Your Home: Timing the real estate market


By Chad Taylor

First let me say that it is never a good idea to “time the real estate market.” I just used that title for my column to get your attention. I trust that it worked.

For many years I have been taught never to try and time the market. But rather, as a potential home seller or buyer, “when you know, you go!” Meaning, when life says it is the right time for a move, then you should go for it.

The reason that I warn against timing the market is because the market is always moving and never completely predictable. Just like the stock market, the value of a home could be one price one day and either a higher or lower price the next, all determined by supply and demand.

Speaking of which, let’s take a look at the graph below.

This graph illustrates the sales absorption rate each month over the last two years in the Shawnee Mission School District. The absorption rate is the percentage of active homes for sale that go under contract in a given month. For example, in April 2018 the absorption rate was 46.5 percent or in real numbers 472 homes went under contract last April out of 1,014. Fast forward to 2019 and the absorption rate was 42.5 percent or 416 out of 979.

One could have predicted by looking at 2018’s numbers that April would be the best month to put your home on the market this year based on the historical demand. However, this year it appears that the housing demand reached its peak in March when 45.1 percent of homes went under contract. In 2017 and 2018, we saw an increase in demand from March to April. 2019 is clearly showing up differently than the last two years. And if you notice, historically the overall demand will decline from the peak month through December.

So even though we cannot and should not time the market, historical patterns show that if you are going to sell your home this year, time if of the essence. This does not mean that if you waited until Fall that it would be a bad market. It simply means that overall housing demand will be less at that time which will typically create downward pressure on pricing (median home prices will drop) and the fall market will allow buyers to be a little pickier than earlier in the year when they potentially had more home buyer competition for the same home.

So how do we think May is shaping up? Let’s take a look. The graph below shows the weekly absorption rate in the SMSD. Early numbers indicate that May’s monthly absorption could very likely be less than April. But we will see.

If you are considering a home sale this year and are curious about your neighborhood market or the value of your home, please click this link for answers to your questions.

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.