Happy New Year to all the Shawnee Mission Post readers and, as always, thank you for your support of our column and the Post.
2018 was an interesting year in real estate for sure. We began the year with a robust first and second quarter where sellers were calling the shots and buyers were simply happy to get a home, even if they had to get in a bidding war for it. Then just as quickly as the market heated up early in the year, it seemed to get eerily quiet as the third quarter began. This continued into the fourth quarter and the year ended with more housing inventory than we have seen in two years.
So let’s dig into the numbers.
In 2018, the average months of supply of housing in the Shawnee Mission School District was 1.7 months of housing, meaning it would take a little under two months for all of the active homes to sell. Three months of housing or less is technically a strong seller’s market. We ended the year with 3.3 months of housing supply. That represents a 44.4 percent increase over December 2017 when inventory peaked at only 2.3 months of supply. Although 3.3 months of supply is still technically in a seller’s market, we are edging more towards a balanced market (5-7 months of supply) based on current trends.
If we look at the last three years broken down into quarters, we can see that Q4 2018 had the lowest sales absorption (47.6 percent) since Q4 2015 (43.3 percent). In 2018 we also saw the the biggest drop in sales absorption from Q2 to Q4 in the last three years (down 25.1 percent).
As I have shared in previous columns, this does not mean that they sky is falling or that we are headed into another great recession. That being said, most economists agree that after ten years of economic recovery we are due for a financial recession at some point in the near future which of course will impact the housing market as well. After a five year robust seller’s market, our real estate market is also due for a correction. Of course, I don’t have a crystal ball to predict the future, yet if the current trends continue we are most likely headed further into a more balanced market which will provide more housing options for buyers and should also cause home prices to drop and become more competitive.
If you would like to know how the current market correction is affecting your home’s value, please feel free to email or call me directly at 913-825-7540.
This weekly sponsored column is written by Chad Taylor of the Taylor-Made Team and Keller Williams Realty Key Partners, LLC. The Taylor-Made Team consistently performs in the top 3 percent of Realtors in the Heartland MLS. Please submit follow-up questions in the comments section or via email. You can find out more about the Taylor-Made Team on its website. And always feel free to call at 913-825-7540.