Engel & Völkers: In the Heart of America

Engel & Völkers Trend Report

In the Heart of America

Table of Contents

Ozark Mountains Northwest Arkansas

Introduction

The national real estate market has been in a continuous state of flux over the past two and a half years. People fled cities in 2020 for more indoor and outdoor space and to be closer to families, buying up real estate in the nation’s suburbs and rural areas. While some groups of buyers have returned to cities, we’re now in the midst of a national housing market that is cooling after months of record high prices and low inventory, with many prospective buyers taking advantage of continued remote work practices to live where they want and not necessarily where they work.

As a result, many buyers who want to maintain a slower pace of life, be closer to family, have access to certain outdoor amenities, or who have been priced out of coastal markets are turning inward and looking to buy in the heart of America.

Fountain in Mill Creek Park Kansas City, Missouri

Nestled in the middle of the U.S., far from the shores and international borders, we’ve spotlighted eight emerging real estate markets rich in opportunities and amenities:

Kansas City, Missouri & Kansas

Omaha, Nebraska Oklahoma City, Oklahoma

Des Moines, Iowa St. Louis, Missouri Tulsa, Oklahoma Little Rock, Arkansas Northwest Arkansas

These cities and towns are ranked among the best places to live in America and are drawing buyers predominantly from larger markets on the coasts and are boasting spacious homes, outdoor space, and a more relaxed way of life.

At the same time, global companies are establishing their presence in these markets, fostering economic growth. Burgeoning arts and culinary scenes and world-renowned museums are creating the cultural and

lifestyle amenities that coastal buyers still seek out, amidst the parks, lakes, and ample outdoor space, and recreation opportunities that characterize these less densely populated regions of the U.S. boasting beautiful real estate.

From Des Moines to Little Rock and Omaha to Oklahoma City, real estate in the heart of America stands at a distinct moment of opportunity as consumer preferences evolve and realign in the current environment.

Northwest Arkansas

Market Snapshot

Northwest Arkansas refers to five metro areas located in Benton and Washington Counties: Bella Vista, Bentonville, Fayetteville, Rogers, and Springdale. It is one of the fastest-growing economies in the U.S., home to three Fortune 500 companies and numerous other businesses and startups eager to build their teams and infrastructure in a comparatively low-cost market.

The region has experienced 24.2% population growth since 2010 and has been ranked nationally several times over as one of the best places for both living and doing business, coming in at #4 on U.S. News & World Report’s 2021-2022 list of “Best Places to Live.”1 With this population and economic growth, home prices have increased 20.4% year over year since 2021 and 54.8% since 2020 to reach $500,000 this year, based on MLS data.

Ranked #4 on U.S. News & World Report’s 2021-2022 list of “Best Places to Live.”1

1 Andrew DeMillo, U.S. News & World Report, August

2021

Luxury Buyer Profile

Corporate job opportunities and cultural amenities like the Crystal Bridges Museum of American Art are increasingly attracting a global audience to Northwest Arkansas.

The region has also experienced an influx of remote workers relocating from California, Colorado, and Texas, increasing demand for housing that is walkable or bikeable to restaurants, nightlife, shopping, and entertainment. Demand

from these buyers for second homes and investment properties has also increased dramatically.

Transplants are drawn to the area’s equally compelling economic and lifestyle opportunities, the natural beauty of the Ozark Mountains, world-class museums, a legitimate food and beer scene, and Bentonville’s distinction as the mountain biking capital of the world.

Area Employers:

Crystal Bridges Museum of American Art

On

Little Rock, Arkansas

Market Snapshot

In addition to Little Rock proper, this region of Central Arkansas also includes the communities of Cabot, Conway, Benton, Bryant, Jacksonville, Maumelle, and North Little Rock/Sherwood. As in other areas of the country, prices have increased with high buyer demand and low inventory across all price points. However, Little Rock remains comparatively affordable. According to the MLS, home prices were up 17.6% year over year in June 2022, with a median price of $255,000, while the median price of homes sold in the U.S. in 2022 is $428,700. 2

Real estate here is appreciating in value and does not experience the extreme ups and downs that may impact markets in other areas of the country, appealing to both current residents and out-of-state investors.

