The Kansas City housing market is hot and in many ways the envy of housing pundits on both coasts. Home price growth is slowing, but the supply of housing still remains low (less than two months). The residential housing market across the Greater Kanzas City Region remained strong last month according to the latest data from the Kansas City Regional Association of REALTORS® (KCRAR). In October 2022, the average sale price increased by 9.8% to $339,575 while the number of sales was down 23.9% from last year.
Homes sold in an average of 28 days and for 98.1 percent of their initial asking prices indicating that homes are selling for more than the sellers’ asking prices. The Kansas City real estate market was already competitive before the coronavirus, with Kansas City home prices rising faster than most U.S. cities.
A lack of inventory across the metropolitan area is the biggest driver of the rising prices. In Kansas City, there are only about 1.7 months of supply of available homes for sale — which is an indicator of Kansas City being a strong seller’s real estate market. In the real estate market in and around Kansas City, Missouri, there is still significantly more demand than there is supply. The market will continue to be hot as long as the supply of available homes for sale remains low and mortgage rates remain near historic lows.
Kansas State Housing Market Trends
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. “While demand has slowed in recent months, tight inventories remain a problem,” said Kansas Association of REALTORS® president Andrew Mall with Link Realty in Prairie Village. “At the end of September, there were half as many homes available for sale as there were at the same time back in 2019.”
September 2022 Kansas Market Highlights
- Home sales in Kansas fell by 16.1% in September 2022 compared to the same period last year.
- National sales fell with sales falling 23.8% over 2021.
- Home prices continue to increase across the state.
- The statewide average sale price in September was $283,509 an 8.2% increase compared to last year.
- Midwest prices rose 6.9% and US prices rose 8.4%.
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
According to Redfin, home prices in Missouri were up 7.3% year-over-year in September. At the same time, the number of homes sold fell 7.3% and the number of homes for sale fell 0.84%. Homes in Missouri were selling for a median price of $243,700. On average, the number of homes sold was down 7.3% year over year and there were 8,050 homes sold in September this year, down from 8,671 homes sold in September last year. The median days on the market was 22 days, down 4 days year over year. The average months of supply is 2 months, flat year over year.
The Top 5 Metros in the Missouri Housing Market which have the Fastest Growing Sales Price:
- Lemay, MO (+33%)
- Cape Girardeau, MO (+32.4%)
- Parkville, MO (+28%)
- Maryland Heights, MO (+25.6%)
- Waynesville, MO (+23.7%)
Missouri REALTORS® Market Statistics is a monthly statistics report produced by Missouri REALTORS® which includes a statewide video and market summary.
Missouri Year-to-date Figures
- The Median Residential Property Selling Price (YTD) was 240,000, up 10.9% year-over-year.
- The number of Listings from Reporting MLSs was 10,338 in September 2022.
- The number of Residential Properties Sold (YTD) was 65,245, down -9.5% year-over-year.
Missouri Year-to-Year Detail Comparison – September 2022
- The Number of Homes Sold was 7,609, down 15.6% year-over-year.
- The Number of Days on the Market was 30, down 20% year-over-year.
- The Average Selling Price was $287,227, up 8.1% year-over-year.
- The Median Selling Price was $243,000, up 8.0% year-over-year.
- The Monthly Dollar Volume was $2,185,507,628, down 8.8% year-over-year.
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 2022 as reported by the Kansas City Regional Association of Realtors (KCRAR).
- In the Greater Kansas City housing market, the average sales price is up +9.8% to $339,575.
- Home sales in the Kansas City area totaled 3051 units in October, down 23.9 percent from the same month in 2021.
- Pending sales were also down by 30.1% to 2770 properties being under contract.
- Homes that sold in October were on the market for an average of 28 days and sold for 98.1 percent of their original asking prices.
- The number of active listings increased by 17% year-over-year, which makes the supply equal to 1.7 months (up 30.8% 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 2022 and 2033
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 2022 & 2023? Based on the FHFA all-transactions home price index (2022 Q2), in Kansas City, MO-KS, house prices rose 14.9% over the past year and rose 2.5% over the last quarter. The cumulative change in the home price index since 2007 is 89.6%.
The Kansas City metro area ranks 62 in FHFA HPI® Top 100 Metro Area Rankings based on the 2022 Q2 home price index. The FHFA home price index measures the average change in home values within a market over time. The index for the Kansas City MSA covers all of the fifteen-county Kansas City metropolitan area, spanning both Kansas and Missouri.
- According to NeighborhoodScout’s data, the cumulative appreciation rate in Kansas City over the ten years has been 95.50%.
- This equates to an annual average Kansas City house appreciation rate of 6.93%.
- Kansas City ranks in the top 30% nationwide.
- During the twelve months, from 2021 Q2 – 2022 Q2, Kansas City’s appreciation rate was at 12.30%.
