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Lawrence home sales tumble as number of homes on the market hits new low

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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.

Comments

Jake Esau 1 year, 10 months ago

In May, the number of homes on the market dropped to 260, down from 249 in 2015 and 451 in 2014.

249 is lower than 260... maybe 349?

Chad Lawhorn 1 year, 10 months ago

Yes, 349 is accurate. Thanks for the catch. It has been one of those days.

Doug Larson 1 year, 10 months ago

If the number of houses is down, wouldn't the prices go up? Basic supply and demand. If I have the only house in town for sale I can pretty much name my price.

Doug Larson 1 year, 10 months ago

Woops,. I misread the article. Apparently prices are going up.

Richard Heckler 1 year, 10 months ago

I don't believe Lawrence builders,planning commission and city commission need to freak out and start saying yes to every proposal. They must research EXACTLY why the market is slow.

Why is the market slow? Because of housing supply? No way jose'. If a market is slow it won't matter if Lawrence adds 1 million new homes to the market. Then Lawrence will have 999,999 homes not generating additional revenue.

Yes flooding a market is bad for business and is really dumb in a slow period.

With the economy going to hell and inflation setting in(although not necessary) a housing crash is likely on the way. WHICH MEANS any buyer agreeing to an inflated value will owe more than market value can bring. This is not a smart time to be buying homes.

Which then could also mean sellers would need to come up with several thousand $$$$$ before they could close.

The entire USA knows what Sam Brownback has done to the Kansas economy which says there is not a lot future in coming to Kansas. This is not going to change for a few years.

The bottom line: The 1% cannot support nor drive an economy.

Steve Jacob 1 year, 10 months ago

I will disagree. We don't have enough single dwelling housing, and the economy is fine, we have no inflation, that's why the Fed does not raise rates.

Just look at the stock markets, the sky was falling Friday and Monday, and we got almost all the losses back by the end of the week.

Tony Peterson 1 year, 10 months ago

We definitely don't have enough affordable single family housing available. Builders seem to think that everyone wants and needs $300,000 houses with a full bathroom attached to the four bedrooms and a gourmet kitchen clad in stainless steel and quartz tile.

Steve Jacob 1 year, 10 months ago

Why would a builder build a $150K house if you can build a 300K house that sells before you can paint?

Tony Peterson 1 year, 10 months ago

Because they could build four $90,000 houses on on the same size lot as a $300,000 McMansion, make more money, and THOSE would be sold before the basement was even poured.

Richard Heckler 1 year, 10 months ago

I see lots of homes for sale throughout the Lawrence community.

Richard Heckler 1 year, 10 months ago

There are reasons why home sales might be very and reasons why it might NOT be a good time to buy a house in Lawrence.

WE must take a step back into reality and stop pretending that the Kansas economy is great and wonderful.

Think about this:

Thomas Bryce Jr. 1 year, 10 months ago

The problem is developers are not building Single family housing. They are building multi level, expensive rentals with little or no parking and the City commission and the Chamber is supporting this with a Tax abatement for every one that builds them. Can Home owners get a tax abatement for improvements to their homes or property? Why not? OH! I see! It only applies to developers who promise this is all for the good of the city! Hint: There are a lot of citizens that live in this city and have a vested interest in it succeeding. Why not ask them what they think is best for their city? Or, do the Developers see Lawrence as Their City? This may be the problem.

David Holroyd 1 year, 10 months ago

Why does Realtor.com show as of today 543 homes for sale in the Lawrence, KS market AND also shows those with reduced prices. The Journal World has consistenly not reported the facts about homes listed under the county valuation, selling for less than the listed price and revealed the facts about how much the owners put into the house to get it SOLD.

What happened to the guy who was going to build "affordable' homes in North Lawrence back in 2013 in part of the Riverview Trailer park. They were to be in the $120,000 range, 11 single family homes the Journal World reported. Did that ever happen? If so, are the new owners still in them OR did it not happen and why?

Mr. Bryce, this article appears to this old , almost dead person, that this is a ploy to get the public to believe that 160 acres west of town needs to be rezoned and the realtors are behind it as well.

Never mind that the City Commission is about to DOWNZONE 190 acres right in the middle of the city and the JOURNAL WORLD doesn't care to write about it and the negative effects on the property owners.

Face it, Mr. Bryce, a handful of developers in Lawrence and architects do see the city as "their"s, and thus why it is the same bunch sucking on the public teat.

I had a builder tell me years ago, not that long ago, that they feared a big builder / developer of homes would come to Lawrence and build and thus the locals would be out of the building job. It was not TOLL BROTHERS either. They wouldn't waste their time on podunk Lawrence with no money.

btw, it is still cheaper for a person to rent than buy at the moment, especially in Lawrence where your home when you get ready to sell it, is sold at less than the county value and you have paid taxes on a fake valuation, only for the city and school, and county to suck up your tax dollars. How about 30 million for a jail with only 120plus beds. How much is that a bed?

Douglas county officials and the taxpayers could buy the Ritz Carlton for a jail

Please Journal World , start reporting the facts about home sales. County valuation,listed price, sold price, cost of improvements to complete the sale and realtor commission(which you will pay as the new owner, property taxes on) Do The Math!

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