it's not all doom and gloom for buyers. The slight uptick in inventory (7.8% increase) and days on market (3.0% increase) hint at a potential softening of the market's most extreme seller-friendly conditions. Savvy buyers may find opportunities, especially if they're willing to act decisively and consider a range of neighborhoods.

For sellers, these conditions present an excellent opportunity to maximize returns, provided they price their homes realistically and present them well to the market.

Are Home Prices Dropping in Kansas City?

Contrary to concerns about a market cooldown, home prices in Kansas City are not dropping. In fact, they're continuing to climb at a healthy pace. The latest data shows:

• Average sales price: $368,166, representing a 4.3% increase from the previous year
• Percentage of original price received: 98.7%, up 1.2% year-over-year

This upward trajectory in prices reflects several factors:

1. Persistent demand: Despite economic uncertainties, Kansas City's job market and quality of life continue to attract buyers.
2. Limited inventory: While slightly improved, the supply of homes remains constrained, putting upward pressure on prices.
3. Inflation: Some of the price increase may be attributed to overall inflationary pressures in the economy.

It's important to note that while prices are rising metro-wide, individual neighborhoods may experience different trends. Some areas may see more dramatic appreciation, while others might have more stable or even slightly declining prices.

For buyers, this trend underscores the importance of acting sooner rather than later if you're in a position to purchase. Waiting could mean facing even higher prices down the road. Sellers, meanwhile, can feel confident about their position in the market, though it's crucial not to overprice and risk stagnation.

Will the Kansas City Housing Market Crash?

While concerns about a potential housing market crash are understandable given historical cycles and national economic uncertainties, a crash in the Kansas City market appears unlikely in the near term. Here's why:

1. Steady price growth: The 4.3% year-over-year price increase is healthy and sustainable, unlike the double-digit surges seen in some markets that might be prone to correction.
2. Strong fundamentals: Kansas City's diverse economy, relatively affordable housing, and growing population provide a solid foundation for the market.
3. Lack of speculation: Unlike the 2008 crash, there's little evidence of widespread speculative buying or predatory lending practices in the KC market.
4. Tight inventory: With only 2.2 months of supply, there's no glut of homes that could trigger a price collapse.
5. Stringent lending standards: Post-2008 regulations have led to more responsible lending practices, reducing the risk of widespread defaults.

However, it's important to note that the real estate market can be influenced by broader economic factors. A severe national recession or significant interest rate hikes could cool the market, potentially leading to price stagnation or modest declines. But a dramatic “crash” seems improbable given current conditions.

Buyers and sellers should focus on their personal financial situations and long-term plans rather than trying to time the market based on crash fears.

Is Now a Good Time to Buy a House?

The question of whether now is a good time to buy a house in Kansas City depends on individual circumstances, but there are several factors to consider:

Reasons it might be a good time to buy:

1. Rising prices: With average sales prices up 4.3% year-over-year, buying now could mean building equity faster.
2. Competitive mortgage rates: While rates have increased from recent historic lows, they remain attractive by long-term standards.
3. Rent increases: Rising rents in many KC neighborhoods make buying more attractive for long-term financial planning.
4. Tax benefits: Homeownership still offers significant tax advantages for many buyers.

Potential drawbacks to buying now:

1. Limited inventory: With only 2.2 months of supply, finding the perfect home may be challenging.
2. Competitive market: Buyers may face multiple offer situations and have less negotiating power.
3. Affordability concerns: The 4.3% price increase may outpace wage growth for some potential buyers.
4. Economic uncertainty: National economic factors could impact job security and future home values.

Ultimately, the decision to buy should be based on personal factors:

• Are you financially prepared for homeownership, including a down payment and ongoing maintenance costs?
• Do you plan to stay in the home for at least 5-7 years to recoup transaction costs?
• Is your employment stable, and do you feel confident about your long-term prospects in the Kansas City area?
• Have you found a home that meets your needs and fits your budget?

If you can answer “yes” to these questions, then now could indeed be a good time to buy in Kansas City. The market's steady appreciation and the city's strong fundamentals make it a solid long-term investment for many.

Is Kansas City Real Estate a Good Investment?

The whispers are getting louder, the numbers are looking juicier, and you're probably wondering: is Kansas City real estate a good investment right now? As someone who's had their finger on the pulse of the real estate market for years, I'm here to tell you it's a question worth asking. Kansas City has been quietly building a reputation for itself, and now, it's standing in the spotlight.

Why Kansas City? Understanding the Appeal

Kansas City isn't just about barbeque and jazz anymore (though those are definite perks!). Here's what's making Kansas City real estate investments so attractive:

• Affordability: Compared to the sky-high prices of coastal cities, Kansas City offers a breath of fresh air. The median home price is significantly lower, making it a more accessible market for both new investors and seasoned pros.
• Strong Job Market: A healthy job market is the backbone of a thriving real estate scene. Kansas City boasts a diverse economy with major players in healthcare, technology, and finance.
• Growing Population: People are catching on to Kansas City's charm! The metro area has seen consistent population growth, which translates to increased demand for housing.
• Quality of Life: Let's not forget the vibrant culture, delicious food scene, and family-friendly atmosphere that make Kansas City such a desirable place to live.