Real estate markets have been a whirlwind nationwide during 2021 and 2022. With an increase in remote work, a massive influx of Millennial buyers entering the real estate market, the lowest mortgage rates in over 30 years, and other contributing factors, there has never been a greater demand for quality real estate. This, combined with record-low housing inventory nationwide, homebuyers experienced the most competitive real estate market in recent history. Overland Park is also an area that has experienced a real estate market boom.
With a strong local economy and affordable real estate compared to many other areas of the country, Overland Park has become one of Kansas’ most highly-sought after real estate markets. While the local market has remained strong over the last couple of years, many local buyers and sellers are wondering one thing: will this trend continue into 2023? Here is what you can expect from the Overland Park housing market in 2023 and beyond.
An overview of Overland Park’s 2022 real estate trends
In recent years, Overland Park has become quite the shining star in Kansas City’s real estate market. Located just 25 minutes from Downtown Kansas City, Overland Park is an affluent, southeastern suburb where the median household income is around $90,000. Considered one of Kansas’ most desirable real estate markets, home values keep increasing in Overland Park. The median home price in Overland Park is just over $405,300 as of September 2022, which is an 8.1% increase from the previous year. Depending on the size of the prospective home buyers are looking for, buyers searching homes for sale in Overland Park, KS have found real estate prices increasing from 2021 to 2022, with prices increasing anywhere from 8.1 to 20.4%.
This is due to many factors, including a strong local economy, record-low interest rates, and a steady population increase of around 1.22% in the last year. Yet, many buyers and sellers are wondering whether or not this trend will continue coming into 2023. Will the real estate market remain red-hot, or will it crash?
Will interest rates or other factors impact the local market?
Of the many factors that contributed to the 2021/2022 real estate spike nationwide, one of the key features was record-low mortgage rates. In January 2021, interest rates decreased to an unprecedented 2.65%, which is the lowest rates have been in over 30+ years. Interest rates managed to stay low throughout 2021 and the first half of 2022 until they increased to over 6.0% or higher during the Fall of 2022, which is the highest they have been since 2008.
With such a drastic increase in interest rates in such a short period of time, many buyers and sellers are wondering what this will mean for Overland Park’s real estate market. Will there be a massive decrease in market activity? Will there be a major decrease in home values as a result? This, combined with an upcoming recession, some homeowners fear we are about to experience another housing crisis similar to 2008.
While there are striking parallels between our current economic climate and the housing crash of 2008, the two situations are completely opposite. While we are currently in a recession, this recession is atypical compared to other recessions we have had in the past. The current recession is due to many contributing factors, including 40-year high inflation rates, a labor shortage, decreased supply chains, and other factors. The 2008 housing crash, on the other hand, was a result of cheap credit and lax lending practices, which resulted in too many underqualified buyers being approved for home loans, which resulted in millions of homes going into default. As a result, it is highly unlikely Overland Park will experience a housing crash in 2023 or the coming years.
While interest rates can paint a picture of what the upcoming real estate market may look like, they don’t tell a complete story. Other things to take into consideration include the local economy and demographics. Of the many reasons why Overland Park is one of Kansas’ most desirable places to live, the local economy plays a major role. With an unemployment rate of just 3.0%, Overland Park has one of the lowest unemployment rates in the region. With a national average of 6.0% unemployment, Overland Park has an incredibly healthy local economy with great job prospects. Going one step further, Overland Park also has an outstanding outlook on future employment opportunities. Overland Park’s projected future job growth rate over the next ten years comes in at 35.5%, which is higher than the national average, which is 33.5%.
Along with a healthy local economy demographics play a major role in the health of a local economy. Overland Park has a steady population growth of around 1.22% annually, which is ideal for a healthy local real estate market. With a healthy local economy, there will also be a massive influx of Millennial buyers who move to the area. Accounting for over 43% of new buyers in 2022, they are one of the largest demographics currently purchasing real estate. They are also one of the largest generations currently alive. As more and more Millennials continue to enter the real estate market, the demand for real estate will remain high, which will keep Overland Park’s property values high.
What to expect in 2023
Taking all of these factors into consideration, many Overland Park buyers and sellers wonder what is in store for them in the upcoming years. Is Overland Park real estate a sound investment? Will property values remain stable or increase throughout the year? Even with increased interest rates, the demand for property is likely to remain high since Overland Park has such a healthy local economy, with more and more prospective buyers relocating to the area. As a result, there has never been a better time to buy or sell real estate in Overland Park.
Are you interested in Overland Park homes for sale? Searching for Overland Park investment properties? Whether you are buying, selling, or investing, trust The M Group to help you achieve your real estate goals. Contact us today for your free consultation.
