Lawrence home sales were up in 2020, and so were prices
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There’s a joke circulating among Lawrence real estate agents these days: Tom Brady has been in more Super Bowls than Lawrence has houses for sale.
“It is not quite that bad yet, but it is close,” said John Huntington Jr., president of the Lawrence Board of Realtors.
Hopefully the next punchline isn’t that you need Brady’s wallet to buy a house in Lawrence.
Lawrence’s real estate market finished 2020 with a plummeting supply of houses for sale and sharply rising selling prices for homes.
The latest report from the Lawrence Board of Realtors showed that the median selling price of a Lawrence home rose to $236,400 in 2020. That’s up 11% from 2019. It also marks the second time in three years that the median selling price has increased by double digits. In 2018, prices increased by 13%. Add it all up and the median selling price for a home in Lawrence has increased from $180,000 at the end of 2017 to nearly $237,000 today. That’s an increase of 31%.
It is not hard to see the driving force behind the increase currently. The number of homes that are for sale in Lawrence is at a new low. The year ended with 81 homes on the market. That’s down from 218 last year. Real estate agents have long said that a market is in good balance between buyers and sellers when there are enough homes for sale to satisfy about five to six months worth of home purchases. Currently, Lawrence has a supply of housing equal to about 21 days.
The market is heavily favoring sellers, at the moment.
“There are times that you make an appointment to see a house, and you don’t even get into the house because they’ve already accepted an offer,” Huntington said. “That’s happened to me on half-million-dollar homes where I’ve had a cash buyer trying to get an appointment.”
The industry tracks how many days a home sits on the market before it sells. In 2020, the median was seven days, down from 14 a year ago. For some greater perspective, the median was 34 days in 2015.
Huntington is expecting more of the same in 2021. He said the most likely way to change the housing market in Lawrence was for a greater number of builders to start building a larger number of homes in the city. He doesn’t think that is very likely in 2021, though. For one, the city’s home-building industry continues to be small by historic standards. Many builders got out of the market during the recession after 2008, and it hasn’t built itself back up to those levels. Another reason, though, is that lumber prices are high after several mills experienced production shutdowns during the pandemic. Those high lumber prices will slow some building activity.
Of course, another possibility is that buyers start balking over the higher prices, deal numbers decline and the number of available homes increases as demand wanes. Huntington said he didn’t think that was likely to happen either. He said that would be a more likely scenario if the rising prices and tight supply were unique to Lawrence. But it is not. Similar trends are playing out in other markets. Plus, he said mortgage rates of less than 3% are giving buyers a lot of confidence, even when the headlines have a lot of troubling news.
“I remember I got a listing for a home on April 1, when we were in the middle of the lockdown,” Huntington said. “I was worried about what was going to happen. How was I going to sell this home? I had 10 offers on that home, even during that time period.”
He said he would be more likely to bet on a different trend this year: basements. He said he had a showing last weekend where the couple had already had sold their home and were staying in someone’s basement while they looked for a new one.
“This may be the year we need more people to open up their basements,” he said.
Here’s a look at some other statistics from the December homes report from the Lawrence Board of Realtors:
• Home sales in Lawrence totaled 1,339 for the year. That was an increase of 11.5%. The increase ended a streak of two consecutive years where the number of homes sold in Lawrence declined slightly.
• The number of newly constructed homes that sold totaled 167 for the year. That was a big jump for the local home-building industry. In 2019, only 96 sales were of newly constructed homes.
• The total value of homes sold in Lawrence was about $348 million. That was up about 20% from a year ago.
• While the median selling price for all homes was $236,400, the report also provides a breakdown by home type. For existing homes, the median selling price was $222,000. For newly constructed homes, it was $329,800. That selling price actually was down slightly from about $334,000 a year ago and down from about $340,000 in 2018.
Lawrence’s market was fairly similar to the Kansas City real estate market next door. According to a report from the Kansas City Regional Association of Realtors, the metro area saw median selling prices rise by 10.9% to $238,500. That’s about $2,000 more than the median selling price in Lawrence.
By one standard, though, Kansas City’s market wasn’t as frothy as Lawrence’s. The number of homes sold in the metro increased by 6.3%, a less robust rate than the 11.5% increase in Lawrence.