Luxury Buyer Profile

As in other heartland markets, Little Rock draws buyers from larger, more expensive cities looking for a lower cost of living and easier access to outdoor amenities such as parks, rivers, lakes, golf, tennis, and biking. Luxury buyers are especially attracted to the area’s easy access to air

travel and short flights to major cities to accommodate remote work scenarios and regular business travel. Buyers here are looking to enjoy a slower pace of life without compromising on a big city’s amenities, as Little Rock offers highly rated medical care, arts, and dining.

Area Employers:

On the Market:

Market Snapshot

The housing market in Des Moines was experiencing significant growth even before the housing boom that gripped the nation in 2020. This growth has continued, with the median home price increasing 7.3% year over year to reach $188,026 in September 2022. 3 It is also ranked the 14th best place to live in 2022-2023 by U.S. News and World Report, based on factors such as affordability, quality of life, and job opportunities. 4 As with other heartland markets, Des Moines is offering a refuge for coastal buyers at a fraction of the cost, with the opportunity for significant growth in the coming years.

Des Moines, Iowa 3.1% of homebuyers in Des Moines last year moved to the area from out of state, largely from Chicago and the coasts.

Luxury Buyer Profile

Over the last year, 3.1% of buyers in Des Moines moved to the area from out of state. 5 Des Moines has become an enclave for entrepreneurial startups as well as established corporate employers, attracting new residents for growing employment opportunities. The development of the metro area has given rise to a robust local arts scene, theater,

live music, and bars and restaurants, offering buyers the convenience and enjoyment of big city amenities at a lower cost of living and with equal access to outdoor parks, gardens and recreational activities, like the renowned Iowa State Fair.

Area Employers:

11246 Twilight Drive

Sold Price: $1,006,000

On the Market:

1917 Redbud Street

Sold Price: $910,000

3653 NW 177th Court

Sold Price: $1,090,000

Market Snapshot

In the greater Kansas City metro area, spanning across the Kansas/Missouri state line, home values have appreciated 102% over the last decade. 6 According to MLS data, in the last year alone, the median home price throughout the Kansas City Metro has reached $315,000.

While home prices are currently at their highest level in years, they remain below the national median home price, and with market growth expected to continue, the opportunity remains for both buyers and real estate investors. Inventory is varied, offering buyers everything from a small loft located in the heart of downtown to large homes on multiple acres further outside of the city.

6

Santarelli,

Kansas City, Kansas and Missouri Despite a 102% appreciation in home values over the last decade, home prices in Kansas City remain below the national median home price.

Luxury Buyer Profile

Kansas City has experienced an influx of millennials coming from the coasts as well as major midwest metro areas. These buyers are drawn to the city’s many amenities,including public parks, outdoor gardens, hiking trails,museums, professional sports culture, breweries,

and barbecue at a lower cost of living. These offerings have cultivated a metro area that is equal parts history, innovation, and creativity, spawning a community of many small, local and independent businesses and artists.

Area Employers:

Meta Data Facility

17655 W 94th Street

Lenexa, Kansas

List Price: $1,450,000

On the Market:

1717 SW River Run Drive

Lee’s Summit, Missouri

List Price: $749,550

1820 SW River Run Drive

Lee’s Summit, Missouri

List Price: $769,900

Omaha, Nebraska

Market Snapshot

Another market on the rise, Omaha has seen its median home prices rise nearly $100,000 since 2016.7 Omaha has a homeownership rate of 58.3%, ranking above the national average. 8 It is one of the top 30 places to live according to U.S. News and World Report’s 2022-2023 ranking based on the cost of living, quality of life, and job prospects.

in

values from June 2021 to June 2022 maintains Omaha’s relatively low median sales price of $265,000 USD.

Anderson, KETV Omaha, March 2, 2022

States Census Bureau,

Luxury Buyer Profile

As the home to five Fortune 500 companies and a budding number of technology startups, Omaha continues to attract both global and domestic residents, largely coming from the West Coast, Illinois, and Texas. The unemployment rate is comparatively low, at only 2.1% as of May 2022.10 At the same time, Omaha remains

an attractive location for raising a family, offering not only abundant job opportunities but also housing affordability, a low crime rate, and highly ranked schools, amidst a thriving farm-to-table restaurant scene and many local breweries.

