There has been a general slowdown in sales across the country, and this cannot be blamed on negative economic news. Unemployment remains low and wage growth, though nothing to overly celebrate, has held steady or increased for several years in a row. There is strong demand for home buying, emphasized by higher prices and multiple offers on homes for sale in many submarkets. As has been the case for month after month – and now year after year – low inventory is the primary culprit for any sales malaise rather than lack of offers.
Closed Sales decreased 4.7 percent for existing homes but increased 11.5 percent for new homes. Pending Sales increased 12.8 percent for existing homes and 0.6 percent for new homes. Inventory decreased 27.9 percent for existing homes but increased 10.5 percent for new homes. The Median Sales Price was up 8.3 percent to $195,000 for existing homes and 4.4 percent to $356,200 for new homes. Days on Market decreased 20.4 percent for existing homes and 2.1 percent for new homes. Supply decreased 31.0 percent for existing homes and 2.0 percent for new homes.
With job creation increasing and mortgage rates remaining low, the pull toward homeownership is expected to continue. Yet housing starts have been drifting lower, and some are beginning to worry that a more serious housing shortage could be in the cards if new construction and building permit applications continue to come in lower in year-over-year comparisons while demand remains high. Homebuilder confidence suggests otherwise, so predictions of a gloomy future should be curbed for the time being.
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*Information provided courtesy of KCRAR and Heartland MLS