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September Residential Market Update Highlights for the Kansas City Region

Kyle Niemann

Updated: 4 days ago

September 2024 Kansas City Real Estate Market Overview

The phrase "previous years’ results are not indicative of future performance" could easily apply to the Kansas City real estate market in September 2024, where the median sales price of a resale home reached $295,000. Looking back over the last 10 years, an increase in the median price from August to September only occurred once—during 2020, driven by the unique circumstances of the COVID-19 pandemic. The 9.3% increase in September 2024 compared to September 2023 marks the second-highest change in the past 12 months, surpassed only by April 2024’s 9.6% increase.


New resale listings continued their upward trend, marking eight consecutive months of year-over-year increases, with a 6% rise this September. Over the last 12 months, 11 have seen an increase in new listings, with only January experiencing a decline of 3.52%. However, the colder weather and the excitement surrounding the local football team's championship run likely delayed some listings to February, which saw a remarkable 30% increase.


While new listings have steadily risen, contracts written on homes lagged behind until the past two months. After experiencing negative growth in May, June, and July, contract activity rebounded, with a 6% increase in August and a 10% increase in September. Many factors influence contract activity, including the number of homes available for sale, but one of the biggest is interest rates. Although the Federal Reserve’s interest rate doesn’t directly affect mortgage rates, it does impact the mortgage bond market. In response to a recent Federal Reserve announcement, mortgage rates briefly dropped to almost 6% for a 30-year fixed mortgage, but as of October 17th, 2024, they had climbed back to 6.68%, according to Mortgage News Daily.


Despite the recent uptick in contracts, this hasn't yet translated to more closings. Many of these contracts are expected to close in October and November, given the typical six-week lag between contract signing and closing. September 2024 closings were nearly 4% lower than in 2023, which itself saw a significant 20% drop from 2022. The decline in closings and the rise in new listings make the substantial increase in median sales prices somewhat surprising, as supply has been increasing while demand (in terms of contracts written) remained flat from April to July. However, the dip in interest rates did provide buyers with more purchasing power, likely pushing prices higher.


The average days on market (DOM) also continued to trend upward, reaching 30 days in September 2024, compared to 25 days in 2023. This nearly matches the 31-day DOM from 2020. Before the pandemic, the lowest DOM since 1997 was 40 days in 2019, after steadily climbing to a peak of 111 days in 2011. From 2012 to 2021, the DOM decreased annually in September, hitting an all-time low of 18 days before the trend reversed over the past three years.


Despite some positive trends, several headwinds persist in the real estate market. Although inventory (the number of homes available for sale) is increasing, it remains relatively low. To meet demand, we need to focus on increasing supply, potentially through incentives. Lower interest rates in the future could alleviate the "lock-in effect," where homeowners are reluctant to sell due to the historically low interest rates on their current mortgages compared to today's rates. Additionally, with the presidential election less than three weeks away, each candidate has proposals to make housing more affordable. However, increasing demand by offering large financial incentives for homebuyers may have unintended consequences, driving prices higher, as seen with low interest rates and COVID stimulus money between 2020 and 2022. Increasing supply should be the primary focus of national, state, and local governments to prevent another surge in home prices.






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