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Lawrence home sales tumble as number of homes on the market hits new low
I’ve always assumed the Kansas Jayhawk has a really nice bird house — I can only imagine the size of the worm cellar — somewhere in west Lawrence. Good thing because I think even the Jayhawk may have a hard time buying a home in the Lawrence market today. The Lawrence housing market is as tight as it has been in recent memory, and the low inventories are starting to result in reduced home sales.
Homes sales in May fell 16 percent compared with the same period a year ago, according to the latest report from the Lawrence Board of Realtors. Real estate agents insist the slowdown is not due to a lack of buyers. Homes that are up for sale are moving quickly. Year-to-date, the median number of days a home sits on the market before it sells is down to 22 days compared with an already-low 34 days last year. For homes that sold in May, sales came at an even quicker pace. The average number of days on the market was just 11 days for existing homes.
Instead, real estate agents say the market is being slowed by a smaller-than-normal inventory of homes on the market. In May, the number of homes on the market dropped to 260, down from 349 in 2015 and 451 in 2014. The Lawrence market is now estimated to have a supply of homes for sale to cover 1.8 months of activity. When a market is well balanced between buyers and sellers, a market generally has four to six months worth of homes on the market.
“Our peak selling months of May, June and July will feel the impact of such low inventory levels,” Carl Cline, president of the Lawrence Board of Realtors said in a release. “We went into June with a 1.8 month’s supply of homes on the market, which is the lowest absorption rate we’ve had in Lawrence in a long, long, long time.”
The low supply of homes is having a predictable impact on selling prices. Average selling prices are on the rise. Year-to-date, the median selling price for a Lawrence home is now $170,000, which is up 4.6 percent from the same period a year ago.
A big question going forward is whether this market will spur Lawrence homebuilders to really accelerate their pace of new home construction. Indeed new construction is going on both on the east and west sides of the community — the Oregon Trail addition is being constructed near Rock Chalk Park, Langston Heights is near Langston Hughes Elementary school in west Lawrence, and a new single-family neighborhood is under construction off of O’Connell Road in eastern Lawrence. But Lawrence homebuilders are still showing a good deal of caution before jumping back into the rapid pace of building from years ago.
May’s numbers will give builders something to think about. During the month, sales of newly constructed homes totaled 13, which was more than double May 2015’s total. For the year, newly constructed home sales total 35, which is about a 60 percent increase from a year ago.
The next couple of months likely will tell the tale for the Lawrence real estate industry in 2016. June and July traditionally are busy months. The industry will need to make up some ground if it hopes to post sales growth for the year.
Thus far, overall home sales in Lawrence total 449, down 3.6 percent from a year ago. Total dollar value of homes sold is at $91.4 million, which is down about 1 percent from a year ago. It is worth noting that both those numbers are better than 2014 figures, but I think real estate agents are becoming concerned about the tightening market.
Regardless, have a happy Fourth of July. Town Talk will be off on Monday, but I plan to return on Tuesday.