The Kansas City property market, which precariously sits on the edge of both Missouri and Kansas, has earned a reputation for providing excellent investment options, inexpensive real estate, and high cash flow. However, the city’s ability to serve first-time homeowners may be even more crucial.
The demand for entry-level houses in Kansas City has grown significantly, in large part because of the city’s low median house price. First-time buyers are naturally lured to the home market in Kansas City, but demand could rise as a result of many notable signs. Due to the COVID-19 pandemic, the government has been forced to decrease borrowing rates to the point where potential buyers may find them affordable.
Despite the fact that COVID-19 was undesired, it has disturbed the Kansas City housing market to the point that it has provided opportunities for investors, sellers, and buyers alike. Here’s what you need to know about the property market in Kansas City and the four trends to look for in 2023.
4 Real Estate Market Trends to Look for in 2023 in Kansas City, MO
1. Appreciation rate
The aggregate appreciation rate over the past 10 years has been 91.9%, which is among the top 20% nationwide, as per NeighborhoodScout’s data. This translates to a 6.74% yearly average rate of housing appreciation in Kansas City. Kansas City’s appreciation rate over the past year, at 18.88%, has been at or slightly higher than the national average. The most recent quarter saw 6.35% growth in the real estate values in Kansas City, which works out to an annual growth rate of 27.91%.
2. Price trends
Currently, Kansas City housing prices are at their highest point in years, and even if there’s a little rise in the number of properties for sale, upward pressure is anticipated to persist into the next year. If no new properties are posted, the inventory might run out in just 0.9 months. High demand will support the housing market and maintain increased property prices.
Let’s examine the pricing patterns that Zillow has been tracking for the last few years. According to the Zillow Home Value Index, the average value of homes in the Kansas City metropolitan region has increased by about 102% since the turn of the decade (June 2012).
ZHVI reflects all available housing stock, not only those that are listed or sold during a particular month. Currently, properties inside the Kansas City metropolitan region are valued on average at $283,085. It shows that 50% of the area’s housing stock is valued at a lot more than $283,085 and 50% is valued at less (taking into account seasonal variations).
Due to the limited availability of properties in Kansas City, buyers are frequently driven to stay competitive, which leads to higher pricing and/or faster transactions, which normally favor sellers. This is known as a “sizzling hot seller’s market.” Based on the preceding month’s most relevant housing market metrics, there is more demand than there is supply, favoring sellers in price discussions over buyers. More houses are under contract than there are buyers who are actively looking.
Short-term property price forecast for the upcoming months and 2023 for Kansas’s housing market
3. The housing market
One of the cheapest home markets in the country is in Kansas City. It is among the most popular real estate markets for investing in reasonably priced rental properties. According to the FHFA, all-transactions housing price index (2021 Q4), house prices in Kansas City, MO-KS increased 2.7% over the previous quarter and 13.7% over the previous year. Since 2007, the house price index has changed by a total of 73.4%.
4. Home values
According to the FHFA HPI® Top 100 Metro Region Rankings, the Kansas City metro area is now ranked 68. The average change in house values over time in a market is measured by the FHFA housing price index. The 15-county Kansas City metropolitan region, which includes both Missouri and Kansas, is completely covered by the index for the Kansas City MSA.
- Over the previous year, property prices in Kansas City increased by 16.5% (now $226,426), and they will keep increasing over the coming 12 months
- By the end of July 2022, the Zillow Home Value Forecast predicts a 4% increase
- Jackson County has an average house value of $223,307, which is up 16.0% from the previous year
- Home prices in the Kansas City Metro area have increased by 16.2% in the last year, and according to Zillow, they will increase by 10% in the next year through the end of April 2023.
The Kansas City Real Estate Market
The property market in Kansas City is booming and is, in many respects, the envy of housing analysts on both coasts. The COVID epidemic has resulted in high unemployment and decreased customer confidence in purchasing and selling real estate, yet Kansas City house values are still on the rise. Kansas City now ranks as the fourth fastest growing city in the metro region in terms of rent growth, up 2.0%.
According to the most recent information from the (Kansas City Regional Association of REALTORS®), the residential property market in the Greater Kansas City area remained robust last month. The main cause of the price increases is the scarcity of inventories within the metro region. However, Kansas City’s property market is solid for sellers, as evidenced by the fact that there is only a 0.9-month supply of available properties for sale.
High demand and low supply led to an increase in market prices in Q1 of 2022, continuing a pattern. There is still a sizable gap between supply and demand in the Kansas City, Missouri, real estate market. As long as there is a shortage of properties for sale and interest rates are close to historic lows, the market will stay hot.
While there were fewer sales (7.6% fewer) than in April of the previous year, the average transaction price jumped by 13.1% to $333,681. Houses are selling for much higher than the sellers’ asking prices, as shown by the fact that they took an average of 21 days to sell and brought in only 103.5 % of their initial asking prices. Prior to the coronavirus, the Kansas City housing market was already very competitive, with housing prices there increasing more quickly than in most other American cities.
Endnote
If you want to earn some profit, you shouldn’t expect to make more by renting out the most costly home in the Kansas City property market. Maybe you’re searching for a varying holdover, a Kansas City investment home that you may live in now or sell after you retire. In any case, the first thing to consider is your anticipated profit.
At Faithful Homebuyers KC, we offer a reasonable cash price for properties anywhere in Missouri, encompassing Kansas City and the surrounding areas. We also work as traditional agents, and because of our in-depth understanding of the Kansas City property market, we constantly assist homeowners in obtaining top dollar for their properties. Regardless of the condition of your house, we can offer you an all-cash deal and close with no charges in as little as seven days. Why not give us a call today?