Your Home: Median home prices up in November

December 6th, 2016

Median home prices have seen a slow and steady decline since the peak value point of $212,000 at the end of July. That is until November. As of the end of October, the median home price for the Shawnee Mission area was at $197,000. November’s numbers, fresh off the presses, show that although demand is down, median home prices have seen an uptick. The latest numbers reveal that the current median home price as of the end of November is $205,000 which is up 4.1 percent from the previous month.

How is this possible with lessening demand? Most likely, there have been some homes selling in higher price ranges, which has brought the median number up. Nevertheless, it is good news for sellers out there that the market is fighting to hold on to today’s record high values.

The real test for how resilient today’s values truly are will come when we see a noticeable increase in mortgage interest rates. The only reason today’s values, which in many cases are higher than the peak values in 2006, have been tolerated by buyers out there is because the cost of money (interest rate) has remained so low.

The Fed’s next meeting to discuss raising the federal funds rate is scheduled for December 13-14, 2016. US News and World Reports recently wrote that “Fed Chair Janet Yellen and several of her colleagues have indicated as much in recent days, with Yellen saying during congressional testimony last week that an increase to the central bank’s benchmark interest rate “could well become appropriate relatively soon.” It is stated in the article that the fed spoke of the domestic economy saying it has “expanded at a faster pace in the third quarter than in the first half of the year,” including a labor market that had “continued to strengthen” and inflation that managed to “increase somewhat since earlier this year.”

A second contributing factor to pricing will be the current pattern of lessening demand. As you can see from the graph, the percentage of homes each month that are going under contract has been dropping steadily since the peak in April of 51.3 percent. The absorption rate for November ended at 18.3 percent, which compared to November 2015 is down 35.6 percent. To give that number some life, of the 774 homes that were for sale at the end of the month in the Shawnee Mission School District footprint, only 142 of them went under contract. The absorption rate in December of 2015 was higher at 23.5 percent.

As a potential seller, if the amount of equity that you receive is important to you, time is of the essence. Although we have seen a temporary increase in the median sales price, it is most likely just that…temporary. Call us or email us today to discuss how we can create a strategy to ensure that you maximize your equity potential.

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Your Home: A market to be thankful for!

November 28th, 2016

As the turkey hangover wears off and and I mentally plan for my Thanksgiving left-over dinner, I cannot help but reflect on what has been a tremendous year for real estate in Kansas City. As an agent who worked through the recession, it is pretty easy for me to be thankful for almost any market. Yet this year has been better than most. How so you ask? Here are a few examples.

Sellers win, and win again, and then win some more. In 2016, sellers have been the king of the castle in more ways than one. Not only have sellers enjoyed sitting back and watching the offers roll in, they have also enjoyed selling in a day or two for well over list price. And when it came to inspection repairs, in most cases sellers were able to hold a firm line on what they were willing to address because if the buyer walked, they had another buyer waiting in the wings. Tumultuous inspection negotiations during the sale was almost like a pack of sharks smelling blood in the water. The other interested buyers, whose offers were not chosen, were swimming around just waiting for the sale to fall apart.

Historically low rates. For yet another year, interest rates have stayed low. I mean really low. In most cases, less than 4%. That is almost free money in the scheme of things. Low rates have almost become the norm (but not for long). The gift of low rates and high affordability are usually not appreciated until rates go up. Which is on the horizon. CBS news recently reported that a rate hike is likely at the December fed meeting. Low interest rates have allowed values to sky rocket because the low cost of money has lessened the sting of higher home prices. When prices and rates go up, buyers will be able to tell a significant difference. But for now, buyers and sellers alike are thankful for low interest rates.

Sellers are no longer under water. According to Keller Williams Realty International, less than 8% of homeowners are under water or in a negative equity position today. To put this number in perspective, in the fourth quarter of 2011, 25.2% of homeowners nationally were in a negative equity position. I remember those years, and about 1 out of 4 sellers that hired us were writing a check at the closing table to sell their home. I am extremely thankful that our clients today, in most cases, are thrilled at their equity position. It is amazing the difference that five years can make.

