Kansas City Market Overview

As we move through March 2025, the Kansas City residential real estate market continues to show resilience and growth. Home prices have increased by 5.9% year-over-year, significantly outperforming the national average of 3.9%. This points to the continued strength and desirability of our local market.

However, we are seeing some shifts in market dynamics. Sales volume has experienced a slight decline, with 2,071 homes closing and 2,499 pending in our local MLS. More notably, the average time on market has extended to 56 days – a figure that continues to climb as the market balances.

Current inventory stands at 6,185 homes available for sale. This represents a significant increase from the tight inventory conditions we've experienced in recent years, giving buyers more options and better negotiating power than they've had since before the pandemic.

Seller Strategies in Today's Market

For sellers, the increasing inventory and longer days on market mean that the days of listing at aspirational prices and receiving multiple offers within hours are largely behind us. Success in today's market requires:

• Strategic pricing: Many sellers are still anchored to peak pandemic-era prices, but today's buyers are more discerning. Competitive pricing from day one is crucial to avoid costly extended market time.
• Professional staging and presentation: With more options available, buyers can afford to be choosier. Properties that show well and make a strong first impression online and in person gain a significant advantage.
• Responsiveness to market feedback: If showing activity is low or feedback indicates pricing concerns, being quick to adjust can save thousands in carrying costs and eventual price reductions.

Opportunities for Buyers

For buyers, the current market presents the best conditions we've seen in several years:

• More selection: With inventory levels continuing to rise, buyers have more properties to consider and can afford to be more selective.
• Negotiating leverage: Sellers are increasingly willing to consider contingencies, concessions, and repairs that would have been dismissed during the height of the seller's market.
• Less competition: While desirable properties in prime locations still move quickly, the frenzied multiple-offer scenarios are less common, giving buyers time to make considered decisions.

Mortgage Rates and Affordability

Interest rates currently range between 6.5% and 7%, and while this is higher than the historic lows of 2020-2021, rates have stabilized after the rapid increases of previous years. Industry projections suggest potential modest rate reductions in the coming months.

It's worth noting that if you're considering waiting for rates to drop significantly before purchasing, you may want to reconsider this strategy. Here's why:

• Securing a 6.75% interest rate now may be more advantageous than waiting for rates to potentially drop to 5.75% in the future, as by that time, home prices could rise significantly, making the total cost of homeownership higher despite the lower rate.
• For those planning to stay in their home for 5 to 10 years or longer, the benefits of building equity sooner typically outweigh the temporary disadvantage of a slightly higher rate – especially considering you can always refinance if rates drop significantly.

Economic Factors Affecting the Market

Several economic factors are currently influencing our local housing market:

• Construction costs: Materials like lumber and concrete remain expensive, keeping new construction prices elevated and supporting resale values.
• Tariffs: Current tariffs on goods from Canada and China could increase home construction and renovation costs by $2,000 to $10,000, depending on the size and scope of the project. This affects both new construction affordability and the costs of significant renovations.
• Policy impacts: Current administration policies may affect interest rate trajectories. While lower rates would stimulate the housing market in the short term, they could also drive up prices, potentially making homes less affordable for first-time buyers despite the lower monthly payments.

The Long-Term Perspective

When considering real estate as an investment, it's essential to maintain a long-term perspective:

• Historically, both real estate and stock markets have shown consistent growth despite periodic downturns. Over the past 25 years, markets have corrected after every perceived crash.
• The "timing the market" concern becomes less critical when purchasing a home for personal use rather than pure investment. The primary benefits of homeownership – stability, building equity, tax advantages, and freedom to customize – remain regardless of short-term market fluctuations.
• Kansas City continues to offer strong value compared to coastal and other high-demand markets, with our job market, cultural amenities, and quality of life supporting long-term property appreciation.

Key Advice for 2025

Ready to Make Your Move?

Whether you're thinking of buying, selling, or just want a personalized assessment of how these market trends affect your specific situation, I'm here to help. Let's discuss your real estate goals for 2025!

Contact me today for a no-obligation consultation