According to the recently published 2024 Kansas Housing Markets Forecast series by the Wichita State University Center for Real Estate, home values in Kansas are expected to continue appreciating in the coming year. Despite a softening of demand due to higher mortgage rates, the limited inventory of homes available for sale is favoring sellers in the market.
Dr. Stan Longhofer, director of the WSU Center for Real Estate, states that the shortage of inventory is constraining home sales activity across Kansas. Sales are projected to decline by 12.4% this year, ending at 35,640 units. However, sales are expected to remain essentially flat in 2024. Similarly, new single-family building permits in Kansas are expected to drop by 18.4% this year, but rebound by 4% in 2024 if mortgage rates fall as expected.
Despite weaker demand, the tight inventory continues to put upward pressure on home prices in Kansas. Home prices are projected to increase by 5.5% this year and another 3.5% in 2024. This trend is consistent across major markets in the state.
In the Kansas City area, total home sales are expected to decline by 16.2% this year due to tight inventories and higher mortgage rates. However, home prices in the Kansas City metro are projected to rise by 6.6% in 2023 and another 3.7% in 2024.
In Lawrence and Manhattan, tight inventories also limit the market. Lawrence is expected to see a 12.7% decline in home sales this year, while Manhattan home sales are projected to fall by 7.7%. However, both areas are expected to see a modest increase in home prices in the coming years.
Topeka and Wichita are experiencing weaker demand and limited inventories, resulting in a decrease in home sales activity. Topeka home sales are expected to fall by 8.4% this year, while Wichita home sales are projected to decline by 10.4%. Nonetheless, home prices in both areas are expected to appreciate, albeit at a more typical rate.
The forecast indicates that the Kansas housing market will continue to face challenges due to limited inventory, higher mortgage rates, and weaker demand. However, these conditions are contributing to the appreciation of home values across the state. Homebuyers will need to act quickly and be prepared to pay higher prices, while sellers will continue to benefit from the favorable market conditions.
The full 2024 Kansas Housing Markets Forecast series can be accessed on the Wichita State University Center for Real Estate’s website.