Kansas City’s high demand, record-low interest rates, and shrinking inventory make things difficult for first-time buyers trying to buy a home in the Kansas City metro area. Homes priced between $200,000 and $300,000 — the usual budget for first-time buyers — are flying off the market.
Besides low inventory, there are also investors offering fast, all-cash offers for houses in that price range. Sometimes the buyer will have to compete with a home buying company coming with an all-cash offer. The competition, combined with a shortage of homes, has made it hard for buyers to get their first home.
Despite the coronavirus pandemic causing wage cuts, unemployment, and impaired consumer confidence in real estate buying and selling, the Kansas City housing prices rise.
According to the FHFA all-transactions home price index, typical home values in the Kansas City metropolitan area increased by 4.8% in the second quarter of 2020, compared to the same period in 2019.
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What Happened and Why?
In the Spring of 2020, amid the Coronavirus pandemic, many homeowners pull their plans of listing their properties as they decide to wait for safer and more stable times. According to the Kansas City Regional Association of Realtors (KCRAR), the number of new listings in the metro area dropped 30% compared to the same period in 2019.
In the summer of 2020, record-low mortgage rates allowed the recovery of the Kansas City housing market. Interest rates below 3.3 percent encouraged Kansas City buyers to return to the housing market. Sellers, instead, were a bit more reluctant to list their homes. And, with buyers outnumbering sellers, prices started to go up.
Optimistic Predictions for 2021
Although the pandemic has reshaped Kansas City real estate market, experts are optimistic it will recover — and become more balanced — in the second half of 2021. Here are some top reasons to expect an increase in inventory this new year:
- As more people get vaccinated against Coronavirus, more homeowners are likely to feel more comfortable listing their homes.
- New construction projects are expected to hit the market and decrease competition.
- Some buyers may also change their price points.
According to the Kansas City Area, Regional Association of Realtors, home prices are rapidly increasing as homes fly off the market. Kansa’sIn July, City average sales price was $267,569 — up more than 10% over the same period in 2019.
For buyers in Kansas City Area
Since the real estate market is very competitive at the moment, your best shot is to find the right listing and make a serious offer above the selling price on the first day it hits the market. With the mortgage rate so low, your biggest challenge will be getting qualified for a loan. For house hunters who have recently lost their job, it’s going to be harder to get approved.
For sellers in Kansas City Area
Kansas City’s shortage of homes makes it a strong seller’s market. If you were thinking of selling your home soon, now might be the best time to do it before new construction properties and other sellers hit the market and decrease prices. “We buy houses in Kansas City” companies provide immense selling opportunities for owners wanting fair, all-cash offers for their homes.
Kansas City Real Estate: What To Expect in 2021
At this time last year, experts were foreseeing the 2020 housing market would see relatively flat home price growth, tight housing inventory for first-time buyers, and a rise in mortgage rates.
We all now know what happened next: The Coronavirus pandemic.
Although there was an initial pause for homebuyers spring as no sellers were willing to their properties, and no one was thinking about moving, the housing market ended up even hotter than ever. Demand outpaced inventory, leading to an increase in home prices in nearly every state.
While 2020 was an example of how rapidly the economy can change, the housing market has adapted to the “new normal.” The trends we’ve seen over 2020, along with the availability of a COVID-19 vaccine, provides data points for making predictions for the 2021 real estate market. Here’s what Kansas City home sellers and buyers can expect going into 2021:
What To Expect in 2021
- Home values and prices are expected to increase until September, where experts foresee slower economic growth, resulting in lower asking prices.
- A possible wave of foreclosures could also happen in Summertime, and this could flatten price growth.
- With the creation of the COVID-19 vaccine, more homeowners are likely to feel more comfortable listing their homes. Owners who delayed their selling plans in spring 2020 for spring 2021 could increase inventory and lower competition.
- The Coronavirus pandemic slowed down new housing developments last year. In the second half of 2021, there will likely be a surge of new construction projects.
The Remote Workplace Might be Here to Stay
The pandemic has forced everyone to stay at home for more extended periods. Having our homes serve as our office, school, and recreation setting has made many households reconsider their demands. Now that home office is a must; many prospective buyers will be looking for these features while on their house search.
What to Do About It
No one knows what the future holds. However, being on top of the real estate market trends and predictions can help you plan your next purchase or home sale.
For buyers in Kansas City Area
Kansas City’s strong price appreciation will continue this year— but not quite as fast as it was in 2020. If you want to purchase your first home soon, you will probably have to make an offer above the selling price to get a listing.
Since the market is very competitive, you can also wait and see if prices decrease in 2021. You may have more options and less competition in the second half of the year.
For sellers in Kansas City Area
If you want to sell your house fast in Kansas, trends are pointing to listing as soon as you can before other sellers and constructions hit the market in 2021.
Take into account that the remote workforce has changed the housing needs of many potential buyers. So, if you are considering selling your home, you might want to stage or adapt rooms to appeal to these relatively new demands.