Limited Supply Keeps Rent Gains Healthy
Kansas City’s multifamily market continued to display steady fundamentals, despite national and macroeconomic challenges. With deliveries lagging, rent growth remained above the U.S. rate, rising 0.6% on a trailing three-month basis, to $1,218, but still affordable compared to the $1,727 U.S. figure. The occupancy rate slid by only 10 basis points in the 12 months ending in September—at 95.5%—sustained by the upscale segment.
Kansas City unemployment dropped to 2.2% in September, according to preliminary data from the Bureau of Labor Statistics, outperforming the U.S. (3.5%), Missouri (2.6%) and Kansas (2.8%). While the market had more employees going into 2022’s third quarter than it did right before the pandemic started, job growth has lagged lately. In the 12 months ending in August, employment improved by just 1.4%, or 9,700 jobs, but has good prospects, thanks to several projects underway. These include Panasonic’s $4 billion plant in De Soto and Meta’s data center in Golden Plains Technology Park.
Developers delivered just 1,932 units in 2022 through October and had an additional 7,247 units underway. Construction starts dropped to 1,178 units in 2022. Meanwhile, investors traded $1.3 billion in assets—a new record for the metro—but quarterly volumes are declining. The price per unit posted a remarkable annual performance, rising by a hefty 49.5%, to $172,682.
Read the full Matrix Multifamily Kansas City Report-December 2022