Home sales in Lawrence plunge 45% in latest report; single-family home construction also on pace for new low in 2023
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Home sales in Lawrence continue to fall, and now are doing so at a rate significantly faster than our neighbors in the Kansas City metro area.
But on the flip side, housing prices are beginning to fall, and they too are dropping at a rate faster than in Kansas City communities.
Lawrence home sales dropped by 45% in April, according to the latest figures from the Lawrence Board of Realtors. There were just 63 home sales in April, which usually is a busy month as buyers look to finalize deals in time for a summer move.
The 45% drop continued a trend for the year, but it was the steepest drop yet in 2023. For the year, home sale totals in Lawrence are down 32.5% compared with the same period a year ago.
Home sales have been dropping in many communities as mortgage interest rates have risen. But the decline in sales in Lawrence is now more than twice as steep as what’s occurring in the Kansas City metro area.
According to the latest report from the Kansas City Regional Association of Realtors, homes sales in the KC region are down 18% through April.
Lawrence, though, may be facing pressures that go beyond interest rates. Local real estate agents for several years have said the pace of new home construction in the city is inadequate to create a healthy housing market. Real estate leaders amplified that concern with this latest report.
“While other communities in Kansas, and across the country, are showing helpful increases in new construction homes, Lawrence is well behind the trend and simply is not producing enough new homes to keep up with demand,” Brian Johnson, president of the Lawrence Board of Realtors, said in the report. “The City of Lawrence needs to prioritize the investment in infrastructure needed to facilitate construction of new homes in a variety of styles and price ranges. Affordable housing starts with more housing.”
Single-family home construction hit a new low in 2022, with only 79 new homes built in a community that in previous decades routinely used to build 300-plus new homes a year. Thus far, the downturn is accelerating in 2023. Through April, the city has issued only 12 single-family building permits. That’s down from 25 single-family building permits issued through April 2022.
In other words, after hitting a historic low of 79 single-family building permits in 2022 — and with the market getting news that 4,000 jobs are coming to nearby De Soto for a Panasonic battery plant — Lawrence is now on pace to issue just 38 single-family building permits in all of 2023.
But Lawrence is not alone in struggling to boost single-family home construction. The latest report from the Home Builders Association of Greater Kansas City shows the metro area is also posting some of its lowest single-family home construction totals in years. Single-family building permits are down nearly 39% from the same period a year ago in the KC metro area, according to the report.
The metro area has seen 1,083 single-family housing starts in the first four months of 2023. That’s the slowest start to a year since at least 2016, according to the report. The last time the KC metro area failed to start at least 1,500 homes by the end of April was in 2019, when the market produced just over 1,200 single-family housing starts.
Still, Lawrence’s decline in single-family home construction is significantly outpacing the dropoff in Kansas City, with Lawrence checking in with a 52% decline in single-family building permits thus far in 2023.
That could be enough to account for why Lawrence is seeing home sale totals fall at a much faster rate than the Kansas City market. There are signs that new housing construction is becoming more important in the real estate market.
Will Ruder, executive vice president of the Kansas City home builders association, said that historically about 10% of home sales in the KC market came from newly constructed homes. But more recent numbers show that about 40% of all active listings in the Kansas City market are newly constructed homes, he said in the home builders’ April report.
“Current homeowners with a sub-three percent fixed rate mortgage are understandably more reluctant to sell, so it’s difficult to imagine an increase in the number of existing homes hitting the market any time soon,” Ruder said in the report. “New home construction is going to be an increasingly important component of the regional housing mix.”
If so, that could be bad news for Lawrence.
People looking for a home in Lawrence, though, have seen some falling prices recently. April was the second month in a row that median selling prices of homes fell in Lawrence. The median selling price of homes in April was $275,000, down 13.5% from April 2022 totals. Year to date, the median selling price in Lawrence is down 5.8% to $282,500.
The Kansas City metro area, in contrast, is seeing average selling prices increase slightly. The median selling price in the KC market is up 0.5% to $275,000 thus far in 2023.
Here are a few other items of note from Lawrence’s April real estate report:
• Homes continue to sell quickly. The median number of days a home sits on the market before selling is five thus far in 2023. That’s one day longer than the average was at this point in 2022.
• The Lawrence market did end April with significantly more homes for sale than it did last year. The April report lists 107 homes that were actively on the market. That’s up from 78 homes during April 2022.
• Pending contracts, which provide a glimpse of sales that are likely to get booked in the next month or so, were down at the end of April. There were 149 pending contracts compared with 170 in April 2022.
• The Lawrence real estate industry as a whole is taking a big hit in its top line revenue. With falling homes sales and now some falling prices, the Lawrence real estate sector has sold $22.4 million worth of homes thus far in 2023. That’s down from $39.3 million at this point in 2022.