Kansas City Multifamily Outlook 2023+?

[Snehann Kapnadak]

Hi All,

Happy holidays! I'm curious to hear people's opinion on how the KC multifamily market will perform in 2023 and beyond. From the research I've been doing from out of state, the market is performing well and shows signs of being resilient in a recessionary environment: 

- Unemployment is ~2.7% which is below national averages

- Vacancy is low at 3.1% despite rents increasing 9.7% from last year 

- There's not a lot of new inventory coming on market (# of units grew only 1.9% this year) 

Combining all this with the fact that housing prices have increased, so that it's more unaffordable to buy a house at this time, bodes well for multifamily.

But what's it like to be actually in the market? Are multifamily leasing agents making a killing on commissions while realtors aren't doing so hot? Is it harder to find deals now since there's so little new construction?

I'm looking for a smaller multifamily (6-10 units), so this doesn't apply to me much, but cap rates have declined and are trading at 6s on average. I took these figures off a Q3 report, but was interested to hear what people who are in the market are experiencing. Any and all thoughts are much appreciated.