Lawrence October Market Update

In last month's update I predicted a modest Fall Market. With September now over, does it look like I'm correct in my prediction? Or dreadfully wrong? Well, since it's still only the very beginning of October it's too early to tell. However, it's looking much more like I'm dreadfully wrong. Hey, I can't be right all the time! 

So far, the Fall Market is turning up much softer than I was expecting. Interest rates remain high. Inflation seems with out end. Fed policy continues to be reckless. OK, so they've paused raising rates and aren't raising them right now. But we're long overdue for a rate decrease. Many months overdue. So, buyers continue to hang out in a wait-and-see mentality. 

However despite all that, prices remain high. And it's looking likely that we'll end the year with a small appreciation. Nothing like we saw the previous years, but at a modest 1-3% increase. Anyone waiting for prices to go down will keep waiting. And waiting. But home sales continue steep declines from last year. We did not see a September Spike in activity. And low inventory continues to complicate matters. 

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

Month-over-Month

•  September home sales increased a 27.2% from the previous month (67 vs 92)
• Average price increased by 5.8% in September vs. the previous month
• Average Days-on-Market increased 50% to 27 Average DOM!
• 104 homes were listed September, an increase from 81 listed in August
• List-Price-to-Sales-Price Ratio for September was 99.34%

Year-over-Year

• Home sales were down 20.2% in September '23 vs September '22, a drop of 17 homes sold 
• Average Price was up YoY at $349.1K; an increase of 12.1% compared to September '22
• Dollar Volume was down 8.4% vs September '22  for a total of $23.9M in the month
• The 104 homes listed last month was a increase from 102 listed in September last year

YTD

• Home sales are down 26% for the year through September (685 vs 926)
• Average price so far in 2023 is up 2.0% to $335.2K vs the same period last year
• Average DOM is up 30.8% to 17 Days-on-Market
• Total Homes Listed this year equals 895; a decline of 21.4% compared to 2022
• Total Dollar Volume in 2023 is down 24.5%; At the end of September last year the Lawrence market totaled $304.2M and so far this year we're sitting at $229.6M

Active Properties

• There are 119 "Active" properties in Lawrence as of this writing; an increase of 16.7% since my last market update. 
• There are 69 properties currently listed as "Under Contract." This is a decrease of 9.2% since my last market update

This is one tricky market climate! While it still tends to favor sellers, buyers have more power than they have for these past several years. Price drops are more common, time on market is up substantially, and I hear whispers of an increase in canceled contracts. Buyers are pickier. Sellers stand on thinner ice than they're used to. There's lots that can be said about all this, but I'll put it this way: If you're on the fence about buying, get off it now! As soon as rates come down, everyone on that fence jumps back into the market. Smart buyers will find a way to buy now, and work out financing details later. Take advantage!

As I've predicted all year, we're likely to sell less than 900 homes in Lawrence for the entire year. At this rate, it's not impossible we sell fewer than 800. These are Great Recession-era figures. We've literally not seen so few sales since those troubled times. I think this reveals a very strong symptom of a market being pulled in two directions, both on supply and price. Homeowners sitting with a 2.0% interest rate are going to be unmotivated to sell until rates come down. When that will be, at this stage, is anyone's guess.  

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