The housing market in Kansas City is intense, with high prices and limited availability, which casts doubt on the city’s reputation for affordability. Record low interest rates and growing demand across the country are being met by depleting stocks. The result is a spike in prices and home sales in a matter of days.
According to the Kansas City Regional Association of Realtors, the average price in May 2021 for an existing home in the KC area was $ 255,000, up about nineteen percent from the same period last year. The number of available properties has decreased by fifty-three percent compared to 2020.
how did we get here? And if you are thinking about going to market, what should you know? We asked some of the city’s most knowledgeable real estate agents.
Covid did not cause the crisis, but only made it worse… “It has always been a seller’s market,” says Sarah Montgomery, lead buyer specialist at Dani Beyer Real Estate. “However, it has definitely intensified.” As people spent more time at home during the pandemic, they realized the need for more space and a comfortable home, according to Sharon Barry, junior broker at Reece Nichols. And since the Federal Reserve cut interest rates to near zero in the early days of the pandemic, there is a stronger incentive for potential owners to enter now.
It won’t end soon, but it probably isn’t a bubble… Despite the alarming rise in prices, domestic experts do not expect a collapse. As prices continue to rise due to lack of inventory, demand should decline. But it won’t happen overnight. “I don’t see much change on the buyer’s side in the next two years,” said Trent Gallagher, realtor at Compass Realty Group.
Don’t expect a huge increase in inventory… High lumber prices shouldn’t slow construction down, Montgomery said, but that’s one reason new homes are so expensive. The average price of a new home on the KC subway jumped almost 21% year-over-year to $ 439,425. In 2021, the metro has already issued almost twice as many building permits as last year, but construction takes time.
When the federal moratorium expires on July 31 and foreclosures rise sharply, more existing homes could enter the market. But Gallagher doesn’t expect this to have a strong impact. “With this high customer demand, they will all be satisfied, and we will still be back where we are now,” says Gallagher.
It might be better to stay in the market… It sounds risky, but the future may be more risky. Interest rates won’t stay low forever. “I believe the market will continue to grow and now is a great time to shop,” says Gallagher.
Buyers have limited leverage options.… Cash shoppers tend to go to the top of the list, Barry says, but for many, that’s not a realistic option. She believes that good credit and a large down payment can help. Some people throw dice when they refuse inspections, but Montgomery advises against doing so “unless they have a convincing preliminary report from a reputable inspector,” she says.
Montgomery believes that the best advantage is finding the perfect agent. “Feel free to buy agents and make sure they are right for you,” she says. It can be stressful, but a friendly and knowledgeable person can help you deal with it.