Recently the National Association of Realtors said the Kansas City Region will be one of the top hot spots in 2025 and the November market stats give a hint as to why they might be thinking that way. Starting with appreciation of resale residential properties (condos, townhomes, single family etc that are not new homes) that showed a 5.8% increase in the median price over November 2024.
While down from the peak of $314,000 in June 2024 this is typical seasonality. At $289,000 this is the same as the median for all sales for 2024 which is an increase of 7.04% over 2023 if there were no additional closings this month to change that number. All 13 months of our chart below show growth in the year of year median sales price with the highest change in April at 9.6% and the lowest happening in August with just a 2.5% increase.
As we look at new listings we saw for only the second time in 13 months a decline in listings taken year over year. November 2024 saw a decline of one listing over November 2023. Not one percent, one actual listing with 2024 having 2,595 compared to November 2024 with 2,596. This comes on the heels of an October increase of 16%. With some of the lowest mortgage interest rates of the year in late September and early October some sellers may have hopped into the market with the opportunity to move with as much of an increase to their possibly lower interest rates from 3-5 years ago and unlock their appreciation from the past several years. In 2019 the median price was $195,500 and in 2024 at $289,000 it is getting close to a 50% increase in just 5 years.
While listings stayed about the same the number of contracts followed a strong October of 16% increase with an even better 18.8% increase over November 2023. This marks the 4th strait month of increases starting in August. With the recent Federal Reserve announcement of fewer than expected rate changes for 2025 sending interest rates back over 7% it will be interesting to see if December and the first part of 2025 can continue this trend.
When you have contracts written increasing you can expect to see an increase in closings within the next two months as the average time between contract date and closing date is about 6 weeks. As we started to see houses go under contract in August and September the number of closings remained down from previous years those same months but October and November started to see the new owners close on those properties with an increase in closings of 9.18% in October and 10.82% in November. We should still see strength in the closings based on the contracts written and rates locked in before interest rates went back over 7% last week.
As we finish out 2024 with the election behind us what could impact the 2025 housing market? Tariffs, if the cost of building supplies goes up dramatically it will impact the cost of building new homes exacerbating the lack of new supply to keep up with demand and drive prices higher on existing inventory. It could also impact the supply of rental properties as apartment builders pull back as the increase in rents needed may outpace the amount of rent the consumer can spend if a lack wage increases and inflation work against their already over extended pocket books. Higher for longer interest rates will also continue to keep sellers locked into a home because of their low interest rates if they don't have to move. Predictions for rates now are thinking low 6% rates by the end of 2025.
Kyle Niemann
Engel & Völkers Kansas City
(913) 900-0001
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