If you don’t know that the Kansas City Metro real estate market has already shifted (toward more inventory, longer days on the market, stagnant rents, and higher costs for taxes and insurance), it’s time you found out. This new market is nothing to fear; in fact, it’s full of opportunities that weren’t available a year ago. All you need to do is get up to date on the best strategies to implement NOW, and 2025 could be your most profitable year yet.
Guest blog post from Kim Tucker. Kim along with her husband Don and son Scott buy houses in the KC metro at kcmoHomeBuyer.com. They also list property for sale at Realty Resource. They went through 2008, 9, 10, ect by adapting their methods to what was working at the time. We are hearing rumblings of a market shift in real estate and here’s where we think we need to focus . . .
Market Stats We are Seeing In Kansas City
According to KCRAR, key indicators reflect this shift:
- Supply: Housing supply increased from 1.6 months in December 2023 to 1.8 months in 2024, a 12.5% rise.
- Inventory: Listings grew from 4,264 to 4,910—a 15.2% increase.
- Days on Market: Homes averaged 39 days on the market in 2024 compared to 32 in 2023, a 21.9% jump.
Meanwhile, Zillow reports median KC metro rents rose from $1,310 in January 2024 to $1,395 in January 2025. Real estate taxes are climbing across the metro, and insurance premiums are spiking due to natural disasters nationwide.
Beyond local trends, national financial pressures are mounting. Credit card balances hit a record $1.14 trillion, up 48% since 2021, while mortgage delinquencies rose for six consecutive months in 2024. Over 2 million properties are 30+ days past due, and 512,000 are seriously delinquent. Despite this, foreclosure activity remains subdued.
Scary isn’t it? I personally, don’t want to turn on the news.
Market Shifts: Stories from the Trenches
I have seen a lot of social media of houses on the market that have a “Price Improvement” on houses for sale. I’ve seen this a lot, some price improvements of $40,000, $60,000 with incentives. I just heard a friend say she had dropped her price by $100,000 and still nothing. Just last week I saw a house for rent from a major player, they were offering free rent with a signed lease.
Then we have our rehabbers . . . some major, super successful rehabbers. I have had 4 or 5 different people call me with a similar request . . . who lends in 2nd position. They all have several houses going and
- I ran out of money on the rehab because the house that was supposed to sell to cover it is still in escrow or still waiting for a buyer.
- I have one under contract and when it closes, I will have the money I need, but I need a bridge loan for $30,000 for the next 3 or 4 months.
- I have a rehabbed house, it’s done and listed. But it’s not selling. I need to cut my price to get it sold, but with points and 6 months of interest, I now owe more on the house than I can sell it for after paying the realtors and the closing costs.
Then I’ve had people who are out making offers with pre-approval letters from hard money lenders that were written several months ago. But the lenders have tightened their belts and want more conservative after-repair values, a bit higher rehab cost and the percentage that they lend based on the Maximum Allowable Offer has changed.
Sound familiar . . . I was at a meeting with association leaders from all over the country and they are reporting all the same issues I am sharing here.
Lessons from the Last Economic Shift
While I don’t think we have a giant crash coming any time soon, the experts have been predicting one for the past 8 or 9 years, and based on the above experience, something is going on. All my leader friends agree and are super pumped, they are getting ready to do a lot more deals because they have already been through one or two major shifts in the economy in their real estate careers.
So what happened in 2008 and what might we expect in the next 12 to 24 to 36 months? (I wish I knew the exact timing, but I don’t)
- Traditional Financing Halted: Banks largely stopped lending to investors. Deals required creative financing, private money, or cash.
- Seller Financing and Subject-To Deals: Many sellers who want to sell either bought their houses in the past few years with CASH (really) and are in a good position to seller finance you, are baby boomers with paid-off houses who are also in a good position to seller finance you, or they have a 2% or 3% loan that you may be able to take over subject to. (We are learning seller financing on January, 25)
- Private Lending: Many turned to private lenders, offering interest, points, or equity. Joint ventures became common. I personally used all of these, we’ve had several recent classes and I am going to boot camp to learn more from John Burley in March . . wanna come with?
- Foreclosures and Short Sales: While we’ll likely never see the same volume, short sales are making a comeback. Remember a few months ago, David Randolph shared that he and his students are making $50,000 to $100,000 per deal.
Preparing for the Road Ahead
As we enter into this new phase, if you are a new investor or you have only been investing for a few years, there are a few things you need to do.
- Know Your Numbers: Relearn what makes a deal work. Get crystal clear on the Maximum Allowable Offer formula and all of its components.
- Get Some Creative Deal Making Tools: We have held several classes over the past year on creative deal making, we see more coming.
- Explore New Niches: Consider alternatives like land deals, alternative housing options, or back to basics with rental property (All on the calendar in the next 45 days at MAREI)
- Leverage Community: MAREI members have a wealth of knowledge and experience. Tap into this network to solve problems and discover opportunities.
- Stay Educated: Attend events, ask questions, and adapt. All of these niches I’ve talked about have been on the MAREI calendar in the past 3 or 4 months or are coming up in the next 6.
A Bright Future Amid Uncertainty
While the economic road ahead may feel rocky, it’s also paved with opportunity. Many fortunes were made in the last downturn, and many more will be made in the years to come. Whether the predicted downturn happens next year or in eight years, staying informed and connected will position you for success.
Stick around, explore the possibilities, and let’s navigate this journey together.
