Current Real Estate Market Trends in Kansas City

KANSAS CITY, MO (STL.News) Real estate is historically a favorite among long term investment choices during recessions.  This trend continues now as real estate continues to rank as the top investment pick for the majority of Americans (35%), ahead of stocks and bonds (21%), savings accounts (17%) and gold (16%).

The recent pandemic restrictions have made us all a lot more familiar with our homes.  This newfound interest in real estate has also surfaced a number of questions about the future of real estate owned.

While global markets were thrown into turmoil in the early days of the outbreak, the property market, broadly speaking, has remained resilient.  As of April 2020, the median U.S. house price rose 8% year on year to hit $280,600.

Buying a home is often seen as one of the most important and prudent financial investments you can make.  Notwithstanding challenges with in-person viewings, now may be the time to think about buying a home as cities and states have begun to reopen to business.

With the Fed’s recent slashing of interest rates in a bid to stimulate global economies, the cost of borrowing has become historically very inexpensive.  This makes mortgages more affordable for those with adequate credit.  The same is true for those looking to refinance a current mortgage.  This flexibility will encourage more people to consider the real estate market.

Patty Farr of Platte City stated that her real estate agency is seeing a pick up in activity the past few weeks.  She is hopeful that this increase in business continues as the state reopens.  She also indicates they have taken on many new listings the past few weeks and are receiving increased inquiries from potential buyers.

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Patty Farr is the lead broker and owner of Re/Max House of Dreams in greater Kansas City.  Farr’s business is a relevant benchmark as she has been ranked the top Re/Max Real Estate agent in Missouri in 7 of the past 10 years.  Her office has been in Platte City and Smithville for about 15 years and they now have 16 real estate agents.

That said, the pandemic has brought a great deal of uncertainty. It’s important to look into the marketplace of the city in which you’re looking to buy.  For instance, real estate prices and new home construction in Kansas City has already begun to rebound.

The Home Builders Association of Greater Kansas City (HCHBA) said the industry was “disrupted” in March, but local Kansas City data in April 2020 appeared to remain strong.

Although residential activity has been somewhat stable, there is no question that the pandemic has been hitting the commercial sector the hardest.  Commercial real estate, which encompasses the hard-hit hotel and retail sectors, potentially poses the biggest risk for investors.  So far this year, the commercial real estate market has fallen almost 28%, with hotels & resorts and retail spaces down 48% and 40%, respectively.  This business drop-off will take significant time to correct.  The commercial real estate recovery is likely to be more “gradual” than “V-shaped” as economies embark on phased re-openings.  However, business volatility can be seen as an opportunity for investors with a higher appetite for risk.

Sectors demonstrating strong fundamentals include some industrial, residential and specialized real estate.  These sectors are showing particular signs of resilience.  Although there have been times of uncertainty, the recovery could rebound more quickly than expected.  Real estate can become more balanced once Missouri reopens and the “shelter in place” orders are lifted.  Once open, the pent up demand for real estate should help the economy rebound quickly.

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Patty Farr on STL.News Business Listing