Lawrence home sale totals tumble in May, but prices rise; selling prices up 10% from a year ago
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It might be impossible for me to buy a new home right now. By the time I figure out how to unmute myself on the Zoom call negotiations, the house already would be sold. A new report shows Lawrence home sales fell in May as fewer homes were on the market. But those that did come to market sold exceedingly quickly.
How quickly? The latest report from the Lawrence Board of Realtors found that the median number of days a home sat on the market in May before selling was just four days.
“Talk about a seller’s market,” Ryan Desch, a local Realtor and president of the board, said in the monthly report. “As the state and local lockdown orders begin to phase out, the effects on the Lawrence real estate market are becoming clearer.”
In short, the Lawrence market has fewer homes available for buyers to purchase. As a result, home sales dipped in May. For the month, 113 homes sold in the Lawrence city limits, down 15% from May 2019 totals.
The number of active listings on the market was down even more. There were 206 homes on the market, which was down nearly 20% from May 2019.
Perhaps most importantly, the tight market has led to a sharp increase in average selling prices. Year to date, the median selling price for a Lawrence home is just under $225,000, which is about a 10% increase from a year ago.
It will be interesting to watch what happens next. Will home prices continue to soar, or will the higher prices and the lack of inventory cause more people to decide now is simply not the time to buy a house? If enough people take that path, theoretically, home prices will moderate.
If home prices don’t moderate, Lawrence homeowners could be facing some interesting property tax bills. Property taxes, of course, are partially based on what county appraisers believe you could sell your home for. In 2019, the median selling price increased by 9.3% for the year, which put upward pressure on tax values for this year. Currently, 2020 prices are on pace to top 2019 levels, which would put upward pressure on tax values next year, too.
Despite the slowdown in May, the Lawrence market has otherwise been strong. Through May, homes sales for the year are up. There have been 466 Lawrence home sales thus far in 2020, which is up about 11% from the same period a year ago.
Here are some other figures from the May report:
• Newly constructed homes continue to sell at a decent pace. Year to date, there have been 56 new home sales, up from 44 through May of 2019. However, this year’s total is slightly below the 2018 mark of 61 sales.
• The total dollar value of all home sales is up 15% from a year ago. Agents have sold about $114 million worth of homes through May, up from about $99 million during the same period a year ago.
The Lawrence market continues to look significantly different from the nearby Kansas City market. According to statistics from the Kansas City Regional Association of Realtors, home sales fell by nearly 24% in May in the Kansas City metro.
Further, homes sales year to date are down 4.8%. That’s dramatically different than the 11% increase the Lawrence market has seen year to date. Also different is the price situation. While median selling prices in Lawrence are up about 10% for the year, they are up about 5% in Kansas City. As a result, Lawrence once again has a higher median selling price than the Kansas City metro at about $224,950 versus $222,400 in Kansas City.
In other news and notes from around town:
• There’s another set of numbers that suggest Lawrence’s housing market is unique at a national level. The industry website ConstructionCoverage.com has determined that Lawrence’s home-building market has seen the 10th largest percentage rate decline in residential building permits of any small metro area in the country.
The group used April building permit numbers for its report, and April was a slow month for new home construction in Lawrence. Only nine residential building permits were issued in the month. The report says that was down from 23 permits in April 2019, although the city numbers I have access to show it was down from 17 in April 2019.
But I probably wouldn’t make too much of Lawrence’s ranking. There hasn’t been a big change in home-building activity overall in Lawrence. The truth is home-building activity has been sluggish in Lawrence for quite a while. That sluggishness is playing a role in the rising home prices in Lawrence.
The city recently released its May building permit report, and it shows the number of residential units was down only one from May 2019 totals. Year to date, Lawrence has issued 66 single-family or duplex building permits. That’s actually up one permit from the same period a year ago.
The number of apartment units under construction in the city also is up. Permits have been issued for 37 apartment units through May. During the same period a year ago, no apartment building permits were issued. However, all the apartment building permits issued thus far in 2020 were issued prior to the pandemic.
So, I wouldn’t necessarily paint a picture of Lawrence being among the hardest-hit cities when it comes to losses in home building, but it is fair to say that the scene isn’t overly busy right now.
Lawrence’s building permit report does show a big drop in overall construction. When you look at everything — residential, commercial, public projects — the city has issued permits for about $49 million worth of construction through May 2020. That’s down from about $107 million worth of projects through May 2019. But the biggest difference is the 2019 totals included $44 million worth of permits for the Lawrence High School addition and renovations. When that project is removed from the mix, the numbers look much more comparable.