By Andrew Bash
This local residential real estate started off at an extremely hot pace — and recently released figures for the second quarter of 2021 show the trend continued! We are still seeing strong buyer demand and lower inventory across the region. Paired with low interest rates, multiple offers above asking price were the name of the game for many of our transactions in Q2.
Median sales prices increased by 24% year-over-year, according to the National Association of Realtors. This was the highest increase since 1999! The average sales price in the metro increased 17.2% to $309,284. For reference, in 2020 the average sales price sat at $264,006. While we are anticipating some easing of this trajectory by year’s end, these price increases will more than likely persist through the summer, albeit at a slower rate.
Not surprisingly, we also saw an increase in pending and closed sales for this quarter. Pending sales were 7.4% higher than the same time last year and closed sales were up 13.3% from 2020. Higher demand and lower inventory are expected to continue for the foreseeable future. You can see how these recent trends have played out historically in the graph below show average home sales prices for the Kansas City region from the Kansas City Regional Association of Realtors:
The months supply inventory declined in the second quarter by 50% from 2020, to 0.9 months. Conversely, the percentage of original list price received increased by 4.5%. In 2020, sellers received 98.4% of their list price compared to this year, where sellers are receiving 102.8% of list price in Q2.
On a national level, homeownership reached 65.4% in the second quarter of 2021, backsliding 0.2% from the first quarter of 2021, and falling 2.5% below the level from the same time last year. The Midwest tops the list for housing affordability, and therefore has higher homeownership rates than other parts of the United States. While homeownership rates declined in the South and Northeast, they rose in the Midwest and West from Q1.
What’s coming now?
The question on everyone’s mind for the Q3 is “Is the market slowing down?”. Experts expect home prices to stay high, which is good news for those who already own homes. Reduced competition will also be a benefit to buyers, although they can expect a bit more difficulty in the market. Interest rates will remain low historically, although may rise slightly higher due to economic changes.
If you are a first-time home buyer, you will more than likely be in a better spot than in previous months and have more time to weigh this very important decision. Still, the market will still need some time to remedy the inventory shortage, so patience will be key. If you are a seller, the all-important question will be how to price your home. At Bash & Co. Sotheby’s International Realty, we have the expertise to answers all your questions. Whether you are a buyer or seller, we will go above and beyond to make this experience smooth and seamless!
Bash & Co. Sotheby’s International Realty is an innovative full-service residential real estate brokerage that leverages the latest technology to serve clients in emerging, established, and luxury neighborhoods across the Kansas City area. Follow them on Instagram here and on Facebook here.