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!
Current Kansas State Housing Market Trends in 2024
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.
“A lack of supply continues to be an issue as we start the new year,” expressed KAR president Jon Fort of Arc Real Estate in Garden City. This sentiment echoes the persistent challenges faced by the Kansas housing market. The number of homes available for sale is a third lower than pre-pandemic levels, creating a dynamic landscape that demands attention and analysis.
In January 2024, home sales in Kansas experienced a 6.2% decline compared to the same period last year. This dip is part of a broader national trend, with sales across the United States falling by 1.7% over the course of 2023. The intricacies of this decline highlight a need for deeper exploration into the factors influencing the real estate market on both local and national scales.
Soaring Prices Reflecting Market Resilience
Despite the challenges, home prices in Kansas continue their upward trajectory. The statewide average sale price in January reached $277,031, marking a robust 4.9% increase compared to the previous year. Notably, the Midwest experienced a more substantial surge, with prices rising by 7.6%, while the national average witnessed a commendable 5.1% increase. These numbers underscore the resilience of the market, with demand driving prices upward even in the face of supply constraints.
Rising Mortgage Rates: A Shifting Financial Landscape
Another factor influencing the Kansas housing market is the resurgence of mortgage rates. As of the week ending February 16, 2024, the national average commitment rate on a 30-year conventional mortgage stood at 6.90%. This upward movement in rates adds a layer of complexity for both homebuyers and sellers, requiring a strategic approach to navigate the evolving financial landscape.
Therefore, the Kansas housing market in January 2024 presents a scenario marked by challenges and opportunities. While supply constraints pose hurdles, the resilience of the market, reflected in rising home prices, showcases its ability to adapt. As mortgage rates fluctuate, strategic planning becomes essential for those engaging in real estate transactions.
Missouri Housing Market Trends in 2024
The Missouri housing market for January 2024 exhibits a blend of positive and challenging trends. While the number of listings has decreased, indicating potential shifts in supply and demand dynamics, the median residential property selling price continues to rise.
Overview of Listings
Number of Listings: The Missouri housing market has experienced a noticeable shift in the number of listings over the past few months. According to the Missouri REALTORS®, in January 2024, there were 8,727 listings, marking a decline from 9,172 in December 2023. This decrease follows a trend observed since September 2023 when the number of listings was at its highest, reaching 11,012.
Year-to-Date Figures
Residential Properties Sold – YTD: Despite fluctuations, the year-to-date figures for 2024 show a 4.2% increase compared to the same period in 2023. However, there is a substantial 26.8% and 26.5% decrease when compared to the years 2022 and 2021, respectively.
Median Residential Property Selling Price-YTD: The median residential property selling price has shown a consistent upward trend. In January 2024, it stood at $234,900, reflecting a 6.8% increase from November 2023 and a significant 22.5% surge from January 2023.
Monthly Detail Comparison
Number of Homes Sold: January 2024 witnessed 3,969 homes being sold, indicating a 4.2% increase from the previous month. However, compared to January 2023, there was a notable 26.8% decline, presenting a dynamic scenario in the Missouri housing market.
Number of Days on Market: The average number of days on the market increased by 22.5% from December 2023 to January 2024, reaching 49 days. This rise indicates a potential shift in buyer behavior and market dynamics.
Average and Median Selling Prices: While the average selling price experienced a marginal 1.4% decrease from December 2023 to January 2024, the median selling price remained stable at $234,900, showcasing a 6.8% increase from January 2023.
Monthly Dollar Volume: The monthly dollar volume in January 2024 was $1,106,718,609, reflecting a 9.4% decrease from December 2023. This decline in dollar volume suggests a possible adjustment in the overall market value of residential properties in Missouri.
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 January 2024 as reported by the Kansas City Regional Association of Realtors (KCRAR).
- In the Greater Kansas City housing market, the average sales price is up +3.7% to $324,307
- Home sales in the Kansas City area totaled 1802 units in January, down 4.9 percent from the same month in 2023.
- Pending sales were up by 11% to 2239 properties being under contract.
- Homes that sold in December were on the market for an average of 46 days and sold for 96 percent of their original asking prices.
- The number of active listings decreased by 8.8% year-over-year, which makes the supply equal to 1.7 months (up 6.3% 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 for 2024 and 2025
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? Based on the current data and trends, there is no indication of an imminent housing market crash in Kansas City. The market appears stable, with healthy demand and rising home values.
According to Zillow, the Kansas City housing market is displaying resilience and growth, with the average home value reaching $226,623, reflecting a substantial 6.5% increase over the past year. Homes in this region are swiftly moving, typically going pending in approximately 13 days as of January 31, 2024.
Key Housing Metrics Explained
1. For Sale Inventory (January 31, 2024): The market boasts a healthy 1,272 homes for sale, indicating a diverse range of options for potential buyers.
2. New Listings (January 31, 2024): With 422 new listings, the market continues to see a steady influx of available properties.
3. Median Sale to List Ratio (December 31, 2023): The median sale to list ratio stands at a solid 1.000 as of December 31, 2023, suggesting a balanced and competitive market.
4. Median Sale Price (December 31, 2023): The median sale price is $231,000, indicating the prevailing value of homes in Kansas City.
5. Median List Price (January 31, 2024): As of January 31, 2024, the median list price is $216,667, showcasing the current listing values in the market.
6. Percent of Sales Over/Under List Price (December 31, 2023): Notably, 32.8% of sales surpass the list price, while 44.4% are under, portraying a varied market dynamic.
Kansas City MSA Housing Market Forecast
In terms of the Metropolitan Statistical Area (MSA) forecast, the data projects promising growth. As of January 31, 2024, the forecast for the Kansas City, MO MSA in Missouri anticipates a positive trend, with a forecasted increase of 0.3% by February 29, 2024, 1.7% by April 30, 2024, and a substantial 4.9% by January 31, 2025.
The Metropolitan Statistical Area (MSA) refers to a geographical region with a high degree of economic and social integration. In the context of Kansas City, MO, it encompasses various counties, forming a cohesive economic unit. The Kansas City MSA spans across multiple counties, fostering a diverse and expansive housing market. These counties collectively contribute to the economic and housing dynamics of the broader region.
With the MSA forecast indicating positive growth, the size of the housing market in Kansas City is significant. The diverse range of properties, coupled with the forecasted increases, suggests a robust and dynamic real estate landscape for both buyers and sellers.
Is Kansas City a Buyer's or Seller's Housing Market?
As of the current data and trends in the Kansas City housing market, it leans towards being a Seller's Market. The limited inventory of homes, coupled with the high demand, puts sellers in a favorable position. Buyers may encounter increased competition and potentially face challenges in finding suitable properties, making it crucial to act decisively in this competitive market.
Are Home Prices Dropping in Kansas City?
Contrary to a drop in home prices, the data suggests a steady increase in property values. As of the latest update, the average home value in Kansas City stands at $226,623, reflecting a notable 6.5% increase over the past year. This upward trajectory indicates a robust market where home values are appreciating, providing a favorable scenario for sellers and an opportunity for potential buyers to invest before further increases.
Will the Kansas City Housing Market Crash?
There is currently no indication of a housing market crash in Kansas City. The market exhibits stability and growth, with key metrics such as the median sale to list ratio, percent of sales over list price, and forecasted increases in the MSA all pointing towards a resilient real estate environment. While markets can evolve, the present data does not suggest any imminent crash, instilling confidence in both buyers and sellers.
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