Lastly, I am extremely thankful to our readers. It warms my heart when someone shares with me that they read our column on a regular basis and value it as a real estate resource in our community. My goal in the years to come is to continue to provide the community with pertinent real estate news and to earn the opportunity to be your local real estate economist and consultant of choice.

Here’s to you and yours for a joyous holiday season!

Your Home: Fireplace safety tips

November 21st, 2016

There is something magical about the combination of cool fall air and the scent of a wood burning fireplace. Soon enough, neighborhood fireplaces will be in full blaze.

Properly maintained fireplaces can be the crowning jewel of the room during the holiday season. You just cannot forget the “properly maintained” part. A fireplace is no different than your furnace or air conditioning in the sense that it should be serviced each and every year. One big difference is that you service your HVAC to ensure efficient operation. You service your fireplace to ensure efficient operation and to prevent a house fire.

On several occasions I have been present at a chimney inspection when it is determined that there has been a flue fire at some point. On every occasion the homeowner had no idea that there had been a flue fire. Here in lies the danger of a chimney. In many cases, a homeowner does not find out they have a dangerous situation in their chimney until it is too late.

A best practice would be to have your chimney inspected (a level 2 inspection requiring a special camera) and cleaned each and every year. Yes, that includes you gas log people as well. There is a common misconception that only people who burn wood are at risk by using their fireplaces. This is completely untrue. As with any natural gas heating appliance, the concern is proper venting of the production of carbon monoxide. If your chimney flue is dirty or damaged or just not operating efficiently, it could allow carbon monoxide to come down the chimney and into your home. Additionally, the condensation that results from the combustible air cooling during or after a gas fire is highly acidic. Its corrosive power can eat a chimney flue inside out.

Now back to the wood burners. I grew up with a father who I swear waited for the first sign of cooler weather to justify putting in a huge order for firewood. He and my older brother, Jason, would feed our fireplace as if they were feeding the engine of a locomotive. I loved it! As a child, there is nothing like the crack and pop of real wood in a fireplace. (Except when those little embers pop out and surprise you!)

Wood burning fireplaces are awesome and they require the highest level of attention. Creosote, a tar-like substance often found in wood burning fireplace chimney flues, is a bi-product of burning wood. Creosote can itself catch fire and cause a flue fire. Creosote build up can also affect the proper venting of the chimney flue. Here is a great “What you need to know when burning wood” list that I found on the Chimney Safety Institute of America’s website.

  • 1. Get an annual chimney check. Have chimneys inspected annually, and cleaned as necessary, by a qualified professional chimney service technician. This reduces the risk of fires and carbon monoxide poisonings due to creosote buildup or obstructions in the chimneys.
  • 2. Keep it clear. Keep tree branches and leaves at least 15 feet away from the top of the chimney.
  • 3. Install a chimney cap to keep debris and animals out of the chimney.
  • 4. Choose the right fuel. For burning firewood in wood stoves or fireplaces, choose wellseasoned wood that has been split for a minimum of six months – one year and stored in a covered and elevated location. Never burn Christmas trees or treated wood in your fireplace or wood stove.
  • 5. Build it right. Place firewood or firelogs at the rear of the fireplace on a supporting grate. To start the fire, use kindling or a commercial firelighter. Never use flammable liquids.
  • 6. Keep the hearth area clear. Combustible material too close to the fireplace, or to a wood stove, could easily catch fire. Keep furniture at least 36” away from the hearth.
  • 7. Use a fireplace screen. Use metal mesh or a screen in front of the fireplace to catch flying sparks that could ignite or burn holes in the carpet or flooring.
  • 8. Install smoke and carbon monoxide detectors. Place detectors throughout the house and check batteries in the spring and fall. When you change your clocks for Daylight Savings Time, remember to check your batteries.
  • 9. Never leave a fire unattended. Before turning in for the evening, be sure that the fire is fully extinguished. Supervise children and pets closely around wood stoves and fireplaces.
  • 10. The CSIA recommends annual inspections performed by CSIA Certified Chimney Sweeps. These chimney sweeps have earned the industry’s most respected credential by passing an intensive examination based on fire codes, clearances and standards for the construction and maintenance of chimney and venting systems. The National Fire Protection Association also recommends that all chimneys are inspected on an annual basis.

