Is Kansas City’s Low Housing Inventory beginning to shift?

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Each month, the Kansas City Regional Association of Realtors releases the monthly metrics for all housing activity in those counties covered in our local MLS database…and each month they reflect the change in housing inventory from the current month to same month last year.  That number is always relevant because we want to see if we have more homes on the market, less, or no change.  Why?  Inventory is, as you may well guess, a major factor in home values and is THE contributor to the massive appreciation of homes in the past years.

Since October of 2014, we have had double-digit decreases in inventory (month-after-month) when compared to the previous years.  For many months, we were seeing over 30% decreases.  So where we might have had 5000 homes sold in a given month, we dropped to 3500.  We have had 41 consecutive months of double-digit decreases…until this past May where we dropped under 10%….then June where we dropped to 6.7%.

Fast Stats June 2018 copy

For people who watch this carefully, this is a “hmmm” moment.  Some might think, “well this is summer and more homes are on the market in the summer”.  Remember, we have been losing ground on inventory for years now and all those years had summers too.  Another argument could be new build inventory starting to finally catch up statistically.  (See the permit report from the Home Builders Association of Greater KC) No doubt, new construction has had a month-over-month increases for some time now, but residential resale (on its own) went under 10% inventory reduction in June.

OK, so what does this mean and why does this matter anyway?  Two months hardly makes a trend, but when buyers are being squeezed out of the market due to rapidly increasing home price valuations, this is a bright spot for them.    I’ve said many times before, market extremes are not good for anyone and that certainly includes the housing market.   We would like for qualified buyers to find enough homes to get into and for sellers to have a healthy buyer pool simultaneously.  What I’m describing is a neutral market that favors neither the buyer or the seller.

We are a long way from a neutral market, but benchmarks that I’ve just described get my attention.  I’ll be watching carefully to see if this trend continues and you better believe I will have a post when we have our first positive change in monthly inventory.

Thanks so much,

Terry Jackson | Realtor at Domicile One Realty | 913-488-5623 | www.DomicileOne.com

 

 

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Posted in Domicile One Realty, KC Metro Home Buying, KC Metro Home Selling, KC Metro Real Estate Report

Kansas City’s Neighborhood Appeal Tops Survey with Recent Homebuyers.

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For years now, our real estate company ( Domicile One Realty)  has conducted surveys with buyer’s agents that have closed transactions in a variety of cities in the metro.  What we are trying to do is flesh out what is motivating buyers to purchase homes in those municipalities and garner some high-level information on the buyers themselves.  Information such as (1) Are they first time home buyers? (2)  Did they use any area down payment assistance programs? (3) Approximately what age were the buyers?

Why do we do this?  I believe it puts us ahead of the pack when it comes to understanding buyer motivation and that provides an extra level of service and insight to our seller clients.  It also gives us a local industry knowledge that we are happy to share with other Realtors and community stakeholders.

Over the years we have looked at area municipalities and have been pleased to see how school districts, chamber of commerce presidents, local businesses, etc have opened their doors to review this data and the insight it brings to their own mission.

We typically see a trend of pricing being a number one motivator of city selection with first -time home buyers typically the highest category of buyer between ages 25-35.

  • Typically only 1 out of 10 buyers participated in the MHDC Down Payment Assistance Programs.

Not too long ago, I ventured out to gather the same data in KCMO wondering if the trend would hold up.

Although pricing was still a very high consideration on reasons to purchase in KCMO, take a look at the City/Neighborhood Amenities category.  This was the #1 motivation of the buyers.   Although it doesn’t look like it topped the category with much, this was our first survey where this category had any real significance at all let alone overtaking pricing and proximity to work.

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Based on our survey responses, KCMO continued the trend of First-Time Home buyers making up the highest segment of the purchases with the 25-35 age bracket the largest category in age group.   Of those that responded, 70% of the buyers did not have school age children.

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One survey item is always a bit discouraging to me is the participation in the MHDC (Missouri Housing Development Commission) down payment assistance programs.   On average I see about 10%-15% participation based on the overall survey data.  Of course, I have no way of knowing if these first time buyers would have been eligible for the program, but it seems that with (1) the majority of buyers being price motivated, (2) first time home buyers, and (3)at a relatively young age in their careers, we might have seen higher participation.   This might speak more to the lack of awareness in the program than eligibility of the buyer.  If that is the case, we as Realtors need to do better in spreading the message of all options available to potential home buyers.

If you or your organization would like more information on this survey, please don’t hesitate to contact us.  As mentioned previously, we are always happy to share what we find and we’d welcome an opportunity to sit down and review the full survey data.

