Kansas is one of the largest agricultural contributors in the country, producing primary crops such as wheat, corn, sorghum, and soybeans, among others. Located in the Grain Belt, it is known as the Sunflower State. It ranks 15th by size at 82,278 square miles. Kansas became the 34th state in 1861 and now, with a population just short of three million people, is the 34th largest state by population. Between 2010 and 2014, the state saw a population increase of 1.78 percent. Let’s examine whether or not these factors influenced the 2016 Kansas real estate market.
The top three employers in the state are Spirit AeroSystems (over 10,000 employees), Sprint (with 7500 employees), and Cessna Aircraft (slightly more than 6000 employees). The unemployment rate is 3.8 as of June 2016, over a point lower than the national rate of 4.9. The job market has seen an increase of 2.6 percent in the last three years; however, job growth in Kansas is questionable. The state government has taken measures such as income tax cuts, and even elimination, as measures to lure more people and businesses to the state. The plan has not been as successful as hoped so there is some uncertainty in future job growth.
Compare This Year’s Report to The 2015 Kansas Real Estate Report
The 2016 Housing Market in Kansas seems to be much more stable than the job market. Kansas real estate has a rating of 5.3 out of 10 according to Zillow. Statewide, appreciation rates are 4.09 percent over the last 12 months. The median list price for a house is $135,000. Zillow’s home value index is $120,500: a 4.4 percent increase from the previous year. Housing market predictions expect Kansas real estate to continue to increasing at 3.5 percent over the next year. There is currently an abundance of rental properties in the state. The rent index is $1064 (Zillow). The overall real estate market is stable.
Influencing Factors for the 2016 Kansas Housing Market
- Zillow lists the median home value at $120,500 which is 4.4 percent higher than the previous year (2015) and the future prediction is a further increase of 3.5 percent through 2017.
- As of July 2016, the foreclosure rate is 10 percent lower than June 2016 and 34 percent lower than the same time last year (2015).
- Zillow’s rent index of $1064 has seen only a minimal change from previous indices
- The current APR is 3.31 percent, slightly higher than the nation average of 3.28 percent. The average in Kansas is, in fact, lower than the rest of the nation at 3.26 percent. The range has varied between 3.20 percent and 3.41 percent.
- Kansas has taken steps to promote home ownership and assist home buyers. Programs have included free land offers, grants for first time home buyers, and assistance with down payments and closing costs.
Best Places to Live in Kansas
Topeka is the capital of Kansas and boasts a population of 127,215 people making it the fifth largest city in the state. The city is home to Payless Shoes headquarters as well as their major distribution facilities. The current housing market is less than healthy according to Zillow Topeka. As of July 2016, the foreclosure rate is 50 percent higher than June 2016 but 25 percent lower than July 2015. The current home value index is $95,000. This reflects an increase of 4.6 percent in the last twelve months and a 4.3 percent increase is expected to continue over the next twelve months. Topeka real estate consists of a slight majority of home owners, 68 percent, and of those owners 39 percent are single at a median age of 38. The median price listing of homes is $86,000. A small, two-bedroom home may sell for as low as $20,000 while a large seven-bedroom mansions sells for slightly less than 3 million dollars. Realtor.com listed 779 properties for sale and 106 available for rent. The rent index is $979, a 3 percent increase from 2015, and the median rent is $775. Trulia Topeka lists properties ranging from a one-bedroom apartment or efficiency for $325 up to a four-bedroom house for $2500. Craigslist Topeka has listings for one- and two-bedroom apartments in the vicinity of $350 and three-bedroom homes for $1200 to $1400 per month.
