I’m often asked, “What is the hottest market?” so I thought it would make for a good column this week.
As I have written before, our market is certainly shifting and some of those signs can be seen now that we have closed the books on January 2019. The easiest way to see if a market is hot or not, is to look at the housing inventory levels. Months of housing supply, the number of months it would take for all active homes to sell, is a great way to observe how supply and demand relate to one another.
As a reference, three months of housing supply or less is considered a strong seller’s market where the number of home buyers greatly outnumbers the amount of available housing. Five to seven months of housing supply is a balanced market where the number of buyers and sellers is exactly that, balanced. When housing inventory exceeds seven months of supply we are then in a buyer’s market where the numbers of homes for sale greatly exceeds the number of active home buyers.
So where are the hottest markets in NEJC?
Here they are from #5 to #1, with number one having the lowest housing inventory available:
#5 Roeland Park – This one is a surprise. I say that because Roeland Park has been one of the hottest areas of NEJC for a couple of years now. Don’t get me wrong, Roeland Park is still hot. Housing is still pretty affordable and the proximity is great. That being said, as of the end of January, Roeland Park had seven months of inventory based on the current sales rate. That is still in balanced market territory but it is very close to a buyer’s market. We will have to keep an eye on this one for sure.
#4 Fairway – Fairway, and especially the area that many call the “Golden Triangle”, has really seen a drop in demand that started in Q3 last year. Fairway ended the year in December with ten months of supply. However, in January that number dropped to four and a half months of supply. So it is definitely back in balanced market territory. Home prices in Fairway have been dropping pretty consistently since Q3 last year which could be the cause of the drop in supply. Buyers could be taking advantage of the better values in the area that are now available.
#3 Mission – This one is also a surprise. Mission has stayed pretty much in the one month of supply territory for years now. But starting in November 2018 the demand began to slow. As of the end of January 2019, Mission now has 3.8 months of supply. This is still seller’s market territory, but Mission may be on notice just like Roeland Park.
#2 Prairie Village – Once again, PV is in the top two. This is a pretty consistent pattern for Prairie Village. The normal demand for housing coupled with the demand for lots from builders for new build projects has kept housing inventory at an unbelievable low point. January ended at 1.1 months of supply which is a strong seller’s market. If you are a potential home seller, however, please don’t take these low inventory levels for granted. They won’t last forever.
Drum roll please……
The #1 location in NEJC based on the lowest level of housing supply is….Merriam. This is most certainly driven by one major factor. Affordability. The previously mentioned cities have all seen a tremendous surge in pricing over the last few years. Merriam, however, still remains one of the last affordable parts of NEJC where first time home buyers don’t have to compete with home builders.
Congratulations to all of the top five this week. If you would like to know how your home would compete in today’s market, please email me or give me a call. The value of your home today might surprise you!