Stable Rent Growth Despite Pipeline Boom
Taking all economic factors into account, the metro’s multifamily fared well in 2023, according to the latest Yardi Matrix Kansas City multifamily market report. The metro recorded moderate rent growth but managed to outperform most of the country last year. On a trailing three-month basis through January, rents were flat, at $1,253, while the U.S. rate was down 0.2%. The metro’s average occupancy in stabilized assets, however, fell 80 basis points year-over-year, to 94.5%, as of January. Both working-class Renter-by Necessity and Lifestyle rates declined.
Kansas City employment expanded 2.4%, or 14,400 net jobs, in the 12 months ending in November, 20 basis points above the U.S. rate, according to the latest national report. The government sector led growth, with 10,400 positions added, for a 6.3% increase. The area’s unemployment rate stood at 2.5% as of December, 120 basis points lower than the U.S. average, according to preliminary data from the Bureau of Labor Statistics. A longer-term boost could come from the development of a $2 billion new ballpark, announced by the Kansas City Royals.
Developers had 8,236 units underway as of January across metro Kansas City, with an additional 53,000 units in the planning and permitting stages. The number of construction starts doubled in 2023, with 5,119 units breaking ground, up from 2,505 in 2022. The sales slowdown continued, with multifamily deals totaling just $414 million in 2023.
Read the full Yardi Matrix Kansas City Multifamily Market Report March 2024
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