All Forum Posts by: David Stewart

@Alex Olson

This is for Single family homes reported to MLS. Cash sales are not included in this report. Numbers pulled from Heartland MLS.

@Caleb Christopher

These numbers were from single family homes on both sides of the state line. There are investors making profits on both sides. Name of the game right now is finding the deals.

Wow! August came and went so fast this year and homes are selling quicker than ever! Lets look at the numbers and decipher what exactly is happening in the market.

Amidst the approaching labor day, and unofficial end of summer, the number of sold homes slightly decreased from 4659 in July to 4000 in August. There is a direct correlation in listed homes though and those numbers fell also from 5459 in July to 5054 in August.

The average price per square foot has steadily been increasing since February, starting at $115 and shooting up to $129, a 12.2% increase in 6 months and up 9.3% from last year.

In August, the average days on market was 34 days. This is alarmingly short, especially considering all the homes that don't sell and aren't priced correctly are also factored in. Realistically, if a home is priced right for the market it will sell.

The August average sold price is appreciating. Both the average median sold price and the average sold price have increased by 11.1% and 12.9% since this time last year respectively. The average median sale price was $250K and the average sold was slightly higher at $289K. My speculation of this is due to new construction catching up to meet demand. Our KC builders are busy and new developments are filling up, as old developments are being completed.

The absorption rate based on closed sales is currently at 79.1% and 78.9% for pended sales. Here's a quick explanation of Absorption Rate as follows:

1. Absorption Rate based on Closed Sales (%)

Absorption Rate based on Closed Sales (%) = the number of properties sold divided by the number of properties for sale (in percentage).

For instance, if there are 1,000 active listings and 100 of them sold in a given month, the rate of absorption would be 10%. 10% of the market is being sold in that given month.

1. Absorption Rate based on Pended Sales (%)

Absorption Rate based on Pended Sales (%) = the number of properties pended divided by the number of properties for sale (in percentage).

Finally, the months of inventory based on closed and pended sales are at 1.3 months. Economists say that a balanced market is 6 months of inventory. We've had short supply of homes for years now and the historically low interest rates (which dropped well below 3% for the first time in more than half a century,) combined with low supply of homes and high demand all explain the significant price increases we've seen in this season. The 1.3 month inventory is .1 months higher than July's but that's equivalent to the Chiefs winning against the Texans with a score of 49 vs last month's hypothetical score of 52. It's super high and the difference is negligible.

That sums up this month's Kansas City Housing Market Update. Basically homes are selling quicker than Mahome's pass to Kelce for a TD. As we enter a new season, will the market cool down along with the weather or will it continue the unprecedented hot streak? Only time will tell.

What suburb of Kansas City?  Raymore, Lee's Summit, Liberty, Blue Springs, Grain Valley, etc are all growing.  I could look into the vacancies for you if needed to see if there are plans for new renters/renovations.  Let me know.

Thanks

@Craig Jeppesen

Good point,

Open houses, showings, etc happen more often on weekends.

Racing is a good source for referrals but these are on weekends also, people are always looking for land or to move around.

It’s not exactly like golf when you can go pretty much anytime. Maybe I should ask my local politicians how they can get so much work done on the golf course.

Obviously gotta keep the lights on so work takes priority but I’d like to reach the point of working on my business instead of in it. It seems so far away so hobbies help.

Thanks for the input everyone.

I'm a real estate agent in Kansas City and I love my hobbies.  Dirt bikes and woods racing in particular.   Although it's like a second family to me, I'm having trouble correlating the two.  There's also the issue of balancing and prioritizing the two.  Most riding days are on weekends, and weekends are also hot for showing houses. I have two questions regarding this topic:

1.  What are your hobbies and how do you incorporate that into your business?

2. How do you prioritize each respective activity regarding scheduling conflicts?

Correct Mike, because of growing costs for new construction, all homes under $300K are in extreme demand. Simply put, the margins are small for the builders which means the current homes in that lower price range are going extremely fast.  All throughout the Kansas City area, the average selling time is under a month in that price category.  1.9 months of inventory overall based on closed sales in May 2020.  Now is a great time to flip/buy and hold IF you can find the right deal.  I live in independence and there is plenty of opportunity.  If you're out of state and need a local agent, I can help you out.  Although it's dangerous to speculate, I don't see the costs going any lower and new homes, although nicer, are going to push the rest of the market up.

David Stewart - ReeceNichols Agent

message me for contact info

Is that near chrysler and 23rd st?  There is one street full of 4-plex's there.  Congrats on the buy!

@Caleb Brown

And many more to come.

I know that Kansas City passed some regulations for rentals recently.  I'd speak with an attorney before buying, especially if you're from out of town.  There is protection from discrimination from normal things, but also felony convictions, rental history, etc.  I know of more than a few who have sold their investment properties because they got cold feet about the situation.  I don't know what current investors are doing but I'd guess they will have to raise the rents to make up for the increased risk.  Independence is thinking about similar rules I think.  I work for an investor who buys in Blue Springs and Independence pretty regularly and he seems to do well.  Hope this helps but I would definitely look into the new laws!