October 9, 2023

Kansas City 2Q23 Multifamily Market Insights Report: Vacancy tightens as absorption gains momentum

Highlights:

Property performance metrics in the Kansas City multifamily market were mixed during the second quarter, as rents inched lower even as vacancy conditions tightened.
Area vacancy tightened a bit during the second quarter, after trending higher in the previous six months. The vacancy rate declined by 20 basis points in the last three months to 5.3%. Year over year, vacancy ticked higher by 10 basis points.
Asking rents dipped in recent months, offsetting some of the rent growth posted in the first three months of the year. Rents in Kansas City fell 0.3% in the second quarter to $1,165 per month but are still up 4.7% from one year ago.
Sales velocity fell 14% from the first quarter to the second quarter, with Class C properties accounting for the bulk of the transactions. The changing property mix that has been sold has resulted in a sharp price decline, following a spike in 2022. Cap rates rose nearly 50 basis points in the second quarter.