Kansas home prices are still high, but what's next?

WICHITA, Kan. (KSNW) — Whether you are in the market for a new home or trying to sell a home, a new report has information that could help you decide what to do. The 2023 Kansas Housing Markets Forecast says Kansas home values will end 2022 up 12.3% and then rise by another 5.4% next year.

The Wichita State University (WSU) Center for Real Estate released the 2023 forecast Wednesday. Stan Longhofer, director of the center, will present the finding at a state realtors conference on Thursday.

“Home price appreciation is slowing, but the supply of homes available for sale remains near historic lows,” he said. “Although bidding wars may not be as intense as they were earlier this year, it will continue to be a sellers’ market across most of the state.”

The WSU Center for Real Estate reviewed current housing market conditions in Wichita, Kansas City, Topeka, Lawrence, and Manhattan. It also looked at 23 counties around the state and created a forecast for housing market activity through the end of next year.

2023 Kansas Housing Markets Forecast series

Source: WSU Center for Real Estate

Kansas Statewide Forecast

Home sales — Home sales activity across the state was slowing even before mortgage rates began to rise. Sales are expected to end the year down 6.9% at 43,100 units. Home sales should rebound to 44,930 units in 2023, an increase of 4.2%.

Construction — New single-family building permits in Kansas are expected to fall by 3.9% this year to 6,310 units. Construction activity should stabilize in 2023, dropping a modest 0.9% to 6,255 units.

Home prices — Home prices across the state rose by 14.6% last year as surging demand ran headlong into supply constraints that have been building for years. While demand has eased with rising mortgage rates, Kansas home values should still end the year up 12.3%. The pace of appreciation should slow next year to a still-strong 5.4%

Wichita Forecast

Home sales — Tight inventories and rising mortgage rates should cause Wichita-area home sales activity to fall by 4.9% this year to 11,560 units. Sales will rebound slightly in 2023, ending the year up 0.7% at 11,640 units.
Construction — New home construction activity in the Wichita area is expected to rise 5.2% this year to 1,530 units. This trend should continue in 2023, with permitting activity rising another 2.6% to 1,570 units.
Home prices — Wichita home price appreciation may be slowing from its torrid pace of the first part of the year but should still end the year up a remarkable 12.9%. Appreciation will return to a more normal pace of 4.7% in 2023.

Click here to read the full Wichita forecast.

Kansas City Forecast

Home sales — Total home sales in the Kansas City area should end the year down 8.3% at 41,940 units due to a combination of a lack of inventory and softening demand. Sales activity should rebound in 2023, rising 5.6% to 44,290 units.
Construction — Single-family permitting activity in the Kansas City metropolitan area slowed over the first half of this year due to supply chain issues and labor shortages. Kansas City should end the year with 6,295 single-family permits, down 10.7% from 2021. Permitting activity should drop again slightly in 2023, falling 1.7% to 6,185 units.
Home prices — The frenzied demand that characterized the market through the early part of this year appears to have eased. Nevertheless, extremely tight inventories will continue to put upward pressure on home prices. Kansas City values should end the year up 13.8% before slowing to 6.5% in 2023.

Click here to read the full Kansas City forecast.

Topeka Forecast

Home sales — Topeka area home sales will end the year down 2.5% at 3,410 units. Sales should decline again just slightly in 2023, ending the year down 0.6% at 3,390 units.
Construction — New home construction activity in the Topeka area has risen markedly over the past several years in spite of supply chain issues and labor market shortages. This trend should continue, with total single-family building permits rising 4.3% this year to 435 units. Construction should taper off somewhat in 2023, falling 2.3% to 425 units.
Home prices — Extremely tight inventories continue to put upward pressure on Topeka-area home prices, which should end the year up 9.7% before slowing to a more-typical 3.3% gain in 2023.

Click here to read the full Topeka forecast.

Lawrence Forecast

Home sales — Lawrence-area home sales are expected to fall by 4.9% this year to 1,470 units due to tight inventories and softening demand. Sales should rebound slightly in 2023, ending the year up 0.7% at 1,480 units.
Construction — Single-family permitting activity in the Lawrence area has stabilized at about 270 units annually in recent years. This trend should continue for the foreseeable future, with Lawrence ending the year with 275 new single-family permits, followed by 265 new permits in 2023.
Home prices — Extremely tight inventories have caused Lawrence home values to rise at a historically fast pace. Lawrence home values should end the year up 12.3% before slowing to a more normal appreciation rate of 4.8% in 2023.

Click here to read the full Lawrence forecast.

Manhattan Forecast

Home sales — Home sales activity in the Manhattan-Junction City metropolitan area is expected to decline by 9.3% this year to 2,030 units due to a lack of inventory coupled with higher mortgage rates. Sales should fall by another 2.5% in 2023 to 1,980 units.
Construction — New home construction activity in the Manhattan-Junction City area is expected to rise by 3.4% to 275 units this year in spite of supply chain issues and a shortage of labor. This should continue in 2023, with permits increasing another 3.6% to 285 units.
Home prices — Home values in the Manhattan-Junction City metropolitan area are on pace to rise by 9.3% this year. The market should normalize in 2023, with home values rising by a solid but more-typical 4.2%.

23 Kansas counties

Click the links below for each county’s housing market forecast.

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