sponsored post by Lauren Hruby and Scott DeVouton2015 was a decent year in the Kansas City area existing home market. We went into the year wondering how many people would decide to list. The answer: Meh. Inventory and Supply were both down double digits in 2015, despite an improved economy and continued low interest rates.Interestingly, closed sales were still up over 10% for the year, and days on market dropped 11%.
Every year, we look forward to seeing the Kansas City Regional Association of Realtors’ annual market statistics. Once again, we soaked them up and have our quick take on what they might mean for you and your home.
Average Sale Price
The average sale price for existing homes was $186,953 in 2015, a 5.8% increase from last year. This is after a 5% increase in 2014, continuing a reasonable upward trend. Home values have had another year to recover. Increased prices will hopefully give homeowners a more viable option to list, which would help inventory and supply.
Closed Sales and Pending Sales
32,534 sales of existing Kansas City area homes closed in 2015, a 10.3% increase from 2014, and December pending sales went up 12.6% from the same time last year. While it’s good to see the healthy growth in closings, we are really happy to see increased pending sales. This is a positive trend that is predicted to continue through 2016.
Inventory and Supply
According to KCRAR, inventory is the number of homes on the market at the end of a given month. Supply is inventory divided by the 12-month average number of sales. They reflect how many people decide to list, compared to how many people are looking to buy. Both are were down by double digits in 2015, inventory by almost 19%, supply by almost 24%. While fewer people listed, those who sold did it quickly.
Days on Market
Days on market came down over 12%, to an average of 77 days in the Kansas City existing homes market. This continues a downward trend over the last few years, and is a good sign for any homeowner. Homes, when listed, are not staying on the market long.
Mortgage Rates and Job Market
The interest rate for a 30-year fixed mortgage is 3.80%, which is still very low. While rates began to increase in December, and will probably continue to increase throughout the year, they will likely remain low, probably under 4%. The job market also continues to grow, and 2015 provided another year for people to attack debt. These trends should continue to supply the market with a healthy stream of buyers.
Foreclosures and Delinquents
A final statistic we picked up in 2015 is that foreclosure and delinquent mortgage rates were down. Info provider Corelogic reported that foreclosure inventory was down almost 19% in November from 2014, the lowest rate since November 2007. The number of seriously delinquent mortgages also dropped almost 22% from November 2014, also the lowest since the end of 2007. Both of these figures bode well for prospective sellers. This continues a decreasing trend in foreclosures and delinquents, and we hope it continues through 2016.
TRID Note
Inventory was the topic of the year in 2015, again. A growing job market and low interest rates have created a pool of buyers that is ready and willing. Low supply and shortened time on market show that buyers are acting quickly. Homeowners have simply not been listing, causing our current inventory shortage, despite higher home values.
We suspect that a major factor for lack of inventory is that many people have simply been recovering. Equity took a big hit during the Recession, taking away the option of selling from many households. A weak job market may have also forced people to delay routine home maintenance, often required in order to sell. Indeed, we have spoken to many clients over the last couple years who have delayed listing to build equity or to complete necessary home repairs or improvements.
2016 will once again be a year in which we anxiously watch inventory. We begin the year in a seller’s market, but that could balance out if more people decide to list. Some believe that inventory will increase right away, leading to a hot first quarter. Others think that an increase will come more gradually, but that it will come in 2016. Sellers have had another year to build equity, and foreclosures and delinquents are down. With a healthy buyer pool, we have a nice recipe for increased inventory.
If you are thinking of buying or selling in 2016, now is the time to act. As a seller, you want to make sure to be 100% ready when your home hits the market. Buyers, you have competition, and it will pay to have your ducks in a row. All factors indicate that the Kansas City existing homes market will continue to grow in 2016, those who are ready should enjoy a fun ride.
Have a wonderful 2016, everyone.
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