Best regards,

Terry Jackson | Managing Broker | www.DomicileOne.com | 913-488-5623 |

 

 

Posted in Domicile One Realty, Homebuyer Education KC Metro, KC Metro Home Buying, KC Metro Real Estate Report

KC Metro Q1 Market Video Summary

Hi everyone.  Check out the first quarter video summarizing the KC Metro Market Statistics.  Interesting that they predict two additional interest rate increases this year, but feel that our area wages plus low unemployment will have a minimal impact.

 

As always, we want to help if there is any questions you have or need us to stop by and discuss an upcoming sale or purchase.

Best regards,

Terry Jackson | Domicile One Realty | www.DomicileOne.com | 913-488-5623

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You’ve never needed a Buyer’s Agent more.

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Hi there, everyone.  I wanted to spend some time today sharing how vital it is to have a buyer’s agent working for you in our current KC Metro market.

Maybe you’ve heard, but we are in a seller’s market with not nearly as many homes on the market as we have buyers.  It shows no sign of changing anytime soon.  Buyer’s venturing out into this market will need professional, experienced buyer’s agents to assist them in their journey and ultimate purchase.  With the market tilted as it is, buyers are frustrated and exhausted when trying to get under contract.  In an article in the Kansas Star last year, they referred to our area as “inventory starved” the likes that we have not seen in years.

I’ve put together some of the many reasons you will want to have a Realtor by your side.

#1 — They have the experience to know if the home(s) you are looking for are a good fit for the loan you have your preapproval on.  This will save you needless expenses.

FHA loans (non-rennovation) will have appraisal issues regarding condition if the home is in poor condition.  (ex.  peeling paint, electrical wiring missing, etc.).  Homes in this condition are oftentimes sold in their present condition and, if the buyer won’t repair prior to closing, the loan won’t go through.

#2 — Your agent can preview a home for you freeing up your time.

This is so helpful as they know what your search criteria is and can check it out as the home comes on the market.  This frees up your time plus allows you to only see homes that you know will be meeting your list of wants.

#3 — Your agent can get some info on the seller’s motivation helping you craft an offer.

Do the sellers require a long escrow?  Need additional time to move?  Your agent can get the backstory on that for you allowing for you to (1) present yourself as willing to work to the needs of the seller and (2) craft that into your offer making you a more competitive candidate.

#4 — Coach a first-time buyer as to pace and offer requirements.

Just because a relative told you that they offered 10% less on a home back in the day to leave room for negotiations does not make it a good idea in today’s market.  Your agent will share sales comparisons in the area and the speed of sales in same area.  He or she will guide you on making an offer in this buyer’s competitive arena.

#5 — They will walk you through the timeline and costs associated with the purchase.

Your buyer’s agent will provide you with an estimated costs sheet so that you will have a good idea of what you will need to be bringing to the transaction.

Some first-time buyers are unaware that they will have costs beyond a down payment and the agent will provide that estimate for them.  This is critical for the buyer as they need to know what their obligations will be at the closing table and if they can meet them.  In a more balanced market, sellers might entertain helping the buyer out with their closing costs as part of the negotiation, but they are getting offers where that is not necessary.    With that, a buyer might not be ready to enter this market until they have those funds themselves.

 

Your buyer’s agent is a critical member of your team as you venture into this market.  They are your experienced professional, your coach, your support system.  They represent you and have a fiduciary duty to look out for your best interest.

If you are interested in buying or selling this summer, we would love to be one of the agents on your interview list.  We look forward to sharing our background, experience and client testimonials.

Our seller clients enjoy our sensible pricing of $3950 for the listing side plus 3% for the buyer’s agent.  Check out our website to learn more.

Take care,

Terry Jackson | Managing Broker | www.DomicileOne.com | 913-488-5623

 

 

 

 

 

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50th Anniversary of Fair Housing Act

 

 

Hi everyone.  Hope you are having a wonderful week.

Today is a significant day.  50 years ago the Fair Housing Act was enacted.

Most of my first time home buyers are so young, it would never occur to many of them that, when we happily go house hunting, there would have been a time that they could have been discriminated against in housing.  Could have been their race, their gender, their religious affiliation, the number of children they had, etc. ….and they would have had no legal recourse.

The National Association of Realtors has created a wonderful video about the history of this landmark legislation as well as how we must continually strive for inclusiveness.

Best regards,

Terry Jackson | Realtor at Domicile One Realty | www.DomicileOne.com | 913-488-5623

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2018 KC Metro Housing Forecast

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Hi there, everyone.  Thanks so much for taking the time to check out our post today.

