"How is the market?" This is a question we are often asked these days and the answer is simple. It is a tale of two markets.
Recently I was on a call with my business coach, and we discussed that it appears that there are two real estate markets occurring at the same time. One in which potential home buyers have gotten over the sticker shock of today's higher interest rates and are ready to find a future home. A second in which potential home sellers are on strike, it seems. Many feel that they have missed their opportunity at the incredible seller's market we have been in for the last few years and will now sell for less. It pains them to think they missed their chance at the real estate jackpot.
On one hand, home buyers are excited about the 2023 real estate market. And on the other, home sellers just don't quite know what to think. In addition, many homeowners out there are currently at a historically low interest rate (like 3.5% for example) and just can't come to grips with the idea of trading it for today's rate which is more in-line with the historical average.
How can these two markets exist simultaneously? Is one perspective more accurate than another. Let’s look at the data.
In Kansas City, home prices are down 16.5% from their peak in June 2022. That may sound like a big price drop, and it is. But (and this is a big but), home prices are still up 4.9% year over year when you compare Jan 2022 to Jan 2023. So for those sellers out there who think they missed their market, that is not necessarily true. Your home has appreciated year over year meaning your home is worth more now than it was a year ago.
Another consideration is when values were at their peak last year, home inventory was at its lowest point. The lack of housing supply coupled with unbridled demand drove prices up. It also meant that home buyers often had to write several offers to get one accepted. If you sold your home at the peak last year to get that crazy high price, the near non-existent housing supply would have caused you to also pay a crazy high price on your future home. It is a double-edged sword. You also may have had to settle for a shorter list of needs and wants in your future home simply because you didn't have many homes to choose from. Or as my dad would say, "beggars can't be choosers."
Housing inventory in Kansas City is up 57.1% year over year. The rise in inventory is giving home buyers a boost in confidence that there are finally options out there for them to see. The city is still technically in a seller's market, with less than 5 months of housing inventory, but it certainly "feels" better out there to most buyers. I say most buyers because there are still some locations and price ranges that are an exception to the rule, micro-markets if you will, where inventory is still very low, and demand is very high.
If you would like to know your home's value in today’s market, or if you plan to make a home purchase and would like to be the best buyer you can be, click here to contact us today.