The Kansas City Real Estate Market
When you work in real estate like I do people often ask, “how’s the market”? Well, there are a lot of ways to answer that question. In the broadest sense the US national housing market is quite good. And, not just, pretty-good-for-a-pandemic good, but, actually good. To over-simplify what is going on, basically a low supply is balancing out the market right now. This is true nation-wide and true in the market I work in, the Kansas City metropolitan area.
As I am writing this the first week of January 2021, inventory for homes in Kansas City is very low and houses are selling fast. Even though this is typically a seasonally slow part of the year, the Kansas City market is one that is affected by weather, houses are not staying on the Kansas City area market long.
Right now there are just under 3,100 active listings in the Kansas City housing market area covered by the Kansas City Regional Association of REALTORs. It is far more typical for that number to be over 5,000. In the popular sale price of $200,000 to $400,000 range there are just over 950 homes for sale. That’s not many for a metro area with a population of around 2.1 million. And, not to get too in to the weeds with what our regional association covers, but it is a geographical area larger than what the Census considers our metro area, so, those homes are spread even more thinly than the Census population would imply.
So, Is It A Good Time To Sell My Home?
Well, without knowing what type of home you have, what part of the metro area you are in and what your price point will be, the answer is probably yes. If your home is priced right, it is highly likely it will sell in the first 21 days it is on the market. Let’s take one segment of the neighborhoods in Kansas City metro area as an example, Johnson County. Currently there are just 90 single family homes for sale in the $200 – 400K housing prices range in Johnson County. In October of 2020 the sales of 591 single family homes closed in the $200 – 400K price point. In November it was 498. In December it was 483, and for December 12 of those closings were on the last day of the year. I don’t have enough space here to break down every part of the metro area, but the trends are similar everywhere. If you have questions about your area feel free to contact me for a market analysis for the area around your home. Unless your home is in a really inconvenient location (i.e. “hey I can see the highway from my front door, but I live 10 miles from the nearest on-ramp”), needs a major repair (i.e. it was struck by a tornado, while it was on fire, then a band of local ne’er-do-wells kicked the rubble) or has an inherent design flaw (i.e. the kitchen is on the third floor, and there is a bathroom smack in the middle of it) you can probably sell it. Home buyers will have their own opinion.
Well Then, It Is Probably A Bad Time to Buy Then, Isn’t It?
Well, that depends. If you have a life circumstance that requires you to move, say, you currently live in a one bedroom apartment, you and your spouse are expecting twins and you don’t want to rent again, then it is the right time to buy, for you. You can drive yourself crazy trying to time the market, the truth is no one knows when prices are at their lowest in the moment, it is only when we can look back can we see where the trough was. Prices are higher than they have been in the last 10 years, but, they could go higher still. Vaccines for COVID were just released, soon we will be on the down slope of a pandemic, it is hard to imagine the economy, and with it the housing market, not ascending as the pandemic subsides. So, if you want to buy a home, and you see one out there that you really, really like, and you’re qualified to buy it, then, this is a good time for you to buy a home. I would caution anyone who does not intend in staying in their home a long time to hold off until they know they are not going to have to move for at least 3 years though, even better if it is 5 or more years.
What About Real Estate Investors and Buying An Investment Property?
In this market, it is a lot like buying a home for yourself that you are going to live in, it might not be a bad time to buy a long-term real estate investment. Interest rates are low, so your debt service won’t eat into your cash flow. You maybe able to leverage equity you have gained in the ascending housing market in your own home to buy an investment property. If you are looking at multi-family properties,
there are projections that those could see market price drops around mid-year. But, this all depends on the property itself. Details on making investment properties work for you is a subject for another post, but without knowing what specific property you are asking about, in general terms, yes, there are real estate investment opportunities out there. Though, again, in general terms, there maybe one area where real estate investing could be more difficult than in the past, and that is house flipping. Make no mistake, there are always houses to be improved and sold for a profit, but, homes that need repairs (the ones historically best suited for flipping) aren’t discounted as much as they were in the past, inventory is low, so there isn’t as much competition from homes in better condition. Homes to be flipped are out there, but they are harder to find.
The real estate market is a big thing, if I were to classify it as either good or bad, I’d say it is good. However, for you specifically, it depends on what you want, what you need and where you are in life. This is where a consultation with a real estate agent can help a lot, if you want to see if now is the right time for you to buy, sell or invest give me a call.
Happy house hunting, we’ll see you next time.