$862 1Q 2024
2.5%
92.1% 1Q 2024
-70 BASIS POINTS
4.4% (FEB 2024)
7.5% (FEB 2024)
* Please note that these employment figures have been adjusted for seasonal variations and are based on Moody’s Analytics forecast as of January 1, 2024.
** Please note that these unemployment rates are estimates that have not been adjusted for seasonal variations, and they are derived from Moody’s Analytics forecast as of January 1, 2024.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
Despite this upward trend in demand helping to stabilize the market, absorption did not keep pace with the 380 units that were delivered during the same period. Among Wichita’s thirteen submarkets, the West submarket, which has experienced rapid expansion in recent years, accounted for roughly one-third of the total absorbed units this year. Barring a major economic downturn, the gap between supply and demand is expected to narrow, reaching a near equilibrium, and supporting healthy market growth by the year’s end.
As the second quarter of 2024 begins, Wichita’s construction pipeline includes 464 units under construction, accounting for 1.3% of the current inventory—significantly lower than the national average of 4.8%. Development is concentrated in only three submarkets, with the Belaire/Northeast submarket hosting approximately two-thirds of these units. The remaining units are split between the West and East submarkets. After a period of growth, Wichita’s construction pipeline is tapering, a trend that should help in absorbing the units that are currently vacant and is expected to drive occupancy rates upward once again.
Over the year leading up to March 2024, Wichita’s apartment market saw a decrease in the average occupancy level by 70 basis points, stabilizing at 92.1%. However, this decline has shown signs of slowing significantly in the most recent quarter. Despite the overall downtrend, five of Wichita’s thirteen submarkets have sustained occupancy rates above 94.0%, notably exceeding the metro average. Among these, the Sumner County submarket boasts the highest occupancy rate at 98.2%. Additionally, during the same quarter, Downtown Wichita, Northwest, East, and Derby/Haysville submarkets all reported increases in occupancy, signaling a potential stabilization across varied areas of the market.
In the first quarter of 2024, Wichita’s multifamily market reported a robust 2.5% year-over-year increase in average effective rents for new leases, reaching $862 per month. This growth rate significantly surpasses the national average of 0.8%, positioning Wichita among the top-performing markets nationally. Forecasts indicate a potential 3.7% annual increase in rents, underpinned by stabilizing occupancy rates and a moderated pace of new developments. Notably, the strongest rent growth was observed in the suburban areas of Sedgwick County and Derby/Haysville, with increases of 5.5% and 5.3%, respectively. A limited influx of new units has enabled landlords across most submarkets to progressively raise rents. Except for the Northwest submarket, all areas reported positive year-over-year rent changes, with ten out of thirteen submarkets exhibiting above-average rent growth.
Average Monthly Mortgage Payment
Average Monthly Rent
Sales activity in Wichita’s apartment market reached $73.1 million in the trailing 12-month period ending March 2024, surpassing the 10-year average of $61.5 million. Prior to 2024, Wichita was not a heavily traded market, with sales volume averaging $46 million per year from 2015 through 2024. However, this figure nearly doubled in 2021 and 2022, fueled by low interest rates that attracted significant outside investor interest. Historically, Wichita had a substantial local ownership base, but this has shifted in recent years as investor interest in multifamily buildings has increased. Since 2024, local owners have divested more than $100 million in assets across the market. Despite this divestiture, the composition of owners has remained relatively stable recently. As of the beginning of 2024, private investors continued to dominate the buyer pool, responsible for all purchases in 2023, and now own almost 80% of properties in Wichita. The remaining 20% is held by a mix of institutional owners, REITs, and private equity groups.
* Preliminary Data from RCA – Individual transaction $2.5M +
Please note that the income and expense data presented in this section is sourced from third-party providers. Our firm does not provide any warranty or guarantee as to the accuracy or reliability of this information. We recommend that users exercise their own discretion and professional judgment when interpreting and utilizing this data.
| Income Assumptions | Value / Unit | Year Change (%) |
|---|---|---|
| Rental Income / Occupied Unit | $858.43 | 6.8% |
| Recoverable Expenses / Occupied Unit | $31.60 | 10.8% |
| Other Income / Occupied Unit | $69.43 | 5.6% |
| Total Income / Occupied Unit | $959.47 | 6.8% |
| Rental Income | $814.09 | 5.9% |
| Recoverable Expenses | $29.97 | 10.0% |
| Other Income | $65.85 | 4.8% |
| Total Income | $909.90 | 6.0% |
| Operating Expenses | Value / Unit | Year Change (%) |
|---|---|---|
| Payroll | $116.13 | 3.9% |
| Repairs & Maintenance | $42.30 | 8.8% |
| Leasing | $32.29 | 2.2% |
| General | $41.55 | 0.6% |
| Marketing & Advertising | $13.35 | 20.8% |
| Repairs & Maintenance | $78.58 | 4.8% |
| Cleaning | $9.57 | -5.1% |
| Roads & Grounds | $15.23 | 9.9% |
| General | $53.78 | 5.3% |
| Administrative | $23.57 | 6.3% |
| Security | $4.35 | 11.5% |
| General | $19.22 | 5.2% |
| Management Fees | $39.44 | 8.5% |
| Utilities | $53.46 | -3.1% |
| Electric | $14.86 | -5.8% |
| Gas | $1.99 | -12.8% |
| Water/Sewer | $36.61 | -1.3% |
| Real Estate & Other Taxes | $73.92 | -0.3% |
| Insurance | $37.12 | 15.9% |
| Other Operating Expensees | $1.00 | |
| Total Operating Expense | $436.56 | 4.4% |
| Value / Unit | Year Change (%) | |
| Net Operating Income | $473.34 | 7.5% |
|---|
In recent quarters, the introduction of new properties has caused minor fluctuations in apartment market dynamics. However, these changes have been subtle and have not disrupted the prevailing balance of the market. This resilience, amidst evolving factors, is promising for apartment owners and managers in Wichita, suggesting a healthy market that is well-equipped to adapt to dynamic conditions.
Additionally, Wichita is witnessing significant commercial construction and revitalization, especially in the downtown area. This activity is expected to drive an increase in housing demand. As a key hub for aerospace manufacturing and maintenance in the U.S., Wichita’s economic outlook remains positive. This optimism is fueled by strong demand and upcoming projects that are set to stimulate the local economy. A major contributor to this positive trend is the planned $1.8 billion semiconductor facility by Integra Technologies Inc. in Bel Aire. This project, poised to be the second-largest private investment in Kansas history, will create thousands of jobs.
Furthermore, McConnell Air Force Base continues to be a major economic force in southeast Wichita, acting as the largest employment center in the area. Another significant development is the $130 million Outdoor Adventure Sports Complex currently under development in South Wichita, which further underscores the city’s growth and economic vitality.
