The Kansas City real estate market has been thriving the past several years. Are you curious if it will continue and at what pace? Here are some predictions for the housing market in this year’s Annual Wichita State “Out of This World” report. This report analyzes employment, inflation, mortgage rates and more to make predictions for the Kansas housing market in the coming year. The report, created by Dr. Stanley D. Longhofer, breaks down 2022 market forecasts for major metropolitan areas across the state of Kansas, including Kansas City.
“The story of the market is the historically low inventories,” Longhofer said. “At the end of September, there was just a 1.2 months’ supply of homes available for sale across the Kansas City area. As a result, home prices are rising at a remarkable pace. Increased new home construction activity should eventually help ease the supply pressures, but it may take several years before we return to a balanced market.”
His Forecast predicts sales in Kansas City will increase 5.9% in 2022 to 46,990 units. In the new constriction market, the report expects new single-family permitting activity to rise another 16.9% next year to 9,905 units, the highest level since 2005.
Longhofer also observes that Kansas City home values have been rising at their fastest pace since at least the late 1970s. The report expects strong appreciation to continue, rising 12.2% this year followed by another 9.2% increase in 2022.
“Zillow’s forecast calls for 11% home value growth in 2022. That’s down from a projected 19.5% in 2021, a record year-end pace of home value appreciation, but would rank among the strongest years Zillow has tracked. Existing home sales are predicted to total 6.35 million, compared to an estimated 6.12 million this year. That would be the highest number of home sales in any year since 2006.” Zillow (https://www.zillow.com/research/zillow-2022-housing-predictions-30394/)
- Mortgage rates may rise, but inventory may rise as well
“The market is likely to cool compared to 2021, but it will still be active… It may still be a seller’s market in many areas, but there’s likely to be more opportunities and wiggle room for homebuyers. A ‘priced out’ buyer should be able to find many more options. Experts also reinforce that 2022’s housing market is not at all likely to crash — the conditions we’re seeing are nothing like those that led up to the crisis of 2008.” Andrina Valdes (https://finance.yahoo.com/news/where-home-prices-headed-2022-200001201.html)
Nationwide, rent growth went from minimal to double-digit pace in 2021 as the U.S. made substantial progress against the pandemic. With the rental vacancy rate continuing near its historic lows during the pandemic, in which just 5.7% to 6.8% of rental housing units are vacant at any point in time compared to 7% or more, historically, renters are also contending with limited supply and excess demand that leads to upward pressure on rents. In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth as rents continue to rebound from slower growth earlier in the pandemic.” Realtor.com (https://www.realtor.com/research/2022-national-housing-forecast/)
Curious what your home would sell for in the current Kansas City market? Call or text my personal cell phone @ 913-707-2274 to set up a real estate needs assessment. We can meet in person, via zoom, or just chat on the phone. You can also contact us online here for advice – https://www.kchomehub.com/whats-my-home-worth. There is never an obligation or fee for consultations. I am here to serve!