Wichita, with a population of 388,413, is the largest city in the state of Kansas and the 48th largest in the United States. It is the location of the headquarters for Koch Industries, a conglomerate of manufacturing, trade, and investing. Wichita is also known as “The Air Capital of the World” due to the presence of design and manufacturing facilities for Cessna, Beechcraft, Learjet, Airbus, and Spirit AeroSystems. The Wichita real estate market is stable with a 4.6 out of 10 rating from Zillow. Sixty-one percent of residents own their homes, of those home owners 38 percent are single and the median age is 34 years. Zillow’s home value index is $112,600; the median list price is $147,000 whereas the average list price is $184,654. Plots of land for home building are extremely affordable while a two- or three-bedroom home can be purchased for as low as $15,000. The opposite end of the spectrum includes four- to six-bedroom homes for just under two million dollars. Trulia has an extravagant listing for a seventeen-bedroom castle for 3.5 million dollars. July 2016 had 584 houses listed in some stage of foreclosure, 9 percent lower than June and 209 percent lower than July 2015. The home value index is 2.5 percent higher than 2015. At this point, in a stable market, there is no significant change expected over the next twelve months.
Thirty-nine percent of residents in Wichita rent their homes. Zillow’s rent index is $949 with the median rent being $895. The rent index represents a decrease of 2.9 percent from 2015. A one- or two-bedroom apartment is available for approximately $350, in some cases even less than $300. A five-bedroom house rents for a maximum of $3575 based listings found on Trulia.
Kansas City is home to the University of Kansas and University of Kansas Hospital, which is also the largest employer followed closely by GM. The University of Kansas Medical Center rounds out the top three employers. As the third largest city, the population is 149,636. The Kansas City real estate market is less healthy with a rating of 2.7 out of 10. Sixty-five percent of residents own their home, 34 percent are single, and the median age is 35 years. The median list price is $92,000 and the average list price is $103,303. Home values have increased 6.2 percent and are expected to continue increasing at 3.6 percent. In July 2016, 282 properties were in some stage of foreclosure. This is 10 percent higher than June but 12 percent lower than June 2015. A small, two-bedroom home may sell for as low as $10,000. A three- to six-bedroom home may sell for anywhere from $200,000 to in excess of one million dollars. Multi-million dollar plots of land are available or development. Zillow’s rent index is $843, only a minor change from 2015, and the median rent is $1000. While a studio apartment rents for less than $500, a three- or four-bedroom home rents for just short of $2000.
Manhattan, nicknamed “The Little Apple,” is the 8th largest city in the state. Kansas State University is located in Manhattan. It is the largest employer followed by the city school district. The population is 56,078. The median list price is $192,000 and the average list price for Manhattan KS real estate is $241,575. Less than half of the residents, 47 percent, own their homes. Forty-three percent are single and the median age is relatively young at 28 years. The market does seem slightly higher than other markets. A one- to three-bedroom home starts in the mid $90,000 and a three- to five-bedroom home can cost upward of one million dollars. Thirteen properties were listed in foreclosure in July 2016, the same as June 2016 and that number is expected to stay the same going forward. The median rent is $1250 and the rent index is $1356, a slight increase over 2015. As a college town, many rooms in shared homes are available for rent for $300 to $400. A one-bedroom apartment rents for $500 while a five- or six-bedroom home rents for $2000 and up.
The fourth largest city in Kansas is Olathe with a population of 133,062. It is home to the headquarters of several companies including Garmin, Honeywell, Husqvarna, ALDI, and Farmers Insurance Group (while based in Los Angeles, CA, Olathe has more employees than any other location). The Olathe real estate market is healthy with a rating of 6.1 out of 10 from Zillow. A majority, 89 percent, of residents own their homes. Twenty-two percent are single and the average age is 35 years. The median list price is $280,000, the average list price is $310,450, and the home value index (Zillow) is $209,500. The value has increased 5.7 percent over the last twelve months; the predicted value is expected to increase 3.7 percent over the next twelve months. One-hundred and eleven properties were listed in foreclosure in July 2016, more than 50 percent higher than June 2016 and 8 percent higher than 2015. A one- to three-bedroom home sells in the range of $50,000 while a four- or five-bedroom house can sell for over four million dollars (maximum). A relatively small number of the population rents their home. The Zillow rent index is $1692, similar to the previous year. The median rent is $1510. One- to two-bedroom apartments rent in the $500 to $600 range and a four-bedroom home rents for $2000 to $3000.