To some this news is shocking. Honestly, I think to many PV residents this news might be shocking. I speak to hundreds of residents on a monthly basis and the general consensus is that the PV market is hot and will continue to be so. This is simply not the case. The real estate market is always shifting. We have been in an abnormally long seller’s market for over six years and the pendulum must now swing the opposite direction- a buyer’s market.
I have been eager to see July’s numbers because our team has been “feeling the numbers” all month long and I was excited to see if what we have been observing was right. So what were we feeling you ask? We observed that the days on market required for a property to sell have been on the rise. Price adjustments are occurring more frequently and earlier in the listing process. Most importantly, buyers are simply not in a hurry. This is a big one. The pace or intensity of a home buyer, in most cases, has a direct correlation to how many options they have in their search. For example, when a buyer has very few homes to choose from, when a good one comes on the market- they pounce and write an offer quickly.
When home buyers have a lot to choose from, the opposite occurs. They might see the home at their first opportunity, and then do nothing. They think about it. Consider their options. They might even provide feedback that the home is a great fit for them, but still do nothing. This is what we have been seeing recently and it is a clear sign that the market has shifted.
What if I told you that as I write this column (8/1) there are 89 homes for sale in Prairie Village? I remember not too long ago when the number of active homes for sale in PV did not exceed 30. Therefore, 89 is big increase from what we have seen in recent years.
Take a look at the graph below and you will see what is taking place in PV-
If you compare July 2019 to last July, to can see that this year the number of homes for sale is down slightly by 6.3 percent. And WOW- the number of homes to go under contract is down 50.9 percent compared to last July. Said another way, last year 57 homes went under contract in July. This July only 28 homes went under contract. That is a significant drop in the demand for PV homes. Lastly, the number of homes that expired off of the market, or failed to sell is up as well. When under contracts are down, days on market and expired listings are on the rise, the market is in a downturn.
Now let’s take a look at it from another perspective.
As of the end of July, PV has 3.8 months of housing supply available. That is the highest inventory level that we have seen in the PV market since the market recovered in 2013. The one year average inventory level is still 1.9 months which is technically still a seller’s market. But don’t let that fool you. We are clearly in the downturn cycle of the market. And keep this in mind- local real estate markets tend to spend more time in the market extremes (seller’s market or buyer’s market) and a short period of time in the transition (a balanced market).
So what does this mean for a PV resident looking to sell their home in the near future? Do it now! Home prices are being affected currently, but not tremendously at this point. It is coming though. Each week that you wait brings more competition and higher expectations from active buyers when it comes to your home’s condition and price. Our market is becoming a pricing war AND a beauty competition. The days of just throwing a home on the market are gone. Thoughtful conditioning of a home in order to sell is a must and pricing- this is a big one- pricing MUST be strategic. In today’s market, pricing inaccuracy can cost you thousands.