Rent keeps increasing in Wichita. Here’s what experts say is behind rising housing costs
Monthly rent costs in Wichita are steadily increasing each year, but are still low compared to markets across the country, according to local real estate experts.
According to a report released by NAI Martens, an area commercial real estate agency, late last year, rent rates in Wichita increased 1.8% in 2022 and 9.4% in 2021, which was the biggest jump in the last five years.
In 2020, rent rates only saw an increase of 0.4% due to the coronavirus pandemic. The big jump the following year was to “catch up” from the lower increase the year before, Jeff Englert, senior vice president of NAI Martens, said.
Englert said Wichita has a pretty steady trend of seeing a 3 to 4% increase every other year and a smaller increase the years in between.
The NAI Martens report splits apartments into three categories: class A, class B and class C.
Class A, which are premium apartments, saw the highest rate increase, with a rate change of about $50 to $100 more per month. Class B saw an increase of about $10 to $20 a month more and class C remained almost flat.
There are three main factors to the growth of rent prices, Englert said.
One is new premium apartments being added to the market that, in turn, bring up the overall median rent price. The second is apartments receiving updates, thus bringing the cost to live there higher, while the third is overall market increases in rent.
Stan Longhofer, Stephen L. Clark chair of real estate and finance in Wichita State University’s school of business, said there is currently not an index to see just how much the median rent prices have changed due to the increase of premium apartment buildings, but it is something to note when looking at price growth.
“What you really have to have there is to, you know, oh, for this apartment unit, you know, for this apartment complex, what were the rents that this had last year?” Longhofer said. “What are the rents it’s commanding this year? What is that change? And then you’ve got that true measure of apples to apples change.”
According to a report from Apartment List, median rent in Wichita is $726 for a one-bedroom and $953 for a two-bedroom. That same report indicates Wichita’s rent growth over the past year has been below the state average of 6%.
The NAI Martens report only includes apartments and not duplexes, which Englert said are seeing more popularity — and price increases — each year.
“One thing that’s kind of been the hot sector the last few years is the duplex market. There’s been more and more duplexes being built,” he said. “We’ve seen those rents increasing, maybe even a higher rate than we have on the apartments ... Even with so many being built, the rents increase and they’re still being leased up as soon as they’re built, so that’s been a pretty big impact on the rental market and growth there.”
Apartment List ranks Wichita at 97th for the most expensive of large cities in the U.S.
What experts say about 2023’s renting market
Englert said while he doesn’t have an official estimate, he expects this year’s market to pretty much stay on trend with what recent years.
“My guess is we’re going to go back to our norm of what we’re seeing, you know, a three and a half, four percent increase next year, and a more modest increase the next year,” he said.
While the market did see a high rent increase in 2021, he believes that jump is a one-time increase and the market is done catching up.
Longhofer said while he doesn’t have an official estimate on the rent rates this year, it’s expected to be a big year for development.
“We know that there is a large inventory of new units coming on the market this year,” Longhofer said. “There weren’t a lot of units added this last year, but that was due to ... supply chain issues and so forth. So they estimated only about 200 units that came on the market last year in 2022. In 2023, they’re forecasting that just under 800 units will come on the market.”
