Home sales fall nearly 30% in June; market enters second half of year slightly above 2023 totals

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The start of summer fizzled more than sizzled in the Lawrence real estate market. Home sales were down 28% in June, and year-to-date totals are now at risk of falling below last year’s already soft results.

June home sales totaled just 85 units, down from 118 homes in June 2023, according to the latest report from the Lawrence Board of Realtors. The 28% drop was the steepest monthly decline of the year thus far, and continues and an up-and-down season for the local real estate industry.

Local home sales posted gains of 60% in February and 40% in April, but the year also has produced two months where home sales have declined by more than 20%. The local real estate industry is trying to end a multi-year losing streak, where total Lawrence home sales have declined each of the last three years.

For much of the year, it looked like the end of that streak would be a good bet. But now, with half the year in the books, another down year can’t be ruled out. Homes sales through June are up 1.6% — an increase of seven sales from this point last year.

While that is small, that is better than some markets. The Kansas City metro real estate market is on pace for a decline in 2024. Through June, home sales in the K.C. metro are down 1.1%, according to the latest report from the Kansas City Regional Association of Realtors.

There’s also one other notable difference between the Lawrence and K.C. markets — price. The median selling price of a Lawrence home is now $15,000 higher than the median selling price of a K.C. home, according to the two sets of reports. the numbers also show the gap is growing.

Through June, the median selling price of a Lawrence home is $315,000 compared to $300,000 in the K.C. market. The median selling price in Lawrence is up 5% from a year ago, while the median price in the Kansas City metro is up 4.5%

If that trend holds, it will end a streak that community leaders who are working to make housing more affordable had hoped to continue — a slowdown in housing prices. To be clear, that doesn’t mean housing prices have been falling in recent years. Far from it. Rather, the last two years have produced smaller rates of increase. In 2021, the median selling price in Lawrence jumped 11.5%. In 2022, it increased 10%, and in 2023 the increase was a much more modest 4.2%, according to the Lawrence Board of Realtors.

If Lawrence finishes the year with a 5% increase, the question will be whether that is an early sign that home prices are again heading toward double-digit increases. In this market, good luck predicting that future.

The first order of business probably will be to watch for whether home sales go up or down. Lawrence Board of Realtors President Jill Ballew, in the organization’s monthly report, called the current market dynamics in Lawrence “complex,” and didn’t provide any guidance for what may happen the rest of the year.

Theoretically, fewer home sales should push housing prices down, but that has not been case in recent years. The reason: Home sales haven’t slowed in Lawrence due to a lack of a demand, but rather a lack of available homes to purchase. That situation actually pushes prices up.

Most of the metrics in Lawrence are still pointing to a very tight housing market, with slight improvements. The median number of days a home is setting on the market before selling is five. That’s up from four days at this point in 2023. The average number of days is 22, up from 17. Compare that to the Kansas City market where the average number of days on market is now up to 43. In other words, homes are sitting on the market in Kansas City about twice as long as they are in Lawrence. That seemingly is an indication that the Kansas City market is better stocked on available homes than the Lawrence market.

One other metric that measures the supply and demand balance is a calculation that shows how long it would take to sell all the current homes on the market, based on current demand. In Lawrence, that total was 2.5 months in June, which is up from 1.5 months in June 2023.

Other figures from the June report included:

• Nearly all of the homes sold in June were existing homes rather than new construction. Only two of the 85 homes sold were newly constructed homes.

• At the halfway point of the year, Lawrence residential real estate sales totaled $159 million. That’s up 5.5% — or about $9 million — from the same point a year ago. That figure is a reflection of both the slightly higher sales total and the higher selling prices in the market.