It seems, in every city, there is a housing shortage even in Kansas City. According to Robert Smith of Valient News this is a typical story. “Just one month into Amanda and Andy Koukol’s quest to buy their first home, Kansas City’s housing market has left them frustrated and exhausted.”
“They’ve left work in a rush to see a house, only to learn on the way that someone else has already swooped in with a winning offer.”
“Twice they’ve put in bids for $12,000 and $14,000 more than the asking price and still didn’t get either house.”
“It’s not that the Koukols are too particular. While they rent a house in Prairie Village, they’re looking on both sides of the state line and don’t have an immediate concern about school districts.”
“But the three-bedroom, two-bathroom house they’re looking for is in high demand, and supply is unusually low.”
Data, distributed by The Associated Press, tracks housing inventory in the top 100 metro areas across the country.
There are 5 percent fewer homes on the market nationwide than a year ago. In Kansas City, the figure is nearly 14 percent.
All of the biggest metro areas in the region — Kansas City; St. Louis; Wichita; Omaha, Neb.; Oklahoma City; and Tulsa, Okla. — saw a decrease in housing inventory since 2012.
But Kansas City had the most significant decrease — 55.4 percent fewer homes available from 2012 to 2017, according to Trulia data.
Simple economics dictate that when high demand meets low supply, the result is a higher price for the product. Or simple economics should lead to builders building new houses to meet the demand. On top of that, we have the lowest interest rates in decades, and some think we are headed even lower. Perfect for buyers!
So how did Kansas City arrive at such a tight housing market?
Experts say it’s a combination of the metro area’s growth in the last seven years and a recession that drove home builders out of the market.
There are even homeowners who would otherwise consider selling their house balking at the possibility of then becoming a buyer and risking not being able to land a new home by the time they leave the old one.
Recently released census data show the Kansas City metro area has grown by nearly 100,000 people since 2010, which is also putting pressure on the housing market.
While permit activity has ramped up in recent years, last year’s total of 5,489 single-family homes indicates that the new construction market has not reached pre-recession levels.
There are structural issues as well; zoning and regulation costs, and development fees. Homebuilders also concentrate on higher-priced houses because the margins are higher on more expensive homes.
IMO, we need to try some new incentives to lure builders into building lower-priced houses — not “low-income housing,” but housing for the disappearing middle class. Surely we can produce affordable homes for them.
We buy and sell properties throughout the greater Kansas City area. We specialize in buying distressed homes, then renovating and reselling them to home buyers and landlords. Terra Firma Property Solutions: excited to be part of the economic rejuvenation of Kansas City and its surrounding areas.
Call us today at (816) 866.0566