The Year of the “Balanced” Real Estate Market
Realtors say 2019 is shaping up to be good for both sellers and buyers.
This is the year the Kansas City real estate market will get a chance to catch its breath. The market is still strong, with a 3 percent growth in housing prices predicted. However, it’s not the extreme seller’s market it was in 2018, which is a plus for buyers. Real estate agent Mindy Wetmore knows that firsthand. After carefully watching the market, she bought a home in Leawood at what she considers a great value. “We bought it from an older couple, and I think they were less about the price and more about having a younger family back in the home,” she says.
Overall sales in 2018 barely went up for existing homes, but new homes saw a 3 percent increase. The average sale price of $207,682 was up 6 percent for existing homes, and new homes saw an increase of 2.6 percent with an average price of $381,212. Realtor Sara Powell-Moody says the market is more complicated today than it was just two years ago. “Gone are the days of the 90-day flip,” she says. “You can’t find real estate cheap enough, and the days of selling a house the first second it’s listed are over with for now.”
Economist Chris Kuehl calls the real estate market simultaneously balanced and fragmented. “It’s balanced in that it’s not really a seller’s or buyer’s market and fragmented in that the market is extremely neighborhood driven,” Kuehl says. “You have areas that have been overbuilt where there’s a surplus of homes, and then in some neighborhoods there’s a shortage.” In 2018, existing homes inventory was down 3.5 percent. Kuehl says that shortage is partly caused by baby boomers living longer and aging in place. “We don’t have the turnover in homes like we used to.”
New construction, though, is still rock solid. In 2018, there was only a small drop, with single family permits down by 1.5 percent. From the far north to the south, home builders are busy. In Kearney, Missouri, realtor Rue Lovette says there is more new construction than resale. “I’ve been a realtor in Kearney since 1984, and I’ve never seen it like this,” she says. “I think the attraction is country living. You’re able to get some land with your home. Out here, you don’t reach out and touch your neighbor.” Thirty-eight miles to the south in Leawood, where there’s not a lot of land left for new construction, 72 single family homes starting at $700,000 are being built off Mission Road. Agent Danette Baker calls the response for the “Hills of Leawood” overwhelming.
2019 could be the year for the first-time home buyer. Tax changes will give newbies some extra cash, and the interest rates are projected to only go up slightly. A hurdle for this group, though, is debt. One in five potential home buyers say they aren’t buying a home because of their college loans, and 25 percent of young adults still live with their parents. Liberty realtor Michelle Ott says first-time buyers need to take their time and have realistic expectations. “I see many new home buyers get discouraged because they have an inflated view of what they can get for their money,” she says. Gladstone couple Joseph and Lauren Eikel say they looked for more than six months before finding a home. Lauren calls the process exhausting. “We were hard-core house hunting with our realtor for what seemed like forever,” she says. “It was time consuming and emotional but so worth it in the end.”