The 2nd half of 2023 is underway in the Lawrence Real Estate Market. How are things looking? After a pretty decent Spring Market this year, trends have largely failed to maintain that steam. Prices are still up (barely) over last year, but sales and new listings continue steep declines. While low inventory continues to be the main market driver, there are fewer buyers in the market compared to much of the recent past. And interest rates continue to disappoint those who care about housing affordability.
Sales through July of 2023 are down 27% compared with the same period last year. That's an astounding figure! And it's not improving, in fact this represents a continued decline in home sales in both Q1 and Q2 of this year. At of this writing there are 97 active listings. Out of those, 32 listings have had at least one price reduction. The average Days-on-Market for those listings is sitting at 49, and the median is sitting at 31. Those numbers are way above average for sold listings this year.
What might this mean? I think it points to a mind-set among sellers have settled into: that they're able to price a house where they want and they'll get what they're asking for it. But buyers who've seen drastic price increases over the past few years are feeling pressure from both rising values and rising rates. They are settling into a mind-set that says "I'm not going to go crazy for anything right now, especially if I'm not competing with other buyers." However, through it all, cool houses that are in good shape and priced right are still flying off the shelf. It's hit and it's miss.
All of the stats that follow are sourced from the Lawrence MLS. What follows is a look at some numbers through the month of July 2023 within the city limits of Lawrence:
Month-over-Month
- July home sales decreased a whopping 36% from the previous month (117 vs 75)
- Average price increased by 1.1% in July vs. the previous month
- Median Days-on-Market was flat compared in homes closed in July at 4 DOM
- 92 homes were listed July, an decrease from 129 listed in June
- List-Price-to-Sales-Price Ratio for July was 100.0%, down from 101.8%
Year-over-Year
- Home sales were down a massive 44.9% in July '23 vs July '22, a drop of 61 homes sold
- Average Price was up YoY at $333.5K; an increase of 4.5% compared to July '22
- Dollar Volume was down 43% vs July '22 for a total of $25M in the month
- The 92 homes listed last month was a decrease from 146 listed in July last year
YTD
- Home sales are down 27% for the year through July(527 vs 725)
- Average price so far in 2023 is up 1.4% to $333.7K vs the same period last year
- Median DOM is roughly flat vs a year ago: 4 Days-on-Market
- Total Homes Listed this year equals 706; a decline of 24.2% compared to 2022
- Total Dollar Volume in 2023 is down 26.3%; At the end of July last year the Lawrence market totaled $238.7M and so far this year we're sitting at $175.9M
Active Properties
- There are 97 "Active" properties in Lawrence as of this writing; an increase of 5.4% since my last market update.
- There are 94 properties currently listed as "Under Contract." This is a decrease of 6% since my last market update
The end of July and the beginning of August tend to be one of the quieter times of year in real estate. Minds tend to focus on things like vacations and back-to-school. However, I think the above numbers show quite clearly that things are quieter than they really should be. Showing activity is at a low point. Wider economic news comes in mostly negative headlines, with a few positives sprinkled here and there. Whatever is going on it's not exactly inspiring hope in the real estate markets. In some areas, larger markets are seeing price declines this year. While Lawrence isn't there yet, change comes slower here. We're certainly selling fewer houses than we have since years during and after the Great Recession.
Interest rates continue to be a concern. They're just not coming down like they should be a this point. The Fed kept them too low for far too long, and now they're continuing with irresponsible hikes. Bad news for both home sellers and home buyers. I think the reason behind so few homes being listed is too many owners bought or refinanced their current home at artificially low rates. And until rates come down some, they're not moving anywhere anytime soon. Lack of home availability and affordability is a double-edged sword for today's potential buyers. It's a Catch-22 and will continue to be until the Fed changes course.
Back in January I predicted that this year there would be fewer than 1,000 homes sold inside Lawrence. Previously I had stated some optimism that there would, in fact, be more than 900 sales inside Lawrence by year's end. After these past few market update posts, I'm not so sure. With only 527 in the books, and likely fewer 2nd half sales than seen in Q1 and Q2, the trend is leaning towards fewer than 900 home sales for the entire year. OUCH!
Stay tuned to R+K Real Estate for great new content, updates, advice, opinions and more in 2022. We plan to continue our advance of transparency, consumer advocacy, and empowering our clients with alternate business models designed to provide high levels or real estate service with drastically reduced commissions!
-Ryan Desch, Broker/Owner R+K Real Estate Solutions