I’m going to focus on the residential outlook for 2018 and the specific items that continue to drive our seller’s market.

Wichita State University’s Barton School of Business researched and published a concise overview of our KC Metro market.  This was through their Division of Real Estate.

Here are some takeaways from the report (Click to view the full 8 page report)

What drives buyers?  Good area employment opportunities and mortgage interest rates and both of these support the buyers right now.  Per their report, the employment growth in KC has outpaced the national rate over the last three years.  Couple that with 30 year fixed mortgage rates remaining attractive and we have lots of buyers interested in the housing market.

The buyer’s, however, run into a tight squeeze as home sales growth continues to decrease year over year.  This tight home inventory is the driving force behind that.    New home construction continues to increase and the report predicts an increase of 2% or 6005 units in 2018.  This is welcome news to be sure, but not nearly enough to neutralize this tight market.

To give you some perspective on how swift the market is right now, we are under 2 months of inventory in the KC Metro right now.  This means that it would take less than 2 months to sell all homes currently active based on rate of sales.  A neutral/balanced market would be at 6 months.

The WSU report has a wonderful graphic showing percentage of homes sold in the first 10 days.   From 2011-2015,  26.8% of homes were sold within the first 10 days of being listed.  In 2017, it was 46.9%.  This illustrates the competition that our buyers are facing when trying to get under contract.   This is particularly true of homes between 100K-250K per the report.

You can imagine what this does to home prices.  According to the report, home prices are up 23.8% since 2013 and are at their fastest pace since 2001.  The report predicts another 6.6% rise in prices in 2018.

If there is any additional info you need or questions we can help with, please don’t hesitate to contact us.

Terry Jackson | Domicile One Realty | www.DomicileOne.com | 913-488-5623

 

 

 

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Tips on Negotiating your Home Sale or Purchase

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Today’s topic covers home sale negotiations, some common scenarios and tips for your transaction.

As Realtors, we would like you to be as enthusiastic and excited at the closing table as you were on the original consultation, however, there are many steps between the two.  The types of negotiating styles of the various parties can be effective or an obstacle to overcome.

Unless a home is being sold as is, there are two negotiations on a real estate purchase.

  1. The first is the initial offer and terms such as closing date, earnest money, seller paid closing costs, etc.
  2. The second is the repair request negotiations based on a qualified inspector’s report.

The first negotiation oftentimes has influence on the latter.  Too much back and forth on the initial negotiation of price and terms results in (what I like to call) “negotiation fatigue”.  This emotional drain sometimes carries over into the inspection related repair negotiations that will occur less than two weeks later.

Know what market you are in.  In a strong seller’s market, the seller might have a backup offer or 5 others they passed over to sign yours.  I’m not saying take something that is unacceptable to you, but buyers need to cognizant that they have competition.

Most times, we see people who want to feel respected and treated fairly and they do likewise.  Other times, and it is rare, we encounter people that not only want to win, they just as passionately want others to lose.  An unfortunate mindset to be sure.  If you enter into a real estate transaction thinking that you will be getting everything you want, you will be in for a difficult road ahead and you may not make it to the finish line.  This mindset views the other party as an adversary.  To what degree depends upon the individual.  We aren’t saying that all transactions are hearts and flowers, but if you believe you must prevail at every turn, you will be disappointed in the outcome.

Tips for negotiating in a real estate purchases and sales:

  • No home is perfect….not even a new one.  Show some flexibility and be realistic.
  • Be cognizant of what type of market you are in.  We are in a strong sellers market and buyers cannot expect to submit pages of minimal repair requests.  The buyer’s agent is instrumental on counseling their clients in this regard.
  • Be clear on what items are deal breakers for you.  Prioritize your wants and needs.
  • Just because we are in a seller’s market does not mean the seller has to do nothing regarding repairs.  Unless the property is sold as is, the buyer is expecting some reasonable consideration on their repair requests.

In the end, you make the decisions on what will and will not work regarding negotiations.  Your real estate agent, however, has a fiduciary responsibility to you….the client.  They are working for you and their experience in the market, knowledge of property condition and area pricing will provide you with a fact-based negotiating strategy.   Utilize their expertise and counsel.

Thanks for taking the time to read the post.  Reach out to us with anything you need.

Best regards,

Terry Jackson | Realtor at Domicile One Realty | www.DomicileOne.com | 913-488-5623

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5 Quick Tips for Beginner Homebuyers

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Hello everyone.  Our Real Estate Brokerage, Domicile One Realty, was founded to support first time buyers.  We want to make certain our clients receive professional representation that exceeds all others with a strong focus on cost savings.

