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