As numerous apartment markets face a considerable downshift in fundamentals, Kansas City exhibited resilience with steady demand in the third quarter. Prospective renters absorbed nearly 900 net units, closely aligning with the 917 units that were added to the unit inventory, thereby sustaining a stable occupancy rate of 94.5% through the period. Although the projected inventory expansion of 4,744 units over the next four quarters slightly overshadows historical averages, it presents a manageable challenge for operators tasked with efficiently filling units in the short-term. It’s anticipated that by the close of 2024, operators should have navigated through the new supply. While following the national trend of moderating rent growth, Kansas City showcases a resilient 3.3% growth rate in Q3 2023, supported by a steadily thriving job market with substantial growth in sectors like education and health services, leisure and hospitality, and government. The city’s unemployment rate, at 3.4% as of August 2023, remains below the national average, highlighting the area’s economic strength. Kansas City’s cost of living, reflected in an index score of 93.3, enhances its appeal, presenting a more cost-effective living standard compared to numerous other metropolitan areas. As we transition into 2024, the corresponding market dynamics, robust economic performance, and resilient renter base establish a foundation for Kansas City’s continued stability and growth amidst an evolving economic backdrop.
Sources: RealPage; BLS; MSCI; The Council for Community And Economic Research (C2ER)