Hey Kansas City, here’s why you can’t buy a house — straight talk from buyers and real estate experts

Published: May. 2, 2022 at 5:00 AM CDT|Updated: May. 2, 2022 at 1:46 PM CDT
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KANSAS CITY, Mo. (KCTV) - There’s a new home buying game in town. Here are the rules:

  • Cash is king
  • Asking prices are just starting points
  • You snooze, you lose

It doesn’t matter which area of the metro you’re looking at to buy a home, the housing market is red hot. It’s been building over the past couple of years and despite rising interest rates, it shows no signs of cooling any time soon. Prospective buyers and realtors tell us they’ve never experienced anything like what’s happening in Kansas City right now.

It’s grueling for those hoping to buy.

John Allen and Monica Wanniger have been house hunting for five months.

“You’re excited at first, right?” said Wanniger. “You know, is this gonna be the one?” They’ve looked at more than 50 homes but keep getting outbid with cash offers or other buyers waiting for inspections. The competition is fierce and relentless.

“It’s just an emotional roller coaster,” said Wanniger.

Sometimes they get a warning before they even get to the house. Their realtor sends them a text message.

“The worst is when she’ll get there to the house before we even get there, and she’ll just like send us like an emoji,” said Allen. “There’s like there’s like 40 or 50 people they’re looking through the house at the same time.”

They fell in love with a house in Roeland Park. It was in their budget. It was listed at $250,000. Someone paid $340,000—cash.

This is not an isolated example. Deals like this are going down across the metro at all price points.

Click here to see how list and sale prices compare:

Home prices have increased an average of 12.9 percent in the metro area.

“It’s Insanity,” said realtor Sherri Hines. “There’s just a frenzy that you can’t describe. The tension level with buyers and agents and lenders and inspectors--there’s just a stress level across the board that is hard to even explain.” You can blame supply and demand, but it’s more than that. One expert we talked with said that even if half of all the buyers in Kansas City just gave up and quit looking, we’d still be a sellers’ market. “We have this perfect mix where everyone now wants housing, and there isn’t very much housing,” said Realtor Michael Pierce. “It takes a long time to build up new construction in order to get to a more balanced market again.”

The lack of new construction has created problems nationwide, not just in Kansas City.

“You’ve got way too many buyers right now,” said Realtor Curtis Jay. “So the supply and demand is off. You’ve got way too many buyers, not enough sellers. And then you also have an equation of more investors into the picture and it’s throwing the whole situation off.”

A lot of people are blaming “outside investors.” And there are plenty of people speculating on Kansas City’s real estate market. It includes institutional buyers who want to single-family dwelling to rent. Some are hedge funds. It’s unclear just how many are speculating in Kansas city because no one is keeping track of the numbers. But they are making their presence known in the market. Realtors told us they see these all cash offers from big companies they didn’t see five years ago.

Home prices have increased an average of 12.9 percent in the Kansas City metro area.
Home prices have increased an average of 12.9 percent in the Kansas City metro area.(KCTV5 staff)

Home prices have increased an average of 12.9 percent in the metro area. It seems that the entire metro is hot right now, but data shows Overland Park—specifically the Blue Valley School District—is the hottest of the hot. Starter homes, anything in the $250,000 to $350,000 range are the most competitive.

Even if you aren’t looking to buy, this crazy market affects you. It impacts your property tax bill, and what people have to pay for rent. The pain is most obvious for those like John and Monica who can’t graduate to home ownership.

“We are paying $1,500 in rent here,” said Allen. “And that’s a mortgage payment, easily.”

Some people may even feel trapped in their current home. Sure, they could sell it at top dollar, but getting into a new home could be challenging.

Wanniger describes house hunting as a full-time job that hasn’t paid off yet.

For some, it really is their full-time job. In our next report, we talk with a local real estate investor about why institutional buyers and hedge fund operators are focusing on Kansas City, and get his view on what housing may look like in the not-so-distant future