Kansas City August 2020 Housing Market recap

5 Replies

Wow! August came and went so fast this year and homes are selling quicker than ever! Lets look at the numbers and decipher what exactly is happening in the market.

Amidst the approaching labor day, and unofficial end of summer, the number of sold homes slightly decreased from 4659 in July to 4000 in August. There is a direct correlation in listed homes though and those numbers fell also from 5459 in July to 5054 in August.

The average price per square foot has steadily been increasing since February, starting at $115 and shooting up to $129, a 12.2% increase in 6 months and up 9.3% from last year.

In August, the average days on market was 34 days. This is alarmingly short, especially considering all the homes that don't sell and aren't priced correctly are also factored in. Realistically, if a home is priced right for the market it will sell.

The August average sold price is appreciating. Both the average median sold price and the average sold price have increased by 11.1% and 12.9% since this time last year respectively. The average median sale price was $250K and the average sold was slightly higher at $289K. My speculation of this is due to new construction catching up to meet demand. Our KC builders are busy and new developments are filling up, as old developments are being completed.

The absorption rate based on closed sales is currently at 79.1% and 78.9% for pended sales. Here's a quick explanation of Absorption Rate as follows:

  1. Absorption Rate based on Closed Sales (%)

Absorption Rate based on Closed Sales (%) = the number of properties sold divided by the number of properties for sale (in percentage).

For instance, if there are 1,000 active listings and 100 of them sold in a given month, the rate of absorption would be 10%. 10% of the market is being sold in that given month.

  1. Absorption Rate based on Pended Sales (%)

Absorption Rate based on Pended Sales (%) = the number of properties pended divided by the number of properties for sale (in percentage).

Finally, the months of inventory based on closed and pended sales are at 1.3 months. Economists say that a balanced market is 6 months of inventory. We've had short supply of homes for years now and the historically low interest rates (which dropped well below 3% for the first time in more than half a century,) combined with low supply of homes and high demand all explain the significant price increases we've seen in this season. The 1.3 month inventory is .1 months higher than July's but that's equivalent to the Chiefs winning against the Texans with a score of 49 vs last month's hypothetical score of 52. It's super high and the difference is negligible.

That sums up this month's Kansas City Housing Market Update. Basically homes are selling quicker than Mahome's pass to Kelce for a TD. As we enter a new season, will the market cool down along with the weather or will it continue the unprecedented hot streak? Only time will tell.


Keep it up. Good summary. Thanks for taking the time to do it. Are you seeing a difference on MO vs KS side, or were you only talking about the KC, MO side?

Originally posted by @David Stewart :

Wow! August came and went so fast this year and homes are selling quicker than ever! Lets look at the numbers and decipher what exactly is happening in the market.

Amidst the approaching labor day, and unofficial end of summer, the number of sold homes slightly decreased from 4659 in July to 4000 in August. There is a direct correlation in listed homes though and those numbers fell also from 5459 in July to 5054 in August.

The average price per square foot has steadily been increasing since February, starting at $115 and shooting up to $129, a 12.2% increase in 6 months and up 9.3% from last year.

In August, the average days on market was 34 days. This is alarmingly short, especially considering all the homes that don't sell and aren't priced correctly are also factored in. Realistically, if a home is priced right for the market it will sell.

The August average sold price is appreciating. Both the average median sold price and the average sold price have increased by 11.1% and 12.9% since this time last year respectively. The average median sale price was $250K and the average sold was slightly higher at $289K. My speculation of this is due to new construction catching up to meet demand. Our KC builders are busy and new developments are filling up, as old developments are being completed.

The absorption rate based on closed sales is currently at 79.1% and 78.9% for pended sales. Here's a quick explanation of Absorption Rate as follows:

  1. Absorption Rate based on Closed Sales (%)

Absorption Rate based on Closed Sales (%) = the number of properties sold divided by the number of properties for sale (in percentage).

For instance, if there are 1,000 active listings and 100 of them sold in a given month, the rate of absorption would be 10%. 10% of the market is being sold in that given month.

  1. Absorption Rate based on Pended Sales (%)

Absorption Rate based on Pended Sales (%) = the number of properties pended divided by the number of properties for sale (in percentage).

Finally, the months of inventory based on closed and pended sales are at 1.3 months. Economists say that a balanced market is 6 months of inventory. We've had short supply of homes for years now and the historically low interest rates (which dropped well below 3% for the first time in more than half a century,) combined with low supply of homes and high demand all explain the significant price increases we've seen in this season. The 1.3 month inventory is .1 months higher than July's but that's equivalent to the Chiefs winning against the Texans with a score of 49 vs last month's hypothetical score of 52. It's super high and the difference is negligible.

That sums up this month's Kansas City Housing Market Update. Basically homes are selling quicker than Mahome's pass to Kelce for a TD. As we enter a new season, will the market cool down along with the weather or will it continue the unprecedented hot streak? Only time will tell.


Thanks David! Nice write up. Is this only for SFH homes are is this for investment sales as well? KC is hot on the investment sales side and I believe that Q4 is going to be s fast moving quarter. Deals are going to start to pop out.