Homes are selling faster in the Kansas City area than in nearly any other American market.
National real estate listing site Zillow says houses in Kansas City, Columbus and Cincinnati are typically selling within three days of listing — half the national average of six days.
It’s just the latest sign of an ultra-hot real estate market that has made it difficult to purchase homes and easier than ever to sell them. Zillow calculated Kansas City’s typical home price at $244,048 in May, a nearly 16% increase over May 2020. That’s the largest year-over-year price appreciation tracked in Zillow’s data, which dates back to 1996.
Yet even as the market continues to speed up, experts see some signs of relief on the horizon. Inventory, which has been strained for months, is finally easing up, according to Zillow. May’s inventory of available homes was up nearly 12% over April, though it’s still down nearly 25% since last year.
Nationally, home inventory increased for the first time since July 2020.
“Despite extremely strong demand for homes in this red-hot market, a steady increase in new listings appears to have finally started turning the tides, bringing a long-anticipated turn toward more choices for buyers,” Treh Manhertz, a Zillow economist, said in a news release. “Builders are rushing to churn out new homes, while widespread vaccinations and improved confidence in the economy should help current owners feel more comfortable listing their homes for sale.”
While buyers may see more choices and reduced competition, it’s unclear if or when prices may start to level off. Zillow’s economists forecast U.S. home values to increase by nearly 15% by May of next year.
The real estate market has been humming for years now in Kansas City, where demand for homes far outstrips available inventory. That was the case before the coronavirus: In 2019, Kansas City home prices were rising faster than most U.S. cities, even boom towns like Denver, Nashville and Austin.
That only accelerated last year as the pandemic pushed many to reconsider what they want and need out of their homes. In Kansas City’s sellers’ market, buyers must be prepared to make quick decisions, compete with multiple offers and, in many cases, pay above list price to snag a home.
Data from the Kansas City Area Regional Association of Realtors show home prices surging as homes fly off the market. Across the region, the average sales price in May was $297,082 — up 24% over May 2019. That region stretches beyond just the metro area to include places such as Lawrence and St. Joseph.
With warmer temperatures, rising sale prices and the reopening of the economy, the association doesn’t expect to see a substantial change in local inventories.
“With such limited supply of existing homes to purchase, all eyes are on home builders to provide a much-needed boost of inventory to the market to help meet buyer demand,” according to the association’s May report. “However, increasing material and labor costs, along with supply chain challenges, have contributed to significantly higher construction costs, with builders passing these costs on to homebuyers.”