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What to Consider When Buying Your Forever Home in Kansas City

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Kansas City is known for having one of the lowest median home prices in the country. In May 2021, the median price of an existing home in KC was $255,000, which was significantly lower than the national average of $350,300.

Housing prices in KC have been on the rise these last few months since the COVID-19 pandemic, but the city remains one of the most affordable markets in the US, which is why it continues to appeal to home buyers. If you’re one of those buyers, then expect to get a Kansas City home for a decent price.

Beyond house prices, however, you need to consider the other aspects of the location before making any big decisions, especially if you’re buying a forever home. Like with any other neighborhood, living in Kansas City has its pros and cons, after all.

1. Housing Market

Relatively low housing prices and interest rates are driving up the housing demand in the city, but the inventory isn’t enough to accommodate everyone. So expect heavy competition if you’re buying a house in Kansas City.

Stiff competition means acting fast

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A competitive housing market means properties sell fast — often in just a matter of days — giving you little time to ruminate on and compare the houses you’re interested in. So you need to be prepared to act quickly to secure your ideal forever home. This means your real estate agent and loan officer must also be ready to provide whatever services you need right when you need them.

Work with a realtor who can schedule tours and viewings of prospective homes as soon as possible. If you don’t act fast enough, the property will probably already have multiple offers when you see it, bumping its price up.

Additionally, maintain an open line of communication with your lender so they can write you a pre-approval letter for the specific house you want to put an offer on and immediately calculate the estimated monthly payments for that property.

Be ready to compromise

Searching for your dream home in a highly competitive housing market is incredibly difficult. Even if you find a property that ticks all your boxes, chances are that its starting bid is high or that it already has multiple offers.

Because of this, you need to be ready to make compromises on the features of the property you’re getting. Figure out your non-negotiables and where you can be flexible. For example, houses with less curb appeal are worth considering because they’re priced lower. Also, a home’s exterior is generally easier and cheaper to fix than the interior.

You should also expect some intense bidding wars, especially for the nicer properties. Determine what your highest competitive offer is to know when to back out of the bid.

2. Job Market

The job market in Kansas City is strong, with multiple thriving industries offering employment opportunities. According to the U.S. Bureau of Labor Statistics, the city had a 5.4 percent unemployment rate in June 2021, which is lower than the national rate of 5.9 percent.

The biggest industries in the city are agriculture, manufacturing, healthcare, and professional and technical services. Although, retail, construction, and hospitality also offer many full-time positions with competitive wages and benefits.

Some top employers in and around Kansas City are Koch Industries, Butler Transport, Dillons, and YRC Worldwide.

The only downside to Kansas City’s job market is its hourly wage of $26.21 (lower than the national average of $27.07). If you’ll be traveling out of the state often, then you’ll certainly feel the wage difference.

But if you’re planning to stay within the area, this lower rate should be offset by city’s low cost of living. It should go a long way toward helping minimize the impact of a lower income rate on your finances.

3. Taxes and Cost of Living

Relocating to Kansas means dealing with high tax burdens. A report by the 24/7 Wall St. shows that Kansas taxpayers spend about 9.5 percent of their annual income on state and local taxes, which is only a little below the national average of 9.8 percent.

Income Taxes in Kansas and Missouri

Kansas follows a progressive tax structure, with three income brackets that determine your tax rate.

$15,000 and below 3.10%

$15,000 – $30,000 5.25%

Over $30,000 5.70%

For married couples who are filing their taxes jointly, the lowest tax bracket is capped at $30,000 and the highest tax bracket starts at $60,000.

Missouri also has a progressive tax system, but with nine brackets.

