Record home prices are being rejected
In the last twelve months, home values in the Shawnee Mission School District have shot up by 11.2 percent based on November’s numbers. In real dollars and cents, that represented an increase of $24,000.00 in just twelve months ($215,000 to $239,000). And because most home buyers did not receive an 11.2 percent raise this year, record home prices are now being rejected by today’s active buyers. Rising interest rates have not helped much either.
The number of SMSD listings in November that expired off of the multiple listing service, meaning they failed to sell, was up 70.6 percent when compared to the same month last year. In November 2017, 68 homes expired off of the MLS. If you compare that to this November when 116 homes expired off of the MLS, it is clear that home buyers are rejecting homes for sale at a much higher rate.
Several NEJC area have already seen the median home price drop in recent months due to price rejection. In addition, the number of price adjustments is on the rise as well.
So what is the message to current and potential home sellers? The message is loud and clear. Today’s market is for sellers who have a strong motivation to sell their home. A motivation so strong that it will cause them to price their home in-line with today’s market and not try to price their home like it is March 2017.
This market is not for what I call “tryers”. Tryers are home sellers who say, “We will try to sell our home, if and only if we can get the price we want.” For the tryers out there, I hate to tell you but that ship sailed many months ago. Today’s market is more price sensitive than we have seen in several years.
Pricing is always very important, and with the Fed indicating that it will once again raise the Federal Funds rate at their meeting next week, buyers are watching every dollar and are focused on purchasing a good value.