According to the research of my friend Marco Santarelli of Norada Real Estate Investments, as of April 2020, “There is probably no hotter market right now than Kansas City, Missouri. A large, prosperous, self-sufficient, and culturally rich city, which has seen a continuous rise in its employment, directly impacting the local real estate. The Kansas City real estate market is very hot and in many ways the envy of housing pundits on both coasts.”
Mackaylee Beach at USREEB offers “The low cost of living and continuous revitalization efforts make it a popular spot to live and visit. I invest in Kansas City because I know it will remain a stable market.” What data can we produce to investigate both their statements?
Kansas City, Missouri, famous for its distinct barbeque cuisine and jazz heritage is now emerging as a growing market for real estate investments. High demand and low inventory are driving up both home prices and speed of home sales in the local housing market.
Home sales were up about seven percent and prices were up about six percent throughout the region in the previous year. Data from the Kansas City Regional Association of Realtors shows the average home price reached $229,306 in November 2019, a 4.6 percent increase over the average in November 2018. At the same time, the average days homes remained on the market dropped 4.8 percent to 40 days.
The home prices are expected to flatten nationwide, increasing by just 0.8 percent, according to Realtor.com. Kansas City properties have a track record of being one of the best long–term real estate investments in the U.S. The real estate appreciation rate in Kansas City in the latest quarter was around 2.7 percent, which equates to an annual appreciation rate of roughly between 10 to 12 percent. This can trigger a massive interest in the Kansas City real estate investment.
Even small changes in the appreciation rate can change the long-term value of buying considerably. For sellers, a nice profit is on the horizon. Let’s learn more about the factors that make Kansas City a good place to invest if you’re considering real estate investment. Real estate prices are deeply cyclical and much of it is dependent on factors you cannot control.
Please note that there are many variables that can potentially impact the value of a home in Kansas City (or any other market) and some of these variables are impossible to predict in advance. In this article, our focus will be on the current state of the Kansas City real estate market and how it can affect the investors and home buyers.
What Makes KC a target for investors?
- Turnkey Properties Starting at Only $90,000.
- Cash flows up to $650/mo.
- Population to grow to 2,200,000 by end of 2020.
- Median prices up 11.3 percent year-over-year.
- Cost of living 15.3 percent below U.S. average.
- Properties up to 10 percent below market.
- 3-year appreciation forecast of 9 percent.
- Average annual home appreciation rate of 3 percent.
- Median home value is $160,180 according to Zillow.
- 12 percent of listings had a price cut in Feb 2020.
- 3.9 percent 1-yr forecast till Feb 2021.
- Average days on market is 75.
Much of this information will be dated by the time you the reader are able to review. Being that the Global COVID Interrupt has had its way with our economy, some of these numbers can be different. One thing we do know is that trends tend to continue. Humans like to go back into their past like the old saying “History repeats itself.” Or the star high School quarterback never lacks for a story around the campfire. Knowing these things, we should expect KC to continue to be source of favorable real estate investment opportunity.
Sources: NoradaRealEstate.com, Kansas City Regional Association of Realtors, Realtor.com, Zillow
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