2018 Kansas City Real Estate Investing Outlook

Hello All. Welcome to the New year.  Here is my 2018 Kansas City Real Estate Investing Outlook for both Sales and Property Management.

REAL ESTATE SALES: BUYING, SELLING, INVESTING

A Quick Look Back at 2017

Wow! What a year 2017 has been in the residential real estate world.  Here in the Kansas City area we’ve seen appreciation as high as 11% in Johnson County, KS and generally above 7% throughout the metropolitan area. It was not unusual for houses to be on the market less than 10 days if they were in good condition and priced right.

Looking Ahead in 2018 

Chris’ opinion about 2018?  It will closely follow 2017’s arch but it will be slightly more muted.  Listen, 11% appreciation is simply not sustainable in Kansas City over the long term. Housing affordability is becoming a worry even here in the middle of the country, interest rates are looking like they will tick up (though Chris has been thinking this for YEARS!) and until wages begin to catch up we will continue to decrease the amount of qualified first-time home buyers.

In conclusion, Chris thinks 2018 will be another great year for sellers, slightly better for buyers and another very good year to be a real estate agent.

PROPERTY MANAGEMENT

A Quick Look Back at 2017
The rental market continues to be very, very strong in Kansas.  However, on the Missouri side we began to see a slide in occupancy rates.

Kansas’ vacancy rates in Johnson County continue to hover at about 5%.  Missouri is creeping north of 8%. We have also noticed greater effort expended in finding the same standard of applicants as in the recent past.  This makes sense since so many of the buyers driving the sales side of the market are leaving the life of tenancy.

We have noticed that many of our tenants that experienced hardships in the Great Recession have rehabilitated their credit and are now buying.

Looking Ahead in 2018 
Tenants continue to rehab their credit and/or begin to look towards owning their own homes, especially in the Millennial Generation.  The nomadic life the Millennials have clung to is beginning to give way to the responsibilities of adult-hood and looking towards securing wealth and personal home ownership.

Chris won’t be surprised at all if vacancies continue their correction toward the historical number of 10%.  This will be a shock to the system of many investors who have entered the market since 2008.