Rural Missouri towns hit by ‘crazy’ spikes in housing prices, hurting longtime residents
The COVID-19 pandemic has sparked high housing prices all across the country in places long insulated from them. Remote, rural towns where real estate prices remained low for decades are now seeing unprecedented price spikes, which are compounding problems for the rural poor.
For years the run-up in housing prices skipped vast stretches of so-called flyover country. Then came a run-up in home prices in places like Boise, Idaho, where they shot up nearly 50%. Now the pandemic has spread that price pressure all the way to places like Osceola, Missouri, a town of about 900 an hour outside the outskirts of Kansas City.
Osceola is smaller than it was a century ago, and home prices remained in the basement for decades. That, however, was before the pandemic hit. Now prices are up sharply, with some homes selling for more than 30% above what they were valued at as recently as this spring. And much of the buying power and interest in the Osceola real estate market is coming from far away.
On a recent morning, Stewart Kiefer Realtors on the square in Osceola was crowded with Californians. Two couples and a widower, all related and all looking to make a move from the high desert between Palm Springs and Los Angeles to rural Missouri.
Craig Yoder, who was there with his two sisters and their husbands, said they wield substantial buying power here.
"We have three good incomes and three properties that we can sell in California," Yoder said. "I own my house outright. So it's pure profit and the prices have gone crazy."
Yoder, who like his sisters is approaching retirement age, said that California had become too expensive and, for them, too liberal. His brother-in-law, Robert Velasquez, said they’re joining an exodus out of the Golden State.
“Arizona, Nevada, but everybody right now that's leaving California is influxing those nearby states that are more conservative, even as far east as Texas,” Velasquez said. “So we're thinking, okay, we're getting a little bit further out.”
It’s buyers like Velasquez who are helping to drive a surge in housing prices in places where real estate markets have been flat for years, sometimes decades.
Daryl Fairweather, an economist with the real estate brokerage Redfin, said Americans are moving to rural areas for lots of reasons, including climate change, politics and lifestyle issues. But the big driver, she said, is the ability to work from home.
“People are moving towards places that are more affordable because of remote work that they wouldn’t have considered before,” Fairweather said. “I'm actually part of this trend. I moved from Seattle, which had been seeing price growth for quite some time to a rural part of Wisconsin.”
Fairweather moved to Williams Bay, Wisconsin, a town of about 2,600 about an hour from Kenosha. She said prices there have spiked about 20% in the last year.
The rise in rural property values can vary dramatically from region to region and town to town. In St. Clair County, where Osceola is located, some rural homes are listed for more than double their estimated value from earlier this year.
Zillow economist Alexandra Lee said prices of rural homes are up around 16% on average, and in many places, it’s the first price spike in anyone’s memory.
“I think that might especially feel momentous in a rural area where home values are lower, where incomes are generally lower, (they’re) suddenly seeing a run-up on par with prices in metropolitan areas,” Lee said.
That city-style price jump can fall hardest on people like Misty Ketner, a mother of three who works at the Amish Trading Post, a combination restaurant, gas station and craft store near Osceola. Ketner said the housing crisis had split up her family.
“My daughter lives with my sister at the moment because I don't have a home. My two boys are living with my ex-husband and I'm staying with friends Because there's no houses,” Ketner said, tearing up.
Ketner doesn’t want to buy. She just wants to rent a place in a town where she’s lived for almost 20 years. Michelle Johnson, who manages the Sugarfoot Convenience Store and barbeque restaurant in Osceola, said Ketner’s struggle is a familiar one and hurts businesses that lose good workers.
“Finding them housing in this town is incredibly difficult,” Johnson said. “Then if they can’t find housing here, they’re going to move on and probably not continue to be an employee here.”
Fairweather, of Redfin, said rural rents will likely keep rising next year, but the unprecedented surge of interest in remote rural real estate may be easing. She said that in the first quarter of this year, 31% of people looking for property on Redfin were searching outside their metro area, a 5% jump from before the pandemic. Now she says that figure has dropped to 29%.
“Now things have equalized. And I think that's because the pandemic is subsiding. People are more eager to get back to cities and enjoy big-city amenities,” Fairweather said.
Even so, Fairweather expects rural home prices to keep climbing. And Robert Velasquez said he expects just the same, and acknowledged people like him are partly to blame.
“People like us coming out is why you got a shortage of homes,” Velasquez said. “Looking for a nice place to retire and get out of California. It’s getting real bad out there.”