January Lawrence Market Update

Happy New Year! 2023 is now in the books. It was an interesting and bumpy year in real estate in Lawrence, KS. Way back in January last year I predicted that the Lawrence MLS would post fewer than 1,000 homes sold through the year. Early on in the year, as sales started to truly lag, I began to predict there would be fewer than 900 homes sold.

Well, how'd I do? Nailed it! Only 888 homes sold on the MLS within the city limits. That's an eye-watering 22.6% decline from the prior year. Despite this, prices did not decline like some people might have assumed. Or hoped! Indeed, prices rose a very modest 1.8% for the year. I've said it all along, anyone waiting for a decline in home prices is just going to keep on waiting!

December was particularly interesting when compared with the rest of the year. The month saw an increase in sale from the previous month and from December of 2022. That was to be expected. Back then, rates had risen quickly and most buyers and sellers had hit the "pause" button. By the Holidays in '22, sales had slumped to an excruciating crawl. But what happened with price this past December is particularly intriguing. While sales rose a staggering 23.6% from November and 36% year-over-year, average price dropped under $300,000 for the first time since January of 2022! 

What to make of such a sudden drop in price? Is there a chance I'm wrong about home values not declining anytime soon? Time will tell. It's too early in '24 to know exactly where the market will take us this year. But my educated guess is that the average for December will represent a blip, not a trend. Activity is stirring up quickly for the first couple weeks of January and we are already much busier than we were a year ago. Inventory remains very low. Look for a big swing back up by the end of this month and as we head into Spring. 

All of the stats that follow are sourced from the Lawrence MLS. What follows is a look at some numbers through the month of December 2023 within the city limits of Lawrence:

Month-over-Month

• December home sales increased 23.6% from the previous month (68 vs 55)
• Average price decreased by 18% in December vs. the previous month, down to $294.9K
• Average Days-on-Market was flat at 23 Days-on-Market
• 51 homes were listed in December, a decrease from 73 listed in November
• List-Price-to-Sales-Price Ratio for December was 98.9%

Year-over-Year

• Home sales were up 36% in December '23 vs December '22, an increase of 18 homes sold 
• Average Price was down YoY 11.9% compared to December '22
• Dollar Volume was up 20.4% vs December '22  for a total of $20.1M in the month
• The 51 homes listed last month was a decrease from 54 listed in December last year

YTD

• Home sales were down 22.6% for the year (888 vs 1,147)
• Average price in 2023 was up 1.3% to $333.4K vs last year
• Average DOM is up 35.7% to 19 Days-on-Market
• Total Homes Listed in '23 year was 1,130; a decline of 14.7% compared to 2022
• Total Dollar Volume in 2023 was down 21.5%; At the end of the year in '22 the Lawrence market totaled $377.3M and 2023 ended up totaling $296.1M

Active Properties

• There are 109 "Active" properties in Lawrence as of this writing; an increase of 9.9% since my last market update. 
• There are 49 properties currently listed as "Under Contract." This is a decrease of 25.8% since my last market update

Many of these figures align pretty closely with my predictions to start last year. Homes sold would decline significantly, days-on-market would go up, and home values would see much lower appreciation than the previous several years. All of this is exactly what we saw! But there is ton of good news heading in to 2024! Interest rates have declined from mid 2023 peaks. Today they sit in the mid-to-upper 6's. Other economic indicators, while not glowing, aren't too terribly gloomy. If this situation holds, expect buyers to jump into the market in greater numbers this year. More homes will be available, more homes will sell, days-on-market will hold or slightly decline, and prices will increase at a higher rate than last year. 

Spring is just around the corner. Life moves on, supply shakes out, and buyers will become accustomed to a "new normal" of 5-7% interest rates. It's still a seller's market! And it's going to be so for the time-being. There's simply not enough new development to even out the market. All buyers and sellers should keep this top-of-mind this year.

And with such a dynamic and continually changing marketplace, it's crucial to seek the advice of a trusted professional. Don't pin one of the largest financial decisions you'll make in 2024 to a "hobby" or part-time agent who only sold a couple houses (or less) last year. I cannot stress enough how critical it is to consult an experienced agent!

This year will mark my 11th year in real estate and I'm looking forward to serving as a Regional Vice President for the Kansas Association of Realtors. I'm designated as a Certified Real Estate Specialist, an Accredited Buyers Representative, and I'm a Graduate of Real Estate Institute and a graduate of KAR Right Track Academy. R+K Real Estate sold over $10M in sales volume in 2023, selling 30 homes. And to top it all off, we only charge a 1% listing fee! If you're looking for experience and value, we promise you won't find as effective an intersection of the two with any other agent in Lawrence! 

Stay tuned to R+K Real Estate for great new content, updates, advice, opinions and more in 2024. 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