K.C. Stats [Download PDF]
An $850 million entertainment district spanning nine blocks forms the heart Kansas City, Mo.'s revitalization. When H&R Block Inc. relocated its headquarters 30 blocks north two years ago, it kicked off the redevelopment plans upon which city officials have pegged their hopes for the future of downtown.
A local CB Richard Ellis Inc. broker, Larry Larsen anticipates the number of residents downtown to grow from roughly 16,000 at present to 24,000 by 2010. The downtown area currently suffers from an apartment shortage, with 10,500 housing units, both owner-occupied and rental properties. Units currently under construction total approximately 1,000, with an additional 2,700 on the immediate drawing board. Rents are on the rise, with popularity being seen about for-sale condos in the $175,000 to $300,000 price range.
But are these bright spots in the market enough to justify big builder investment?
Affordable Front Line
Sales remain sluggish in the Kansas City metropolitan area, with existing-home inventory continuing to feel pricing pressure. The median existing-home price stood at $153,200 in 2007, according to Hanley Wood Market Intelligence (HWMI), but 2008 is expected to see a decrease of roughly 3 percent to $148,600. On the bright side, 2007's affordability level of 67.2 percent is expected to post an increase to 68.5 percent in 2008. Though 2008 will continue to present a soft housing market, the lapse in construction activity promises to lower inventory levels, allowing demand to catch up with supply.
Population continues to increase, with annual gains of 1.2 percent thanks to positive net-migration trends. Yet HWMI points out that relatively slow economic growth on the local level could contribute to a slackening of current demographic trends. But with a per capita income above national and state levels, the Kansas City metro should witness somewhat steady growth in the near-term.
Wow'd By Wireless
Sprint Nextel Corp. will partner with Clearwire Corp. to link their wireless broadband businesses in a $14.5 billion communications company, Clearwire. The first coast-to-coast mobile WiMAX network, the service is expected to provide remarkably swift Internet connectability for both stable and mobile sources, serving an estimated 120 million to 140 million users in the U.S. by year-end 2010.
Several big-name players have been identified as investors in the venture by HWMI, including Comcast Corp., Time Warner Cable Inc., Intel Corp., Google Inc., and more–for a combined interest of $3.2 billion, with Sprint Nextel expected to retain 51 percent ownership of Clearwire. As the city's largest employer, the promising new venture should contribute greatly to Sprint Nextel's rebound in the face of recent struggles with subscriber losses.
While the performance outlook for Kansas City remains moderate, this joint venture should boost employment growth and solidify marked gains for the area in both the short and long term.
Learn more about markets featured in this article: Kansas City, MO.