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!
Kansas State Housing Market Update
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. This section will delve into the Kansas housing market trends for March 2023, focusing on closed sales, active listings, average days on the market, and average sales price.
The Kansas housing market trends for March 2023 show that the state is experiencing a severe shortage of inventory, leading to increased competition among buyers. Despite the decrease in closed sales, the average sales price is still increasing, indicating that demand for available homes remains high. The state's housing market is poised for continued growth, making it an attractive destination for investors and homeowners alike.
Closed Sales
According to the Kansas Association of REALTORS®, Kansas experienced a 13.8% decline in closed home sales in March 2023 compared to the same period in the previous year. This decrease in closed sales is a reflection of a shortage of inventory on the market. Despite this decline, the average sale price across the state increased by 0.3%, indicating continued demand for available homes.
Active Listings
Active listings in Kansas saw a decline of 23% in March 2023 compared to March of the previous year. This decrease in active listings shows that the state is experiencing a severe shortage of inventory, leading to increased competition among buyers.
Average Days on the Market
The average days on the market for homes in Kansas increased by 5 days in March 2023 compared to the same period in the previous year. This increase indicates that buyers are taking longer to make purchasing decisions, possibly due to a lack of available inventory, increased competition, or more rigorous lending standards.
Average Sales Price
The average sales price for homes in Kansas increased by 0.3% in March 2023 compared to the same period in the previous year, with a statewide average sale price of $277,653. Despite the decline in closed sales, the modest increase in the average sales price indicates that demand is still strong and that the state's real estate market remains a viable investment opportunity.
Kansas City, Kansas home values will end the year up 13.8 percent and then rise by another 6.5 percent next year according to the 2023 Kansas City Housing Forecast published by the Wichita State University Center for Real Estate.
Home prices: The frenzied demand that characterized the market through the early part of this year appears to have eased. Nevertheless, extremely tight inventories will continue to put upward pressure on home prices. Kansas City values should end the year up 13.8 percent before slowing to 6.5 percent in 2023.
Home sales: Total home sales in the Kansas City area should end the year down 8.3 percent at 41,940 units due to a combination of a lack of inventory and softening demand. Sales activity should rebound in 2023, rising 5.6 percent to 44,290 units.
Construction: Single-family permitting activity in the Kansas City metropolitan area slowed over the first half of this year due to supply chain issues and labor shortages. Kansas City should end the year with 6,295 single-family permits, down 10.7 percent from 2021. Permitting activity should drop again slightly in 2023, falling 1.7 percent to 6,185 units.
Missouri Housing Market Trends
Missouri REALTORS® recently released their monthly statistics report, which provided insights into the state's real estate market for March 2023. The Missouri real estate market continues to experience low inventory levels and high buyer demand, leading to increased home prices.
However, the drop in sales in March 2023 may indicate that some buyers are being priced out of the market due to high mortgage interest rates. It will be interesting to see how the market evolves in the coming months. Here are the key takeaways from the report.
Residential Property Sales in Missouri
In March 2023, Missouri REALTORS® sold 5,762 residential properties, a decrease of 10.4 percent compared to the same period in 2022. However, despite the drop in sales, the median sales price increased by 3.5 percent to $235,000. This can be attributed to low inventory levels and high demand from buyers.
Average Residential Sale Price in Missouri
The average residential sale price in Missouri also increased by 2.2 percent to $277,887 compared to March 2022. This indicates that buyers are willing to pay more for their desired properties.
Total Dollar Volume in Missouri
Due to fewer home sales, the total dollar volume generated in March decreased by 10.4 percent. Over 1.6 billion dollars was generated in March compared to 1.7 billion dollars for the same period last year.
Mortgage Interest Rates in Missouri
The average 30-year fixed mortgage interest rate in Missouri decreased from 6.54 percent in March to 6.31 percent in April 2023. However, this rate is still significantly higher than March 2022, which was 4.17 percent.
First Quarter Results
For the first quarter of 2023 (January 1 to March 31), 13,952 homes were sold in Missouri, generating a total sales volume of $3.7 billion. The median sales price for the first quarter decreased by 4.7 percent compared to the same period in 2022, coming in at $225,000.
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 April 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 +3.2% to $344,255.
- Home sales in the Kansas City area totaled 2795 units in April, down 21.6 percent from the same month in 2022.
- Pending sales were also down by 15.7% to 3587 properties being under contract.
- Homes that sold in April were on the market for an average of 38 days and sold for 81 percent of their original asking prices.
- The number of active listings increased by 0.2% year-over-year, which makes the supply equal to 1.4 months (up 16.7% 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 Real Estate 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 for 2023? The average home value in Kansas City is currently $228,545, with a 1-year value change of +4.8%.
Market Trends by Zillow:
Median sale to list ratio: 0.994 (March 31, 2023)
Percent of sales over list price: 31.2% (March 31, 2023)
Percent of sales under list price: 49.0% (March 31, 2023)
Median days to pending: 5 (April 30, 2023)
The Kansas City MSA real estate market is expected to continue its growth trend in 2023-2024, with a projected increase of 0.5% by the end of April 2023, 0.8% by the end of June 2023, and 2% by the end of March 2024.
With the current low inventory levels and high demand for homes, the market will continue to favor sellers, leading to increased home values and a competitive market for buyers. However, the projected growth in the Kansas City MSA in 2023-2024 provides opportunities for investment and long-term gain in the real estate 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
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Kansas City.
Consult with one of the investment counselors who can help build you a custom portfolio of Kansas City turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Kansas City, MO
Not just limited to Kansas City or Missouri but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Kansas City turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Is It The Right Time To Buy Real Estate? Last year was a big one for the nation's housing market. This year, sales and price growth will continue to be propelled by still-strong housing demand. That growing demand is compounded by younger millennials, who are in their prime buying years. About 4.8 million millennials turned 30 in 2021. These first-time buyers are expected to enter the home-buying to build equity in the US housing market. The wave started in 2020, with 4.7 million Millennials turning 30, an age when many people consider buying a home.
Refinancing your mortgage can be a good financial move. This is especially useful if the new rate would be significantly lower. If you got your initial mortgage a decade ago, you may find that a new rate would be low enough to save you tens of thousands of dollars. Refinancing to the short term can also save you thousands of dollars.
Let us know which real estate markets in the United States you consider best for real estate investing!
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
