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| Updated November 24, 2009
Wichita is in a better housing market than the national market!
The national market may be in a slump, but that doesn't apply to Wichita!
ALL real estate markets are LOCAL! | WSU Center for Real Estate, Housing Market Data - Click Here
Wichita Area Association of Realtors Home sales statistics - Click Here |   | | STATE OF THE MARKET REPORT
Everyday I am asked the question, "How's the real estate market?" In today’s economy this seems to be on everyone's mind. To thoroughly answer this seemingly simple question, I begin by asking another question, "Which market?” Are you referring to the $200,000-$250,000 market in West Wichita, or the downtown condo market, or even the $125,000-$150,000 market in Bel Aire? It would be misleading to describe the overall market as good or active or healthy, when, in fact, these SUB-markets are performing differently.
The Overview (Big Picture)
When looking at the Big Picture, the market is relatively balanced. Homes are still selling, inventory is stable, and sellers are getting fairly close to their asking price. Homes are selling in approximately the same amount of time as they did a year ago. Interest rates are favorable and many loan programs are available to assist buyers.
By The Numbers
According to the October 2009 figures released by the South Central Kansas MLS, existing home sales totaled 746 units and new home sales totaled 94 units, an increase over last month of 11% and 8.0%, respectively. The median sales price of existing homes increased 1.9% on a year over year basis, while the median sale price of new homes decreased to $165,087 from $168,000. Changes in the median sales price of homes don’t necessarily reflect a change in the value of the homes. This simply reflects a change in the price ranges of homes that are selling more successfully than others.
Existing home inventory was down 3.5% to 3,327 units; however, this inventory is 3.4% higher than it was a year ago at this time. New home inventory has dipped slightly over the past month (1% since September 2009) and has dropped 24.1% over the past year, at which time 784 new homes were on the market. Combined, new and existing home inventory totaled 3,922 homes in October, a decrease of 3.1% within the past month and a 2.0% decrease over the past year.
The average Days on Market (DOM) was 59 days for existing homes sold last month, which is relatively unchanged from a year ago. The average List to Sales price ratio (the % of the asking price homes are actually selling for) was 96.69%. This means, on average, across all areas and all price ranges, sellers were only dropping their asking price by 3.31% to sell their homes.
Buyer's Market or Seller’s Market?
In real estate, a buyer's market or seller's market is determined by the relationship between supply (number of homes for sale) and demand (number of homes sold). This relationship is called the "Month's Supply of Inventory” and is calculated by dividing inventory by the number of homes sold. A “balanced market” is considered to be a 5-6 month supply. If the supply exceeds 6 months, the market begins to favor buyers. If the supply is less than 5 months, the market tends to favor sellers. Months of inventory for existing homes decreased from 5.3 to 4.5 in October. This number continues to indicate a slight edge for sellers of existing homes. Months of inventory for new homes decreased to 6.3 months of inventory, compared to 6.9 in September. Again, these figures are across all price ranges and areas.
The SUB-markets
The most noticeable market shift, in my opinion, is currently not categorized by geographical location, but rather by price range. The homes in higher price ranges aren’t experiencing near the buyer activity as the lower priced homes. The market for homes under $180,000 is still moving along nicely. Homes above $180,000 and certainly above $200,000, showed the biggest slow down in recent months. Remember the discussion about Month's Supply of Inventory above? Refer to the table below to see how the price range of your home may be affected by current market conditions.
Months Inventory
0-5 (Sellers Market)
5-6 (Balanced Market)
6+ (Buyers Market)
Price Range | # of Homes Sold in Oct | # of Homes for Sale | Months Inventory | Under 30,000 | 43 | 113 | 2.6 | 30,000-39,999 | 37 | 110 | 2.9 | 40,000-49,999 | 27 | 153 | 5.6 | 50,000-59,999 | 27 | 185 | 6.8 | 60,000-69,999 | 45 | 215 | 4.7 | 70,000-79,999 | 46 | 198 | 4.3 | 80,000-89,999 | 59 | 190 | 3.2 | 90,000-99,999 | 41 | 135 | 3.2 | 100,000-119,999 | 86 | 246 | 2.8 | 120,000-139,999 | 126 | 377 | 2.9 | 140,000-159,999 | 78 | 334 | 4.2 | 160,000-179,999 | 60 | 262 | 4.3 | 180,000-199,999 | 32 | 208 | 6.5 | 200,000-249,999 | 46 | 319 | 6.9 | 250,000-299,999 | 22 | 226 | 10.2 | 300,000-399,999 | 19 | 243 | 12.7 | 400,000-499,999 | 11 | 88 | 8 | 500,000-549,999 | 1 | 15 | 15 | 550,000-749,999 | 1 | 41 | 41 | 750,000-999,999 | 1 | 39 | 39 | 1,000,000-1,249,999 | 0 | 7 | 0 | 1,250,000-1,499,999 | 1 | 9 | 9 | 1,500,000-1,999,999 | 0 | 6 | 0 | 2,000,000-2,999,999 | 0 | 4 | 0 | 3,000,000 and over | 0 | 1 | 0 |
The market for existing homes averaging 4.6 Months of inventory would indicate a slight seller’s market. Glancing at the above table one can clearly see that it depends what price range you're in. Some price ranges are indicating strong seller’s markets, while others are indicating strong buyer’s markets.
This information seems to suggest that the first time homebuyer tax credit and economic conditions have resulted in keeping the lower priced homes moving. Buyer activity for more expensive homes seems to have cooled off this fall. Congress recently passed a new $6,500 tax credit that extends to existing homeowners who sell their home and buy a new one before April 30, 2010. This tax credit may provide incentive for these buyers to consider a higher price range.
Is now a good time to Buy or Sell?
I hope this monthly State of the Market report has been helpful in answering this question for you. My job is to provide you the necessary data so that YOU may make an informed decision for you and your family. While no one can predict the future, I believe this paints an accurate picture of the current market, and it appears to be a favorable time to buy or sell. If you're selling, we highly encourage an aggressive marketing approach, proper strategic pricing, and making necessary improvements and "staging" to improve your home's presentation. The combination of these 3 things will result in a successful sale.
Is it bad to sell during the Winter?
Just after the Thanksgiving weekend, we enter the typically slower sales months of December and January. Even so, please don’t be discouraged from selling your home. Historically, 1,200 to 1,500 homes are sold over the winter months. Please read the enclosed flyer “8 Reasons to Sell Your Home During the Holidays."
Mike Grbic
Mike Grbic Team Realtors
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