The steady rise in home prices that defined the housing market in 2021 looks to continue steadily into next year across Kansas, according to a new report forecasting the statewide housing market.
The Wichita State University Center for Real Estate released its annual Kansas Housing Market Forecast Series report for 2022 Wednesday. The study projects statewide home sales increasing, construction will remain constrained by supply chain issues and home prices will continue to rise.
“The supply of homes available for sale remains near historic lows,” Stan Longhofer, director of the WSU Center for Real Estate said in a release. “Although bidding wars may not be as intense as they were earlier this year, it will continue to be a sellers’ market across most market segments.”
The average price of a home in Kansas has increased at a steady clip since 2017 from $198,826 that year to $236,942 in 2020. That rate of increase will likely continue to rise, with the report estimating price appreciation of more than 10% in 2022. That home price inflation will likely be hotter in the Kansas City area, but cooler in smaller cities such as Topeka and Manhattan.
Similar research from Zillow shows a growing divide between urban and suburban markets. Urban markets are seeing prices climb at a much quicker clip. The trend was particularly pronounced in Kansas City.
“Home sales activity continues to increase in spite of the really tight inventories,” Longhofer said. “I sometimes joke with realtors when I see them: ‘Where are you finding the homes to sell?’ … There’s just nothing that’s available on the market.”
The low inventories are a result of a years-long lull in home building, something that has occurred nationwide. Longhofer said that rising prices, combined with an increase in home building, will eventually cause prices to fall by both correcting the supply and demand sides of the equation.
“Instead, what we will see is that we will slow down to a more typical pace of home price appreciation,” Longhofer said.
Most of the new construction in the state has been in the Kansas City area. New permits hitting levels not seen since 2005, with a 16.9% increase to nearly 10,000 new single-family units.
Home building is also strong in the Manhattan-Junction City area and in Wichita. Still, construction is hampered by global supply chain delays that are not likely to resolve anytime soon.
Despite being a sellers’ market, Longhofer said that buyers may find better prices in some markets.
“Just because we’re seeing rapid appreciation broadly across the state,” Longhofer said, “it doesn’t mean it’s happening in your particular house or the neighborhood that you’re in.”
Detailed forecasts for several Kansas sub-markets are available at The WSU Center for Real Estate’s website.
