It’s been a cold winter in Kansas City, but the residential real estate market is hot.
Professionals across the board say that although inventory is tight, plenty of buyers are looking to buy new and existing homes across the metro.
On the other hand, some are choosing to stay in place, opting to expand or remodel rather than jump into the fray of a seller’s market.
Here’s a look at some of the trends in the current residential real estate market.
Across the metro, and, to a large extent, across price ranges, demand is strong for existing homes.
“We are seeing a strong seller’s market across all price points in Kansas City. Homes below $200,000 are extremely popular with both first-time homebuyers and investors,” said Katie Yeager, a Realtor and CEO of Your Future Address LLC, a flat-fee real estate company based in Overland Park.
There’s no doubt it’s a seller’s market. When she started selling homes in 2009, Yeager said, there was a grace period where buyers could find a home, think about it and then make a deal.
Now, she said, the window is so short it’s nearly instantaneous—buyers should expect to look at a house as soon as it hits the market because many homes garner multiple offers in the first day or two. She said she’s had some trusting clients buy a home based on a FaceTime walk-through. She’s even had investors buy homes sight-unseen because there’s no time to wait.
Buyers also can’t expect sellers to make fixes or concessions, she said.
Sellers have the luxury of being picky when it comes to financing, Yeager said.
“First-time home buyers are often times having to steer away from loan programs like FHA because sellers that have multiple offers on a home prefer cash or conventional financing,” she said.
In addition, she said buyers should be prepared to make an enticing deal, perhaps including a clause that might allow them to win out among multiple offers.
“We are seeing a lot of escalation clauses saying that a buyer will pay $1,000 over the next highest bid up to a certain amount,” she said.
There are a few things sellers should know, too. First, Yeager said, it’s a great opportunity for those thinking about downsizing to sell because they’re likely to come out ahead, even if they pay a premium for a smaller home.
Yeager said she recommends that sellers list the house on Thursday and stay elsewhere until Sunday afternoon. With 30 or more showings in the first two to three days, “you can’t do life and have the house in show-ready condition” during that time, she said.
Houses also need to hit the market at just the right price, Yeager said. Buyers already expect to pay a premium and possibly more than the asking price, but they’ll balk if they think a home is overpriced.
“Buyers today, if they think the price is unreasonable, they won’t even make an offer,” she said.
One thing hasn’t changed from past housing markets—the homes need to be clean and staged for the buyers to see themselves there.
“Clean it from top to bottom, more than you’ve ever cleaned it before, and make sure when someone walks into your home, it feels like their potential home,” Yeager said.
The market offers opportunities for current homeowners who want to stay put, as well. Yeager said it’s a great opportunity for home-owners with private mortgage insurance to refinance.
Some buyers are getting out of the existing home market and turning to new construction.
“I think what’s driving people to new construction is low inventory on the resale, or the existing homes, market. They can’t find what they want,” said Gary Kerns, who is president of the Greater Kansas City Home Builders Association and owner of Gary Kerns Homebuilders, which primarily builds north of Highway 152, in the Platte City and Smithville areas.
In 2017, 6,218 single-family home permits were issued in the metro area. That number has been steadily growing since the Great Recession—it was the first time since 2007 that permits surpassed 6,000.
Kerns said he expects to see similar demand in 2018. In fact, he said the constraint he’s worried about is the number of available lots in the Northland.
As interest rates remain low, Kerns doesn’t see demand slowing down in the near future—but he’s proceeding with caution.
“I’m probably a lot more cautious and a lot more conservative and paying a whole lot more attention to it. I can tell you this statement: I told many people back in the day—’05, ’06, whenever it was going strong—that I don’t see how this could ever go the other direction. And I just had never experienced it, so I didn’t have a clue as to how could this ever change. …
“Is it going to happen again? Eventually. Maybe it will just be a little setback, a little one- or two-year dip, not a 10-year dip.”
But for now, he’s continuing to give the people what they want. Some of the trends he’s seen include barn doors and foregoing the Whirlpool tub in favor of a larger walk-in shower. Bronze fixtures are being replaced by satin nickel and chrome, he said, and earth tones are out—many buyers are asking for a gray color scheme.
A kitchen and bathroom staple might also be phasing out.
“Granite countertops have been popular forever, and now quartz countertops are making their way into the market here,” Kerns said. Quartz prices have become competitive with granite, he said.
With new construction, buyers are able to choose what they want—but they’ll have to wait. For the price range that Kerns works in—about $280,000 to $400,000—there’s only about a one- to two-month supply of homes. It takes about eight months for Kerns to build, so buyers have to be patient.
Buyers looking for new single-family homes for less than about $200,000 are likely to be disappointed, though.
“I think it’s almost impossible right now with lot prices. Lot prices kind of dictate the end price of home,” Kerns said. He said developers likely would have to look toward the fringes of the metro area to find lots cheap enough to build lower-priced homes.
“If a guy could figure that out, it would pay big dividends, probably,” he said.
An alternative for those seeking housing at that price point would be the higher-density options, such as row homes rather than single-family.
Allen Deuschle works with homeowners who have opted out of selling and instead are looking to expand or refresh their current homes.
Deuschle is owner of Kansas City Remodel & Handyman Allen LLC, and he said he’s seen an increase in requests to add on to homes—often a bedroom, bathroom or both. With the right additions, he said, people may be able to grow in their homes for another 10 years.
Many of his clients are looking to spruce up homes that are 15 to 25 years old. A big part of his business is replacing decks in that age range, Deuschle said.
Customers also are looking for open floor plans, especially in the kitchen and living room—“walls are coming down to give it an open feel,” he said.
In bathrooms, Deuschle said he’s replacing carpet with tile, but on the walls, he sees many customers choosing products from The Onyx Collection, a company based in Belvue, Kan., that makes customized prefabricated panels that are quicker to install than tile and are easier to clean. Some customers opt for heated floors in the bathroom, he said, and many now prefer clear glass shower doors.
Another contractor who also sees many bathroom remodels is Mike Dodd, CEO of Lifewise Renovations. He and his staff members have a certification called CAPS—Certified Aging-in-Place Specialist.
Lifewise Renovations specializes in helping homeowners with mobility issues. With a registered occupational therapist on staff to consult with the client, modifications are designed to address specific needs in order to keep the client comfortable and safe at home. His company’s services are in demand with aging baby boomers, Dodd said.
Some of the most popular remodels Dodd sees are removing tubs in favor of barrier-free showers and roll-under vanities for wheelchair users. He stressed the importance of the modifications fitting the style of the house. “No one wants an institutional-looking bathroom. Ours are aesthetically pleasing and very elegant.”
The remodeling Dodd does adds value rather than diminishes it, he said.
“The real estate market is changing,” he said. “Incorporating universal design elements into a house is changing the way people perceive value in a home to the extent where it is becoming a selling point.”