- Kansas City real estate appreciation rate in the quarter, from 2022 Q1 – 2022 Q2, was at 4.00%, which equates to an annual appreciation rate of 17.01%.
Since the last twelve months, the typical home value in Kansas City metro has appreciated by nearly 11.3% — Zillow Home Value Index. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in the Kansas City metro is currently $289,729. It indicates that 50 percent of all housing stock in the area is worth more than $289,729 and 50 percent is worth less (adjusting for seasonal fluctuations).
Kansas City has been a seller’s real estate market, which means that there exists a limited supply of homes in Kansas City, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, based on the last month’s key housing market indicators, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace.
As of now Kansas City home prices have reached the highest level in years and upward pressure is expected to continue into the next year even if there is a marginal increase in homes for sale. The inventory can dwindle in 1.7 months if no new homes are listed. High demand will bolster the home-buying market and continue pushing up home price growth even when mortgage rates have topped 7%.
- Kansas City Metro home values have gone up 11.3% over the past year.
- Zillow predicts they will rise by 2% between October 2022 to October 2023.
These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Kansas City can become a buyer’s real estate market if the supply increases to more than five months of inventory. As of now, Kansas City real estate market remains strong and skewed to sellers, due to a persistent imbalance in supply and demand.
For buyers in Kansas City Area: Interest rates have made many people consider buying during the pandemic but they are rising now. FreddieMac reported the average 30-year fixed mortgage rate was 6.90% in October 2022. The challenge for buyers will be getting qualified for a loan as well as bearing the burden of higher EMI.
For sellers in Kansas City Area: As there are less than two months of supply of properties for sale at a given time, this has created a market that greatly favors sellers. It’s a good time to sell a home. In conclusion, we can say that it is a strong seller’s market seen by far, and won’t be any major dip in home values for the foreseeable future. The tight Kansas City real estate market here mirrors wider national housing market trends.
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 in 2023. 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.
- The average home price is up 9.8% year-over-year (Oct 2022).
- 1-year appreciation forecast of 2% (ZHVI).
- #62 in the U.S. out of the top 100 MSAs – FHFA.
- The cumulative change in the FHFA home price index since 2007 is 73.4%.
Rents are also growing in Kansas City. As of November 6, 2022, the average rent for a 1-bedroom apartment in Kansas City, KS is $875. This is a 10% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Kansas City remained flat. The average rent for a 1-bedroom apartment increased by 3% to $875, and the average rent for a 2-bedroom apartment increased by 6% to $1,063.
- The average rent for a 2-bedroom apartment in Kansas City, MO is $1,150. This is a 2% decrease compared to the previous year.
- The average rent for a 3-bedroom apartment in Kansas City, MO is $1,458. This is a 2% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Kansas City, MO is $1,613. This is a 5% decrease compared to the previous year.
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
The BLS reported that the unemployment rate for Kansas City fell 0.1 percentage points in September 2022 to 2.6%. For the same month, the metro unemployment rate was 0.2 percentage points higher than the Missouri rate. The unemployment rate in Kansas City peaked in April 2020 at 12.2% and is now 9.6 percentage points lower. You can also compare Kansas City’s unemployment with unemployment in other cities.
Keeping aside the impact of the recent pandemic, Kansas City has seen a continuous rise in employment prospects over the last 2 years, a trend that directly impacts the Kansas City real estate market. From 2017 to 2018, the city registered a remarkable 1.9% in terms of overall employment.
This could be further broken down to 3.8% in professional and business services, 3% in terms of government-sponsored employment opportunities, and 1.9% in the trading, transport, and utility sectors. Recent job growth is positive. Kansas City jobs have increased by 1.4%. For the past 20 years, the big growth has been on the Kansas side to the southwest in suburbs like Overland Park, Lenexa, and Shawnee.
The Growth in Kansas City
The national average growth in cities is 4.45%. In Kansas City, in 2010, it was higher than 4.5%. It’s growing at the national rate and is expected to grow even faster in the next few years. Between the years 2013-2015, the annual growth was 15,000 then raised to 20,000 between 2015-2016. Kansas City is home to some of the biggest companies, such as H&R Block, Sprint, Hallmark, and BNSF, to help to fuel the attraction of the Kansas City real estate market.
Kansas City is a great attraction for tourists, especially art lovers. Housed by several museums and art destinations, the city is famous for its Jazz Museum as well as the Nelson-Atkins Museum of Art which boasts over 40,000 works of art, vintage antiques, and contemporary works. The influx of tourists into the city has a direct relationship with the growth of the city’s real estate market.
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
- Columbus Park
- River Market
- 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
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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!
Caveat emptor applies everywhere you buy property. Some of this article’s information came from referenced websites. Norada Real Estate Investments makes no express or implied representations, warranties, or guarantees that the information is accurate, reliable, or current. All information should be verified using the below references. Norada Real Estate Investments does not predict the future US housing market.