By Chad Taylor
Perhaps the title of this column should be, “Listen to your neighbor, but with caution,” but that wouldn’t have grabbed your attention as much, right?
Oftentimes when we are either in a strong buyer’s market or a strong seller’s market, the word on the street among neighbors is quite active. The good news of a neighbor’s home selling for way over list price where a bidding war ensued is hard not to talk about. That is pretty much what every seller dreams for when it is time to sell.
The hot seller’s market in the Shawnee Mission area has pretty much been delivering those results for several years now. BUT (you knew that was coming), the market conditions are changing so I really want to caution you about holding on to these stories of a neighbor’s conquest from a few months ago because the market is different now. Different how you ask?
The market is different because for the first time in years, we are seeing a pretty steady increase in housing inventory. See below that the number of homes for sale in the Shawnee Mission area has been on the rise since January. Some of this is simply our normal seasonal pattern. And some of it is not.
Now check this out. This graph shows the same time period and, as you can see, the number of homes to go under contract in each given week has been dropping since the peak in late April when 121 homes went under contract in one week:
Fast forward to the week of July 9 and you see that only 44 homes went under contract. I find it fascinating that the week of July 9 delivered the lowest number of homes to go under contract in the SM area when compared to any other week since late January.
This simultaneous increase in the number of homes for sale while the number of contracts being accepted on homes is dropping has created a new market condition. In some areas of town, we are already in a balanced market (5-7 months of inventory) where neither buyer nor seller has the upper hand. Some areas are on the tail end of the seller’s market and are quickly transitioning into a balanced market. I have not seen any areas as of yet that are in a buyer’s market. But we will see that sooner rather than later based on the current trends.
I just had a conversation this week with a top agent in my office. He does his job well and knows how to condition and price his listings to get them sold. He shared that he had almost two identical listings in the same area of town. One he sold a few months ago and right away for top dollar. The second is on the market now and it is sitting. The seller has received no offers and the feedback has been tough. That last part was the clincher for me.
When buyers start providing picky feedback and are hard on a property, it tends to mean that they have options. A couple of years ago, the same buyer may have been forced to purchase that same home simply because there were no other options. But today, buyers have options which means that sellers will have to focus more on conditioning their home to sell than they have in years. And not only will condition be important, but the price will have to be competitive.
This is why I began my column with “Don’t listen to your neighbor.” A neighbor who sold a few months or even several weeks ago is telling you a tale of a market that no longer exists. Don’t get me wrong. This is still a good market to be a seller. It’s just different.
If you would like to know more about your neighborhood market conditions, please email me or give me a call at 913-825-7540. I can send you a “real time” market study so you can see how your neighborhood is trending.