Wichita, Kansas
A Window of Opportunity Could be Closing in the “Air Capital of the World”
by Carole VanSickle Ellis
Wichita, Kansas, has been a destination from its inception. Located near the confluence of the Arkansas and Little Arkansas Rivers, Wichita is named for the Native American tribe that inhabited the area before Spanish explorer Francisco Vasquez de Coronado explored the area in the mid-1550s.
Ultimately, the region was acquired by the United States as part of the Louisiana Purchase, and traders began to flock to the area and build small log structures to serve as hotels, a post office, and, eventually, homes for permanent residents. By 1872, the city had been nicknamed “Cowtown” thanks to the many cattle drives that ended there when the herds were taken onto newly built railways, and it also emerged as an entertainment destination thanks to a proliferation of saloons and brothels combined with a dearth of law enforcement. By the late 1800s, Wichita was firmly on the map.
Today, of course, Wichita plays up other elements of the municipality than brothels and “light” legal adherence. The Wichita of 2024 proudly claims the title, “Air Capital of the World,” and the city is host to more modern business opportunities, including a vast aviation and aeronautical engineering sector, a substantial aircraft manufacturing sector, and a thriving healthcare industry.
Wichita is also the birthplace of a number of iconic fast-food restaurants, including White Castle, Pizza Hut, and Freddy’s Frozen Custard. Not surprisingly, however, the biggest points of pride for local chambers of commerce are the more than 115 aerospace and aerospace-related manufacturers, including Textron Aviation (Cessna and Beechcraft), Spirit AeroSystems, Bombardier Learjet, and Airbus.
The chamber also notes the presence of “a comprehensive network of over 450 precision machine shops, tool and die shops, and other aerospace subcontractors.”
A “Return to Old Normal”
The city’s strong economy is one factor contributing significantly to what Stan Longhofer, director for the Center for Real Estate at Wichita State University, describes as the market “coming full circle…to where we were 20 years ago [in 2004].” He argues that after the housing crisis and financial meltdown in the mid-2000s, the Great Recession and the COVID-19 pandemic wreaked havoc on traditional models and market behaviors. This had a wildly detrimental effect on home construction, which ultimately led to the outsized demand and appreciation experienced nationwide during the global pandemic.
For 2025, Longhofer and his research team predicted, “The broad theme…is something of a return to the old normal, and by that, I mean a place we haven’t been in maybe 20 years.”
Longhofer explained in his October 2024 forecast at Wichita State University, “It’s been a very unusual two decades.” He continued, describing the years following the financial crisis as “an absolute cratering of new-home construction” during which levels hit their lowest point since World War II. Despite pre-housing crash overbuilding, “[new-home construction in Wichita] never recovered,” Longhofer said. However, with the pandemic largely in the rearview mirror and, thus, no longer threatening the manufacturing bases in Wichita, a slightly softening housing inventory, and relatively affordable housing costs, the city is poised to be both attractive and affordable in 2025.
Unlike some markets where inventory volumes are rising so fast the appreciation from the past few years is at risk, in Wichita, it appears demand and a slow increase in listing volume are balancing each other out to keep home values strong. According to one local agent, this trend has been in the making for about 18 months already.
“The number of homes that are for sale has increased, but slowly,” he told local news outlet 12News. “Home values are still increasing.” Although home price gains were more modest in 2024 (8%) compared to previous years, which posted double-digit appreciation (11% in 2023 and 2022, nearly 15% in 2021), they remain solid and are expected to come close to these gains again in 2025.
With Low Home-Flipping Rates, Wichita Investors Focus on Buy-and-Hold
All this appreciation has not led to as much fix-and-flip activity in Wichita as one might expect. In fact, according to ATTOM Data’s report on flipping activity released in 2023, just 5% of transactions in Wichita were home flips. This is one of the lowest rates in the country. Real estate investors in the area today report profit margins “are lower now than five years ago,” as local landlord Mike Heldstab told NPR this past August.
Heldstab made headlines at the time for the longevity of his tenant relationships. Some have maintained leases with him for more than a decade. Heldstab’s model of rehabbing and then renting out properties often below market rate (a model he developed after finding the fix-and-flip model was not as effective as he had hoped) has worked for him, but he acknowledged he is also not currently raising rents as much as he said he “probably should,” explaining, “It’s tough for anyone to afford [rental rate increases] when their incomes maybe haven’t gone up.”
Rental availability, like housing availability in general, is somewhat precarious in the Wichita area. According to HUD’s October 2024 “Comprehensive Housing Market Analysis Wichita, KS,” the rental vacancy rate in the area is “balanced” at just over 10%, but rental rates are increasing along with demand.
HUD estimated there would be a demand for more than 3,100 new rental units in the coming year, but only 2,100 are currently under construction. For-sale housing inventory is likely to undergo starker shortages, with HUD estimating a pending demand for roughly 5,100 units and only 1,400 under construction.
Despite this, HUD analysts noted, “[Wichita] remains among the most affordable areas to buy a home in the nation.” The area remains the 59th most-affordable market in the country out of 241 areas ranked.
Local government is currently working with investors to incentivize the creation of new housing as well via the Wichita HOME Investments Partnerships Program and the Housing Development Loan Program (HDLP). These grants are intended to support development in areas classified as “idle or underutilized,” and may be applied to multifamily development, new construction of single-family residential options, and fix-and-flip projects for retail sale or rental. The program is designed to work with both individual investors and corporate entities.
An Opportunity for Access Could be Closing
In many ways, Wichita is a unique market because its strong economic base provides decades of relatively stable investment opportunities, but it remains, at present, affordable and accessible to new investors. The biggest stumbling block will likely be acquiring or building investment inventory as demand continues to rise. Thanks to the aerospace engineering and manufacturing industries, the presence of multiple colleges and universities in the area, and a host of employers ready to hire young professionals and recent graduates, the area is poised for growth in 2025 and beyond.
If Longhofer is right about Wichita’s “return to an old normal,” that could be great news for real estate investors who have acquired assets in the area prior to that return. However, the window is likely closing when it comes to easy access in this market.
As prices continue to rise and demand appears poised to once again outstrip available inventory, investors who have acquired and converted existing inventory to new, attractive units will thrive in the Wichita market.
SIDEBAR
By the Numbers
115 — number of companies involved in the production of aviation-related parts in the Wichita metro area (HUD)
450 — number of precision machine shops, tool and die shops, and other aerospace subcontract manufacturers in the Wichita area (Wichita.gov)
18 — number of Boeing-certified gold and silver suppliers within a 200-mile radius of Wichita (Wichita.gov)
69% — Amount Wichita home prices have risen since 2019 (SmartAsset)
1,500 — number of graduates from the National Center for Aviation Training and Wichita State University’s Innovation Campus each year
1 — ranked as “most manufacturing specialized region in the U.S.” (the Brookings Institution)
35% — Greater Wichita delivers roughly 35% of all general aviation planes built in the United States (Wichita.gov)
4 — “Top Cities to Move to in 2024” (Forbes)
98% — employment rate in Wichita (Forbes)
