By Chad Taylor
Is the local housing market about to come to a screeching halt?
No, of course not. But it is changing. We have already had a taste of the cooler weather and fall is nipping at our heels.
So how is the market changing? Well let’s look at the city at large. At the end of July, our MLS had 4.4 months of inventory (14,483 homes for sale). As I have shared before, anything less than six months is heading towards a seller’s market. The 4.4 months is calculated by dividing the total number of homes that are selling each month into the total number of homes actively for sale. Therefore, you know how long it would take for all of the current inventory to sell if nothing else came on to the market.
At the end of August, our MLS had 4.6 months of inventory (14,475 homes for sale). The number of homes for sale is almost exactly the same, however, the number of homes selling per month is dropping. In July, 3,298 homes closed compared to 3,149 in August.
Is this a huge drop in sales? No. That said, 149 homeowners did not sell in August who potentially would have sold in July due to the higher absorption rate (the number of homes selling per month). This is a classic example of both seasonality and supply and demand. Although I am not predicting a major stall in our market as we have seen in some years past, seasonality is inevitable. Essentially we have six to seven weeks of strong market left (barring any major weather conditions) before the shift will happen and the market will become more balanced.
On top of that, comparing July to August, homes are selling for 1 percent less of their original list price. Again, this is where the effects of supply and demand are the ugliest. I see this number as 1 percent off of my clients net results from selling their home. That is a big impact for most home sellers.
Finally, homes are selling for two dollars less a square foot (on average) when you compare the last two months. One might think that does not sound like a big number, but if you live in a two thousand square foot home, that is $4,000 less when it comes to the sales price. Again, we are not talking about dramatic changes in the market. But changes, nonetheless.
I know that the sellers out there have enjoyed the strong seller’s market that we have been experiencing this year. But those days could be limited.
Now to the buyers out there. Don’t get too cocky. Although the market is getting to be more balanced and not so heavily weighted towards the seller, certain price ranges are like their own little “micro-market” and will continue to sell immediately.
Now for a quick contest.
I am so thankful to everyone who visits our column weekly. I have received several compliments this week alone concerning the column and nothing makes me more happy. So as a thank you….a contest.
One price range in our MLS is the fastest moving price range. I have mentioned it in recent columns. The first reader who EMAILS ME with the correct price range (in 50K increment), will receive a gift certificate to a local restaurant.
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.
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