This past year and a half has been so crazy for our local real estate market. Just a runaway for the sellers. If you look at the sales data today, there is no doubt that the sellers are still running the board. Still, I’m starting to see the tiniest signs of change.
Example #1 — The pace of sales is declining. Only by the tiniest increments in our metro area, but that is the direction it is heading. Granted, if it continued at this rate, we’d still be in a seller’s market for another year or more, but maybe it won’t be the insane pace it is today. How would this look in practical terms? Buyers might be able to think about it for a day or two! Buyers might be able to get a second showing with friends and relatives! They still might have competition on their offer, but they might get some additional time. That is something they don’t get much of now.
Example #2 — The builders are back. New residential single-family housing permits continue to trend up. The Home Builders Association of Kansas City’s August report includes an article showing that single family home permits are up 10% over last year.
With supply increasing year over year, this can only help our beleaguered buyers.
Example #3 — Some buyers are hitting the tilt button.
In the current market, if a buyer sees a home that has been on the market for 20 days (and is at all informed on current rate of sales), their initial reaction is usually “what’s wrong with it?”. Could you imagine that just a handful of years after the housing “incident” (where good homes with fair prices sat on the market for a year!), we’d be hearing this type of comment? Just shows how things do change. More than a few times this summer, we would run into this situation. When I’d inquire with the agents on the days on the market, we’d hear stories like the buyer got out of the contract after inspections with no repair requests. They just got out.
This could be caused by many things no doubt, but I’ve wondered if the buyers might have initially been elated that their offer was accepted only to later regret what they had to offer to BE the primary contract. Over this past spring and summer, buyers not only had to hustle to get to the showings before the house went under contract, but put in a mighty strong offer to be considered and full list price doesn’t do it in most scenarios.
Note: This is why we prepare our buyers for this current market, but stress to them to make an offer that they will feel comfortable with whether they get the contract or not. Not easy to do, but we want to get them into that mindset.
None of these examples alone or combined, will flip this market overnight. And with more syndication of buyer groups investing in rental homes in large scale, we might see a new normal when it comes to available supply in the KC Metro. For the time being, however, those of us that work with buyers will still be lacing up our running shoes!
If you ever have questions about a more specific area of the city, we’d love to hear from you.
Best regards,
Terry Jackson | Broker-Owner at Domicile One Realty | www.DomicileOne.com |
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