Lawrence home sales showed signs of a downturn in June
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Mortgage interest rates may be historically cheap, but the number of homes prospective buyers have to choose from in Lawrence also is near historic lows. The result in June was a local housing market on the downturn.
The number of homes sold and their average selling prices both were down in June compared with a year ago, according to the latest report from the Lawrence Board of Realtors.
Lawrence home sales were down 3.8% in June. But the more eye-catching number is that the number of homes on the market was down 43% compared with the same period a year ago. Just 166 homes were on the Lawrence market in June, which has left the market in a tough position for July. That is a month in which more than 200 homes are usually sold.
Lawrence has been facing a tight inventory of available homes for more than a year now. That tight inventory generally has been putting upward pressure on home prices. Interestingly, that wasn’t quite as true in June. The average selling price of a home was down 1.9% from a year ago, to about $252,000. However, the median selling price — the point where half the homes sell above and half sell below — was up 4.6% for the month to $238,500. (I’m guessing the half of the house that has my “home office” sold below, based upon the looks it gets when anybody enters.)
Given that mixed bag, I wouldn’t exactly say June is a clear sign of a moderation in local home prices. One month is never a very good indicator, but this is the first time since February that we have seen any sign of an average price decline in the Lawrence market. Rather, the past few months have been producing some astounding numbers, with April’s median home price rising by 22%. We certainly didn’t see that type of frothiness in June.
Since June, though, mortgage interest rates for a 30-year loan have hit their lowest levels since national averages have been recorded, but it is not yet clear it has produced a bump in available homes. Nationally, many real estate experts are saying that a fair number of people aren’t going to put their homes on the market until there’s more certainty about the pandemic. (And in fairness, it would take us three months just to get the smell of a confined 17-year old out of the house. I refuse to comment on the stench coming from the “home office” area.)
The lack of available homes for sale in Lawrence may be the deciding factor in whether Lawrence’s real estate market finishes up or down for 2020. The market has been vacillating between gains and losses for much of the year.
“June continued the trend of an up-and-down year in the Lawrence real estate market,” Ryan Desch, president of the Lawrence Board of Realtors, said in the report.
Through the first six months, Lawrence’s real estate market is in positive territory. Sales are up 6.7% to 619 for the year. Here’s a look at some other numbers from the June report:
• Year to date, the median selling price for a home in Lawrence is $228,000, which is up 7.2% from the same period a year ago.
• Sales of newly constructed homes are starting to pick up pace. Seventeen newly constructed homes sold in June, nearly a 31% increase from a year ago. Year-to-date, there have been 73 such sales, an increase of about 28%.
• Perhaps not coincidentally, sales of newly constructed homes have risen as their prices have fallen. Year to date, the median selling price for a newly constructed home is down 7% to $324,000.
• If you want to buy a home, you had better be ready to act fast. The median number of days a home sat on the market in June before selling was just eight, which is down from 10 in June 2019. Years ago, that number was closer to 20 or 30 days, but the Lawrence market has been moving very quickly for quite a while now.
While it has been an up-and-down year for the Lawrence real estate market, it is doing better than the neighboring Kansas City metro area. The monthly report from the Kansas City-area board of Realtors shows home sales were down 4% in June in the metro area. For the year they are down 4.3%, so there is a more than a 10-percentage-point gap between the Lawrence and Kansas City markets.
But, the numbers also show that any difference in median home prices between the two markets has evaporated. The median home price thus far in 2020 in the KC metro is $227,000, or about $1,000 less than the Lawrence median. Further, home prices in Lawrence are growing at a slightly faster rate, about 7% in Lawrence versus about 5% in Kansas City.
The scene on the newly constructed home market is a bit different. Those new homes in the KC metro have a median selling price of about $375,000 thus far this year. That’s about $50,000 more than the median selling price of a new home in Lawrence.