December 5, 2018

Kansas City Q3 Market Report: Construction Picking Up, Rents Pushing Higher

Report highlights:

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The Kansas City multifamily market was somewhat mixed in the third quarter, with the vacancy rate inching higher but rents posting strong gains. Recent vacancy increases have been the result of new construction, rather than a decline in renter demand.
Vacancy inched up 30 basis points during the third quarter, reaching 4.7 percent. The rate has risen in each of the past two quarters and remained in a fairly tight range over the past several years.
Even with vacancy ticking higher in recent quarters, rents continue to rise. Asking rents gained 1.3 percent in the third quarter and have increased 4.3 percent in the past year to $913 per month.
Investment activity surged in the third quarter following a slower period of transactions in the second quarter. The median price dipped a bit in the most recent period but is up nearly 10 percent from the 2017 median price. Cap rates have averaged approximately 6 percent for much of 2018.