Slow and steady remained the theme for the Wichita real estate market in 2016. Home prices and appreciation rates, although still lower than the national average, continued to experience modest improvements during the first-half of the year. While home prices continued to grow relative to last year, appreciation rates were slow to follow. Nevertheless, gains in the last three years have extended the trend of positive price growth since the recession. For homeowners and investors, the momentum of the Wichita real estate market is headed in the right direction.
Market factors influencing the momentum in 2016 included the local economy, new housing construction and home affordability. The Wichita real estate market, which is among the more affordable in the country, could be impacted by the slowdown of new construction. On the other side, the local economy in Wichita is on par with the national average, which should bode well for current and future investments. That said, the Wichita real estate market is poised to see continued improvements down the line.
Wichita, KS Real Estate Market Statistics:
Home appreciation is a critical element in real estate, whether an investor or homeowner. It not only leads to increases in home prices, but home equity as well. One-year and three-year appreciation rates for Wichita real estate reached 1.3 percent and 8.3 percent during the first-half of the year. In comparison, the national average experienced appreciation rates of 4.9 percent and 17.8 percent. Although appreciation is lower than the rest of the country, rates in Wichita remain on an upward trajectory. For those considering Wichita real estate investments, the following outlines appreciation gains from previous years:
- Homes purchased in the Wichita, KS housing market one year ago have appreciated, on average, by $4,055. The national average was $14,963 over the same period.
- Homes purchased in the Wichita, KS housing market three years ago have appreciated, on average, by $17,323. The national average was $46,878 over the same period.
- Homes purchased in the Wichita, KS housing market five years ago have appreciated, on average, by $29,048. The national average was $82,353 over the same period.
- Homes purchased in the Wichita, KS housing market seven years ago have appreciated, on average, by $26,861. The national average was $77,054 over the same period.
- Homes purchased in the Wichita, KS housing market nine years ago have appreciated, on average, by $34,476. The national average was $31,126 over the same period.
While appreciation rates for the Wichita real estate market continued to improve in the first-half of 2016, the progression has yet to translate into added home equity gains. Homes purchase one year ago have appreciated by $4,055, as opposed to the national average which saw homes appreciate by $14,963. Price appreciation and principle payments in the last three years have boosted total equity growth since the recession, helping to benefit Wichita real estate investors and homeowners alike. The last nine years have produced modest home equity gains, but continue to fall short of the national average. The largest gains were earned in year seven, when homes appreciated by $34,476.
Another element of the Wichita real estate market to consider, especially for investors, are foreclosures. There were 526 properties in some stage of foreclosure during the month of December, according to RealtyTrac. The number of foreclosures in Wichita was 29 percent higher than the previous month and two percent higher than the same period last year. Bank owned real estate is another type of foreclosure that skyrocketed in 2016. The number for REO properties in Wichita increased 135.7 percent from the previous month, and 560 percent from the same period last year. That said, the explosion in foreclosures should also boost the popularity in Wichita real estate investing moving forward.
Wichita, KS Real Estate Market Summary:
- Current Median Home Price: $138,400
- 1-Year Appreciation Rate: 1.3%
- 3-Year Appreciation Rate: 8.3%
- Unemployment Rate: 4.9%
- 1-Year Job Growth Rate: 1.5%
- Population: 386,552
- Median Household Income: $45,907
Wichita, KS Real Estate Market (2016) — Q2 Updates:
The Wichita real estate market continued to make positive headway in 2016. The median home price was $138,400 in the second quarter, with one-year and three-year appreciation rates of 1.3 percent and 8.3 percent. In comparison, the national average had a median home price of $239,167, with one-year and three-year appreciation rates of 4.9 percent and 17.8 percent. Although lower than the rest of the country, the Wichita real estate market continued to experience positive gains in the first six-months of 2016.
Home affordability continued to benefit the Wichita housing market in the second quarter. Homeowners paid 6.1 percent of their income to mortgage payments, compared to15.8 percent paid by the national average. As a result, the Wichita real estate market is among the most affordability housing communities in the nation. Conversely, the rate of new housing construction took a stumble in the first-half. The current level of construction during the second quarter was 10.8 percent below the long-term average, while single-family housing permits dropped 0.7 percent. A reduction in construction will limit new supply to the market, which should allow demand to catch up with inventory quicker.
Another factor influencing the Wichita real estate market in 2016 was the local economy. Unemployment in the area remained on pace with the national average, reaching 4.9 percent in the second quarter. Employment didn’t fare as well, but one-year job growth settled at 1.5 percent in the second quarter, In comparison, the national average experienced a one-year job growth rate of 1.8 percent,with an unemployment rate of 4.9 percent.
According to the National Association of Realtors (NAR), the Wichita real estate market is forecasted to see weaker price growth in the next 12 months than the rest of the U.S. Home prices for Wichita real estate are predicted to grow by 3.4 percent, compared to the national average of 3.6 percent.