We don’t expect our clients to know the process A to Z.  That’s our job.  We do, however, want our clients informed of the process and costs so that they don’t have any surprises along the way.

Here are some quick tips for those considering a purchase.

— Find out if you are eligible for down payment assistance programs in your area.

Missouri has  great programs for first time buyers offering lowered interest rates, cash for down payment or participation in Federal Tax Credit on 25% of your annual mortgage interest.   Give us a call to see if you are eligible.

— Get pre approved.

Speak with a few lenders and see which is a good fit for you.  Ask them about their current rates and what their APR is as well.  The APR will give you a good feel as to their charges and fees as compared with other lenders.  Head’s up if you are eligible for Missouri assistance programs.  Not all lenders participate in these programs so make certain you ask them.  You can also give us a ring and we will direct you to the resources to find out.

— Start making a list of things that are important to you in your home.  Examples would be school district, square footage, whether you want a basement, how many bedrooms and baths, garage, etc.  Just keep brainstorming so you will have that ready when you meet with your buyer’s agent.  Have your “Top 5” list ready.

— Interview more than one buyer’s agent.

Talk with a few Realtors about their service offering.  We think of this quite a bit on the listing side of things, but buyers need to find that good fit as well.  This Realtor will be undertaking an important role in your journey.  Ask for resume, references, experience in the industry.  Pay attention to the speed of their call backs and email responses.  In this market, you need answers quickly and you will need a full-time agent that is responsive.

— You don’t have to do this alone.

Even when buyers might be purchasing a home for themselves, always feel free to bring along parents, significant others, friends, etc.  If there is an individual(s) whose opinion you value, by all means, invite them along on the home showings.  I’ve been a full-time agent for almost eight years now and friends and family are always welcome.  This should never be discouraged.

This is a short list of items to consider as you start your homebuyer’s journey.  This time of year, we usually start to see the home sales pick up and we’d love to sit down with you and be one of the agents you interview.    We are the only brokerage in Kansas City that specializes in first time home buyers and we bring a lot of experience and cost savings to the table.

Best regards,

Terry Jackson | Realtor at Domicile One Realty | www.DomicileOne.com | 913-488-5623

 

 

 

 

 

 

 

Posted in Domicile One Realty, Homebuyer Education KC Metro, KC Metro Home Buying | Tagged , , ,

I’m not buying or selling so why do I need a Realtor in my life?

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Sometimes when I reach out to contacts to see if they’d like to be on a newsletter or ongoing market report, they decide to pass because they aren’t currently in the market.  I make certain they know that having a Realtor in your life is valuable even when you are not actively in the market.  There are many, many compelling reasons to stay on those monthly e-newsletters and hang on to that fridge magnet.

#1 — You might have a family member or friend that needs some advice or brokerage services and you will have a referral at the ready.

#2 — Refinancing, getting a home equity loan, or removing PMI (Private Mortgage Insurance) from your monthly payment typically involve an appraisal from the lender.  If you aren’t happy about the number they come back with, we can help you with a detailed market valuation for your area.

#3 — County Tax appraisals come in each spring and, with the increase in home valuations, you might be considering appealing yours if you think it is too out of whack.  We can help arm you with relevant data to take to the county.

#4 — Your home is not just where you live, it is an asset and a big part of your net worth.  Stay current on this most important piggy bank.  If you are applying for other types of loans, you will want your current home valuation for your application.

#5 — First time buyers don’t always know what down payment programs are out there for them and, when it is time to look, you will be familiar with what is available to you.

#6 — We are a great resource for vendors!  Need an electrician, foundation bid, new driveway, roof, lender for refinance?  We can help.

#7 — If you are a business owner, consider inviting me to a staff meeting where I can share a quick 15 minute course for First-Time Home buyers.  Your employees will love you because, in many cases, you will save them thousands of dollars in down payment assistance money.

#8  — How methodical and predictable a Realtor reaches out to you is a glimpse into their professionalism and tenure.  Do you always know that you will get a card, calendar, sports schedule phone call or text on a regular basis?  That Realtor is organized and it is a good indicator as to how they will be in your transaction.  Also, if you’ve been seeing their notifications for years, it means that they have been an active Realtor for that many years.  We have quite a bit of turnover in this business and you are witnessing their longevity.

#9 —  Life changes and you never know when you will need one.  Unfortunately, not all change is positive we don’t always get to plan when we need to buy or sell.  Instead the decision has been made for us.  We help those going through divorce, death of a loved one, etc.

