It will surprise no one that the last year has shaken the housing market. But, at least in Kansas City, the market may have done exactly the opposite of what you would expect.
From late 2020 through to mid-2021 Kansas City saw housing prices continually rise. This trend was easily explained by an increase in demand and a lack of supply, but shrewd observers would also take note of current mortgage rates which are currently nearing historic lows. This combination of factors saw houses snapped up incredibly quickly after listing, leaving many hopeful Kansas City home buyers left in the dust. Homebuyers ranged from regular citizens to big investment firms and even companies that specialize in getting home sellers cash for houses Kansas City as soon as possible. The latter group often closes deals in as little as two weeks, getting better rates in exchange for buying homes as-is and dealing with any issues themselves.
Fortunately, the winds have changed. As of this September, the market has begun to show signs of cooling. Or, at least, that’s what Kansas City Regional Association of Realtors’ president Tony Conant has claimed. This slow cool-off could be a result of various factors. One of the most convincing being a simple case of buyer fatigue, where hopeful buyers who have lost numerous bids have temporarily thrown in the towel with the hope to wait for a better time to buy.
To be fair to such disappointed buyers, they may certainly be onto something as 2021 has been a landmark year for the Kansas City real estate market. Compared with 2019 and 2020, not only have there been over 2000 more sales in 2021 so far, but the average sale price has jumped a whopping $50,000 while the average days a house is listed on the market has plummeted by half.
In the face of these staggering statistics, many hopeful buyers will be very pleased to hear of the coming cool-off. However, it’s worth remaining vigilant that we will not be seeing a sharp correction back to the market norms of the past two years.
This is because one key problem still stands: there remains more demand for housing in Kansas City than is available. While Kansas City is attempting to rectify the housing deficit through renovations and new developments, the lack of supply will not go away overnight. Not only this but in the wake of the pandemic Kansas City, along with a large portion of the world, is struggling with unemployment and eviction pressure which add much more pressing concerns for the local government to address.
As such, Tony Conant believes that we won’t be witnessing a return to a normal housing market for another two to five years. While that may be a tough pill to swallow for hopeful Kansas City home buyers, the current cool-off will most certainly provide a breath of fresh air from the chaotic market many have witnessed over the last year.
While none of us can be certain when the Kansas City real estate market will return to familiar grounds, this cool-off marks a turning point in what has been a historic spike in house prices. And for the countless individuals itching to purchase property in Kansas City, it most certainly brings back the hope of finding their perfect home.
Story by Steven Gallagher
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AFP
