What they are not telling you about the kansas city real estate market this year.
“Notice how the news only tells you the bad stuff? Bet you haven’t been told about the changes that happened to the real estate market this month!”
2023: A Year of Predictable Surprises
Navigating the real estate market can be challenging especially when the news only reports the negative, ignoring good news. You might find yourself paralyzed. As we move into 2024, understanding the shifts and trends of the previous year is crucial for making informed decisions.
The year 2023 in Kansas City’s real estate market was a mix of anticipation and unpredictability. Following the Federal Reserve’s interest rate hikes in 2022, there was widespread speculation about a possible market downturn. Buyers, wary of an impending crash, adopted a wait-and-see approach, hoping for price reductions. Meanwhile, sellers preferred to hold onto their properties, benefiting from the existing low-interest rates on their mortgages.
As the year progressed, this cautious stance began to shift. By April, the market started showing signs of resilience. Contrary to expectations, prices began to rise, and interest rates continued their upward trajectory. Despite the Federal Reserve implementing 11 rate hikes throughout the year, the market’s backbone remained unshaken. Housing affordability became the year’s buzzword, as people grappled with the dual challenges of higher purchase prices and increased financing costs. For those opting out of buying, rental prices provided no respite, as they too climbed alongside the housing market.
Kansas City’s Rising Popularity
Last year also marked a significant growth phase for Kansas City, dubbed the “Paris of the Plains.” The city’s sports teams celebrated major victories, bringing home titles in various championships. Significant events like the NFL draft put the city in the national spotlight. The celebrity buzz, including high-profile figures like Taylor Swift and Travis Kelce investing in local properties, added to the city’s allure. This burgeoning popularity significantly influenced housing demand, prices, and availability.
2024 Outlook: Anticipating Opportunities
As we look ahead, several key factors are shaping the 2024 real estate landscape in Kansas City:
Mortgage Rates: The Federal Reserve’s announcement in late 2023 to halt rate hikes and predict rate decreases this year has positively influenced the economy. This shift signals more favorable borrowing conditions for potential homebuyers.
Housing Demand: The city’s ongoing growth, bolstered by the increasing trend of remote work, continues to fuel a strong demand for housing.
Low Inventory: The scarcity of available homes, particularly in the single-family and luxury apartment segments, remains a challenge.
Price Appreciation: The combination of high demand and low inventory points toward continued price appreciation, albeit at a more moderate pace than before.
Advice for Buyers in 2024
As you consider your real estate options in 2024, here are some strategies to navigate the Kansas City market:
Act Early: With mortgage rates currently on a downward trajectory and home prices expected to climb, starting your home search early in the year could be advantageous.
Explore New Constructions: The current market conditions present unique opportunities, particularly in new construction. Builders are more open to negotiations, potentially offering better deals and customization options.
Monitor Mortgage Rates: Stay informed about the changing mortgage rates. A further drop in rates could provide an opportunity for refinancing, potentially leading to significant savings on mortgage payments.
In-Depth Market Analysis
To truly grasp the essence of Kansas City’s real estate dynamics, a deeper dive into various market segments is essential. The luxury apartment market, for instance, is witnessing a construction boom, with developers keen on capitalizing on the increasing demand. Single-family homes, a perennial favorite, are seeing a steady rise in both demand and pricing, making them a solid investment choice.
Community and Lifestyle Factors
Kansas City’s appeal isn’t just about numbers and market trends. The city’s vibrant culture, growing culinary scene, and expanding entertainment options make it an attractive destination for families and professionals alike. The quality of life here, combined with relatively affordable living costs compared to coastal cities, adds to its attractiveness.
Conclusion
As we venture into 2024, Kansas City’s real estate market is moving from a period of rapid growth to a more balanced phase. While mortgage rates are expected to fall, potentially to around 5.5%, the combination of increased demand and limited inventory is likely to push prices upward. In this market, timing and informed decision-making are key. Whether you choose to buy early or wait for the right moment, staying informed and proactive is essential.
Your Questions Answered:
Q1: Will mortgage rates continue to decrease in 2024?
A1: It’s predicted that rates may fall as low as 5.5%. Keep in mind as rates fall, demand will increase and prices will likely increase with demand. Think about buying early and refinancing when rates fall more than 1%.
Q2: Is now a good time to buy property in Kansas City?
A2: Yes, early 2024 presents a unique opportunity with lower mortgage rates and before the anticipated price rise.
Q3: What should I consider when buying a new construction home?
A3: Look for negotiation opportunities. We can help find builders that are motivated to sell inventory but act quickly as inventory might tighten as buyers re-enter the market.
Q4: How has Kansas City’s growth affected the real estate market?
A4: Increased demand and popularity have led to higher prices and competition, yet Kansas City remains relatively affordable compared to other major markets.
Q5: Is it better to buy now or wait in the current market?
A5: Considering the potential for rising prices, buying early could be advantageous. Experts predict prices to increase for the next few years due to low inventory and a shortage of housing and demand builders are not on track to meet, especially below the $500k price point in Kansas City. Homes below $500k are going to be considered to be more scarce.
