December 28, 2021

Kansas City Q3 Multifamily Market Report: Rent Growth Accelerates as Vacancies Trend Lower

Highlights:

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The Kansas City multifamily market recorded strong improvement during the third quarter. A surge in absorption drove vacancy rates lower and the heightened demand fueled rent growth. With the economy improving, additional gains are forecast for the local rental market.
After trending higher for the past several quarters, the vacancy rate changed direction in the third quarter. Vacancy fell 20 basis points in the third quarter, retreating to 5.5 percent. Despite the recent improvement, the rate is up 70 basis points year over year.
The pace of rent growth has accelerated in recent months. Asking rents rose 4 percent in the third quarter, reaching $1,050 per month. In the past year, asking rents have gained 6.2 percent.
The pace of transactions slowed in the third quarter, following a spike in activity in the preceding three months. Prices have pushed higher throughout the year; the median price in transactions that have closed in 2021 is up to $93,100 per unit, 23 percent higher than in 2020. Cap rates have compressed to 4.5 percent on average.