WICHITA, Kan. (KSNW) — Will the hot housing market stay hot? Wichita State University’s (WSU) Center for Real Estate released its annual housing forecast. The verdict? The market may be cooling off but by how much?

It has been a very unusual year — coming off the pandemic when stimulus checks and low-interest rates set the housing market on fire. This year those interest rates skyrocketed, bringing down housing affordability.

So the big question this year is when will the market balance out?

“It will take a number of years before the housing market actually fully corrects back to what we would consider a balanced market,” said Stan Longhofer, Director of WSU’s Center for Real Estate.

Between the high-interest rates and tight inventory WSU is predicting home sales will continue to decline.

“You can’t sell a home if there’s not a home available for sale,” Longhofer said. “We’re forecasting home sales to be down just under 5% in the Wichita area this year, and then to be essentially flat in 2023.”

While the demand eases, prices will continue to rise next year but not as much.

“We’re forecasting home price appreciation to slow down, an average for 2022 about 12-13%. Next year, we’re forecasting that that will slow down to a more normal pace, just under 5%,” he said.

The report covers the Wichita, Topeka, Kansas City, Lawrence, and Manhattan markets. Their predictions in the report are relatively similar across all of Kansas.

“We need to be building more homes across all of the markets in the state. Housing demand has outpaced the supply of new homes for 15 years,” he explained.

However, there are hurdles preventing that from happening.

“Labor market challenges, the difficulty of finding workers for the houses, the supply chain challenges, all of that has really escalated home price costs, and it’s made it difficult for new home construction to really take off the way it needs to,” Longhoffer said.

To read the full housing forecast, click here.