Area Employers:

Oklahoma City, Oklahoma

Market Snapshot

A growing cosmopolitan center with a burgeoning food scene, strong economy, and highly rated schools is making Oklahoma City an increasingly desirable market that has experienced 48.25% price growth since 2018. While inventory may be low, rising interest rates have cooled some buyers, and a dollar will still buy residents a lot more “house” when compared to the national market.

Home values are also increasing, with the median home price up 14.6% year-over-year to reach $267,000 in June 2022, according to MLS data.

A 48.25% increase in home prices since 2018 has been fueled by Oklahoma City’s growing cosmopolitan center.

Luxury Buyer Profile

Migration from the coasts is drawing investors and buyers looking for second homes to Oklahoma City’s real estate market. These buyers are often looking for multimilliondollar homes from which to run their businesses affordably amidst easy, spacious living. Many remote workers are also moving back to the area or coming for the first time

to settle in a safe, affordable, and family-friendly market. Luxury buyers have their pick of home and lifestyle here, with the market offering everything from ranches and lake view properties to luxury golf club communities and downtown historic gems.

Area Employers:

3201 E Hefner Road

Sold Price: $3,870,000

On the Market:

3310 Oakdale Forest Road

Sold Price: $1,575,000

2009 Catalina Drive

Sold Price: $2,350,000

Market Snapshot

Over the past two years, the St. Louis housing market has experienced dramatic price increases amidst extremely low inventory levels. However, currently, St. Louis County is on the upswing for home values and inventory, as is St. Charles County at a slightly lower price point. While inventory is opening up quite rapidly, prices are still continuing to rise but at a slower pace. New builds tend to be rare, save for the outer reaches of St. Charles County.

St. Louis, Missouri Nearly 20% of St. Louis’s population is over the age of 65.

Luxury Buyer Profile

St. Louis tends to draw its luxury buyers from other parts of the Midwest, in large part due to the area’s steady job market and employment opportunities in the services, financial, and medical sectors, as well as oldline manufacturers like Anheuser Busch. It remains one of the most affordable luxury markets in the U.S. while

offering the benefits of accessible higher education and medical centers, as well as significant resources invested in public spaces such as museums, parks, riverways, and camping. It is an aging market, with nearly 20% of the population aged over the age of 65, indicating a potential shift in the market as wealth transitions.11

Area Employers:

1017 Devonworth Manor Way

Sold Price:

12602

Sold Price:

Court

On the Market:

57 Sable Court

Sold Price: $1,049,989

Tulsa, Oklahoma

Market Snapshot

Like many other areas of the country, over the past two years, home prices in Tulsa have risen at a faster and higher pace than ever before and market absorption rates have shrunk to record lows. However, while the market remains strong, it is beginning to level off as buyer demand dips but prices remain stable. In fact, according to MLS data, in June 2022, Tulsa home prices were up 7.8% compared to last year, selling for a median price of $283,000.

increase in home prices from last year puts Tulsa’s median

price at

Luxury Buyer Profile

Buyers in Tulsa remain largely in-town, moving between neighborhoods; however, the market is seeing a notable increase in buyers coming from Colorado, California, and Texas. They are drawn to the low cost of living and affordable nature of Tulsa’s housing market, combined with a rapidly expanding offering of lifestyle activities.

These include a burgeoning arts district, nationally recognized parks, the largest concentration of man-made lakes in the country, Southern Hills Country Club, vibrant restaurants and nightlife, and high-end retail at Utica Square, Brookside, and Cherry Street.

Area Employers:

4920 E

Listing Price:

Street

On the Market:

Listing

11520 S Oswego Avenue

Sold Price: $1,500,000

Forest Park St. Louis, Missouri

©2022 Engel & Völkers Americas, Inc. All rights reserved. Each Engel & Völkers brokerage is independently owned and operated. Engel & Völkers is an Equal Opportunity Employer and fully supports the principles of the Fair Housing Act. This advertisement is not an offering. An offering can only be made by prospectus filed first with the Department of Law of the state of New York. Such filing does not constitute approval by the Department of Law. Additionally, depending on where you are located, an offering may require filing with your respective state authorities. Minnesota Registration Number: F-5339.