KANSAS CITY, Mo. — Whether you are building or buying get ready to pay more for Kansas City-area homes.
It’s a case of supply and demand. More homes (3,200) sold last month, than are currently (3,000) on the market.
The average price of a home in Kansas City so far this year is $316,700. That’s an 11.6 percent increase since last year and double the price of homes a decade ago. And technically that price just went up.
“It’s easy to look at 11 percent and what inflation is doing and say wow housing is a lot more expensive, but really the interest rate is what’s most concerning for the cost of that housing. 5.15 percent makes that $317,000 home be significantly more over the case of 15-30 years,” Kansas City Regional Association of Realtors President Michael Pierce said.
Buying a house is a big decision.
“Most of the times in people’s lives it’s the biggest decision they’ll make ever,” Nick Leslie, managing broker at Engel & Volkers, said.
But buyers are being forced to scramble like never before. Realtors say it’s not uncommon to have dozens of offers on a house, going well over the list price. So buyers are having to get creative in submitting bids.
“When you are maxed out at a price and you are trying to bid against 15 other people that gets hard, lets cover those costs to get that seller to where they are going,” Leslie said.
If you need to be in a new house before next school year, you may want to start looking now.
“I think the expectation right now if you are a buyer in this market is there is a decent likelihood you could bid on 2,3,4 homes before you actually secure one,” Pierce said.
Because even though rising mortgage rates may price some people out of the market they aren’t expected to have a big effect.
“We are just seeing such a buyer demand right now it will take a substantial amount of time before we have an inventory number and buyer demand that presents a balanced market,” Pierce said.
Tommy Bickimer, President of the Kansas City Home Builder Association, says the competitive housing market has more people looking at building homes.
‘Yeah they know there may be some price increases along the way but at least they know they are going to get a house where in resale market they are just gambling and throwing out whatever they can to get a house,” Bickimer said.
Homes keep going up in Western Lenexa’s Timber Rock Development and around the rest of the Kansas City market, but not nearly fast enough to keep up with demand.
“The Kansas City home market continues to be hot we are severely underbuilt and the demand has never been higher than it is right now,” Bickimer said.
But it’s costing builders as much as ever to build, and in most cases taking longer than usual. Bickimer said after leveling off last summer, lumber prices are back up again as is everything else.
“Our prices have skyrocketed in the past 11 months that’s due to a real shortage of labor and every component that goes into building a house has gone up,” he said.
Builders are having to wait on framers and supplies, meaning houses that usually can be built in 6 or 7 months, are now quoted at 12-14 months.
Newly built homes make up a smaller portion of the market with 331 sales closed in March. Their average price is higher at $514,227.