Kansas City, Missouri – The Kansas City, Missouri, real estate market has shown amazing resilience and expansion in a period of unheard-of financial turmoil. A new Zillow analysis on Thursday shows that from the start of the pandemic five years ago, Kansas City’s property values rose by 46.6%. This notable spike in property values reflects a national trend in which house prices have increased much faster in the past half-decade than in the past 10 years taken together.
The Zillow report highlights that the national average increase in home values stands at 45% since early 2020, with nearly a million more homes across the country now valued at or above the $1 million mark. Slightly above national average, Kansas City’s increase highlights the strong demand and changing market conditions there.
Interestingly, the architecture of what $1 million buys in Kansas City has changed as well. A house of 4,411 square feet might be had for $1 million in January 2020. Fast forward to January 2025, and the average size of a similarly priced home has decreased to 3,736 square feet. This about 675 square foot decrease in size reflects the rising property values and the premium real estate in prominent metro locations.
The trend isn’t just limited to sale prices. Kansas City’s rental rates have also seen a significant increase—38.2% over the same period. This shows a rising metro housing demand driven by elements including a search for more roomy living quarters following the pandemic.
According to Orphe Divounguy, a senior economist at Zillow, the reasons behind this surge are multifaceted.
“A perfect cocktail of lower mortgage rates, higher savings and a growing desire for space drove housing demand to new heights during the pandemic,” senior economist at Zillow, Orphe Divounguy, said in the report. “Just about every major market experienced price growth far above what they’d become accustomed to, resetting the financial bar for homeownership.”
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Another interesting find from the Zillow report is the shift in how potential homebuyers are exploring property listings. With technological advancements, online tools have become more critical in the home shopping process. The report notes that today, seven out of ten buyers prefer 3D tours to get a better feel of the property, up from 52% in 2019. Additionally, there is a significant demand for more listings to include 3D tours, with 62% of buyers expressing this preference, up from 46% five years ago.
While Kansas City leads with one of the highest increases, other major metro areas have also seen notable growth. Miami, for example, has experienced the most substantial rise in both home values and rent. Meanwhile, Austin displayed the highest year-over-year growth at 40.3% until August 2021, before facing a decline due to rising mortgage rates and a surge in new construction projects.
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As the real estate market continues to evolve, the insights provided by the Zillow report underscore the dynamic nature of property investment and the shifting preferences of home buyers in a post-pandemic world.