As always, we’d love to assist you with anything you need and if you’d like to be on our monthly e-newsletters, please contact us and we’d be happy to sign you up.

This will be our last blog post of 2017 and will pick it up again the first of January.  I hope you have been able to take some of the shared information and use it in your life or tuck it away for a time you might need it.  I so appreciate your taking the time out of your busy life to read these each week and feel free to share and forward to anyone you feel this might assist in their journey.

Wishing you all my best for a happy and safe holiday season.

Terry Jackson | Realtor at Domicile One Realty | www.DomicileOne.com | 913-488-5623

 

Posted in Domicile One Realty, KC Metro Home Buying, KC Metro Home Selling | Tagged , , , ,

KC Metro End-of-Year Housing Summary

Annual Sales by County

Hi there, everyone.  Another tremendous year for home valuations all across the KC Metro.  I’ve pulled sales data from 7 metro counties and compared the median sale prices and days on the market with 2016’s data.  Every single county exceeded the previous year’s sales prices and each saw reduced days on the market as well.  Click to view full report with all counties on my website.  In addition, I’ve got the city data broken out for Johnson and Jackson counties as well.

Johnson and Jackson Counties had about a 6% increase in sales prices, but Cass and Leavenworth brought in the highest gains with 11% and 9% respectively.

Top three Johnson County subdivisions in order by number of sales are as follows:

Havencroft in Olathe
South Hampton in Olathe
Leawood Estates in Leawood

Working with so many first-time buyer clients, I can tell you that this amazing seller’s market is not a favorable climate for them.  According to the National Association of Realtor’s forecast, we can see home valuations (nationwide) increase around 4.5% over the next two years then tapering off to 2.9% by year three.   Now a 4.5% increase is not going to have a go/no-go influence on a buyer on its own, however, other hurdles to buyers do exist such as student debt burdens increasing their debt-to-income percentages which reduce buying power.  In a market where home valuations increase in a manner that feels like bitcoin, you need the buying power to keep up.  In 2015, 15% of borrowers had an excess of $50,000 in student loan debt and this percentage has been steadily increasing since 2005.

A key factor in home sale prices increasing is the lack of supply.   Not enough homes for sale to meet the demand keeps those prices up and days on the market down.  If you are a regular reader, you know that I’m always searching for variables in our region as to why fewer homes are on the market and I stumbled upon an interesting topic. I recently read an article from the National Association of Realtors stating that homeowner’s “tenure” is higher.  The average amount of years a homeowner stayed in their home prior to resale used to be 7 years.  It is now at 10 years (and had been as high as 12).  So we can now add this to the “why so little supply?” list.  In addition, new home construction — although improving in our area — is lower than average (nationwide) and I still think we cannot rule out investment purchases for rental homes (in large scale) as a factor.

By no means are these the only variables to our KC Metro climate right now, but there are enough of them to paint a picture.  Increases to the home values coupled with the demands against a potential home buyers income (ex. student loan) will introduce an affordability issue with buyers.  Homes that were $135,000 in 2016 and jump to $150,000 in a single year push out potential home buyers.   This is why a neutral market is so much more beneficial for all.  Extreme sellers and buyers markets will correct, however, as neither is sustainable forever.

I believe that Domicile One Realty is looking at, and in many cases generating, these stats and trends much, much more than your typical agent.  I also believe that our pricing structure for listings and our commitment to finding as many cost savings for buyers is a unique mindset in the KC Metro Real Estate world not to mention a brokerage’s mission statement.   I strive to make our client costs savings a well-known fact in this area and this is not a gimmick.  Way too many first-time homebuyers do not know (because no Realtor has shared with them or didn’t know themselves) that they are eligible for down payment assistance programs.  That is thousands of dollars that they had to save or could have used somewhere else.   On the flip side, when a seller is charged thousands of dollars more using a commission model that is decades old, something is wrong there.  It is counter intuitive that some in the real estate community will tell clients that their home is the largest financial purchase they will ever make and then proceed to remove, in the way of commissions and fees, so much hard-won equity when it is time to sell.

If you’re thinking of buying or selling, we want to help.  We would love to be one of the Realtors you interview so that we can review our services, marketing commitment and how we will help you with cost savings.   Using the Johnson County median price as an example, we would save the seller $5428 in commission in one home alone.  Think about how you could use that savings.  Check out our website for more info.

If you would like more specific information for your area, please feel free to reach out to us.

Take care,

Terry Jackson  |  Domicile One Realty |  www.DomicileOne.com  | 913-488-5623

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