$0 to $106 $0

$107 to $1,073 1.5% of the Missouri taxable income

$1,073 to $2,146 $16 plus 2.0% of excess over $1,073

$2,146 to $3,219 $37 plus 2.5% of excess over $2,146

$3,219 to $4,292 $64 plus 3.0% of excess over $3,219

$4,292 to $5,365 $96 plus 3.5% of excess over $4,292

$5,365 to $6,438 $134 plus 4.0% of excess over $5,365

$6,438 to $7,511 $177 plus 4.5% of excess over $6,438

$7,511 to $8,584 $225 plus 5.0% of excess over $7,511

Over $8,584 $279 plus 5.4% of excess over $8,584

Property Taxes in Kansas and Missouri

At 1.37 percent, Kansas also has a relatively high property tax rate — higher than the national average of 1.07 percent. Missouri, on the other hand, has an average effective property tax rate of 0.93 percent.

If you already have a job you’ll be transferring to in Kansas, you can input your salary in this paycheck calculator to determine your take-home pay after deducting state and federal taxes.

Cost of Living

Missouri and Kansas, luckily, are two of the cheapest states to live in in the country, with a cost of living index at 85.9 and 83.1 respectively. The costs of gas, groceries, and transportation in these states are below the national average. To put these figures into perspective, half a gallon of milk costs $1.87 in Missouri whereas it costs $2.48 in Kansas — significantly lower than the prices of their southernmost neighbors (over $3.00).

Apart from the affordable housing prices, the modest cost of living is what attracts home buyers to Kansas City. The affordable expenses help balance out the high tax burdens and below-average income of KC residents.

4. Weather Conditions

Kansas City has a generally humid climate. This means warm, humid summers and mild to chilly winters. South Kansas City has similar weather but with more precipitation.

The biggest drawback of living in Kansas City is that it’s in the middle of Tornado Alley. Kansas has seen an average of 88 tornadoes each year for the last 30 years and Missouri has an annual average of 45.

Being located in a disaster-prone city like Kansas City has direct and indirect implications on your finances. First, the potential property damage caused by tornadoes can reach thousands of dollars. Additionally, home insurance rates tend to be higher for properties in disaster-prone locations.

Insurers generally charge higher premiums in Kansas City because they see the houses in this location as riskier assets due to their vulnerability to damage. So, if you’re planning to relocate to KC, you need to be ready to pay for sufficient coverage to protect your home from natural disasters because underinsurance can lead to worse financial devastation.

5. Transportation

Kansas City is primarily a car-driven city. Although it has a functional public transit system, getting around the area is easier when driving, especially if you go outside the city frequently.

If you already own a vehicle, then transportation won’t be a problem for you. You’ll also enjoy the free travel Interstate 70 offers to those who live on both sides of it. This perk lets you drive to other states without having to pay tolls.

Although it’s primarily a car-friendly city, it doesn’t mean that the public commute is worse off. The public transportation in the city operates under RideKC, which offers buses, a free streetcar, and shared bike rides.

Commute time isn’t a problem in Kansas City either, unlike other big American cities. The average one-way commute in KC takes 21.8 minutes, which is shorter than the U.S. average of 26.4 minutes.

The main drawback here is that there are no trains or subways that go around the city. If you don’t have a means of private transportation but want the freedom to get around the city on your terms, you might want to look at used car options before relocating to KC.

Buying a Forever Home in Kansas City

Other than these five factors, you also want to consider the exact neighborhood you’re moving into. Is it near your workplace, a hospital, the school district, the grocery, and entertainment and leisure spots? These are the establishments you want to live in the vicinity of to make your day-to-day life easier and more convenient.

To find your ideal forever home in Kansas City, make sure to work with a real estate agent who’s knowledgeable and experienced in the city’s housing market. They’ll help you find a house that meets all your requirements and place a bid that’s high enough to secure you the property but still falls within your budget.

If you need assistance in buying your Kansas City forever home, look no further than Cami Jones & Company. We were named one of Kansas City’s top residential real estate agents and teams in 2018 by the Kansas City Business Journal.

With Cami Jones & Company, you can leverage our fearless negotiation skills and advanced market research strategies to find your ideal home. Expect a full-service home-buying experience that takes care of the entire process from beginning to end, from house-hunting and negotiations to bidding and closing.

Planning to buy relocate to Kansas City permanently? Call us at (913) 521-5584 or fill out our online form to book an appointment today.

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