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Rising Home Values and Declining Ownership in Kansas City's River Market
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
River Market, a vibrant neighborhood in Kansas City, Missouri, known for its historic charm and bustling farmer's market, has experienced significant changes in its demographic and housing landscape over the past decade. Notable shifts in homeownership rates and housing prices have characterized this transformation. The homeownership rate in River Market has shown an overall declining trend from 2013 to 2022. In 2013, the neighborhood had a 20% homeownership rate, which decreased to 16% by 2022. This decline in homeownership coincided with a substantial increase in average home prices. The average home price in River Market rose from $168,146 in 2013 to $261,234 in 2022, representing a 55% increase over this period. This inverse relationship suggests that rising home prices may have contributed to the decreasing homeownership rates, as affordability became a growing concern for potential buyers.
Federal interest rates have played a role in shaping homeownership trends in River Market. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.11% to 0.40%. During this time, homeownership rates remained relatively stable, hovering around 18-20%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% by 2022, homeownership rates in River Market declined to 16%. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
The rental market in River Market has shown a strong upward trend in both the percentage of renters and average rent prices. The proportion of renters increased from 80% in 2013 to 84% in 2022. Correspondingly, average rent prices rose significantly, from $954 in 2013 to $1,335 in 2022, a 40% increase. This growth in the rental market can be attributed to various factors, including the neighborhood's growing population, which increased from 1,615 in 2013 to 2,660 in 2022, and the declining homeownership rates.
In 2023 and 2024, River Market continued to see growth in average home prices, reaching $267,835 in 2023 and $273,614 in 2024. This represents a steady increase from previous years, despite the significant rise in federal interest rates to 5.02% in 2023 and 5.33% in 2024. These high interest rates may impact future homeownership trends in the neighborhood.
Looking ahead, based on the observed trends and current market conditions, we can expect average home prices in River Market to continue rising, albeit at a potentially slower rate due to high interest rates. A five-year forecast suggests average home prices could reach around $300,000 by 2029. Average rent prices are also likely to continue their upward trajectory, potentially surpassing $1,600 per month within the next five years, driven by the neighborhood's growing population and strong rental demand.
In summary, River Market has experienced a notable decline in homeownership rates alongside substantial increases in both average home prices and rent prices over the past decade. The neighborhood's growing population, rising property values, and the interplay between federal interest rates and housing affordability have all contributed to these trends. As River Market continues to evolve, it's likely to remain a predominantly renter-occupied neighborhood with continued growth in housing costs.