Here’s to many safe years of stockings hung by the chimney with care and s’mores galore!

Your Home: Market shift is leading to price adjustments. Here’s what you can do.

November 14th, 2016

As our real estate market continues to shift out of a seller’s market, price adjustments are becoming more prevalent. The number of homes going under contract is down more than 30 percent in most areas compared to the previous 90 day period. And with such a significant drop in demand, prices must get more competitive.

A shifting market not only puts a spotlight on homes that are over-priced, it also places a magnifying glass on conditional concerns (deferred maintenance or disrepair) and/or a lack of updating. This can be very frustrating to a seller. Buyers will find themselves using things about the home that the seller cannot affect, like room sizes or location of the home, to take it off of their list of potential homes.

As inventory grows, the feedback from potential buyers will get pickier and pickier. And as days on market accumulate, the seller’s anxiety level grows as well because they know that just a few short months ago everything seemed to be selling in a day. And now their beloved home has been rejected time and time again with no logical explanation that they can see.

Well, the explanation is simply supply and demand. When the supply of homes goes up and demand goes down, the real competition begins. You cannot depend on the market to do the heavy lifting any longer. Selling a home requires a solid strategy and a price that is in-line with condition while placing you ahead of your competition. Pricing from 90 days ago is no longer relevant. You have to price in the now!

So is there a logic to a price adjustment? The answer is a resounding yes.

The only way to test a list price is to introduce it to the open market and see if a buyer responds. If a buyer does not respond by bringing an offer, here are a few things to keep in mind.

  • Find a new buyer pool. The goal of a price adjustment is to get in front of a new buyer pool. If you have been on the market for a period of time and have seen a relative number of showings with no offers, then the goal of your price adjustment is to reposition your home so that a new pool of buyers is now made aware of it. To do so typically requires a 3 to 5 percent price reduction. I know this sounds pretty dramatic, but that is what the market requires.
  • Avoid the stair-step method. Honestly, you really only want to adjust the price of your home once. Once the original list price is tested and an offer is not received, then it is the job of the Realtor to identify a price that will cause the home to sell and get there FAST! Just rip the band-aid off and get the home price in-line with the market so you can get it sold. The stair step method is when a seller drops the price (in most cases 2-3 percent at most) about every two weeks or a month.  This method looks like a free-fall to the potential buyer pool and, in my opinion, is simply telling buyers out there that “we don’t know where to price this home so we are just guessing.” When buyers see this, they tend to wait to see how low a home’s price might go, or they may choose to low-ball a seller because they can sense the panic.
  • Don’t own the price. Oftentimes, sellers can be very disappointed when they find that they must adjust the list price of their home. In many cases, it is because they have crunched the numbers and they are counting on the equity amount from the original list price. Or it can be that they saw their neighbor or their friend sell for more earlier in the year and it is a blow to the ego that now they cannot accomplish the same feat. Well, my advice is don’t own the price. Again, we can only test the price once we go live on the market and until then the price is simply a theory based on recent evidence. Once the market has rejected a seller’s price, then the seller must dust themselves off and ask an honest question: “What is the price that will make my home the best home for the buck when both size and condition are taken into account?” In most markets right now, only 2 to 3 percent of active homes for sale are going under contract each week. The seller’s new price must ensure that their home will be the next one to sell. Otherwise, if the new price does not reposition the home, it will only help to sell other homes that are more competitive.

The shift in the market has brought with it a spike in the number of homes that have canceled or expired from the MLS. If your home has recently canceled or expired and you would like to see a fresh approach to selling your home, please reach out to us today. Or if you will be selling in the near future and want to make sure that you stay ahead of the market instead of chasing it, we would be happy to meet with you and share with you our time-tested plan.

Your Home: Residents seeing and feeling the housing downturn

November 10th, 2016

Just this week I was speaking with a new client who lives in Corinth Hills. We were discussing the market when he made the comment that he and his wife had noticed the market has shifted. I asked him why he would say that, and he said they had noticed homes that were once selling in a day — or not even hitting the market — were now taking much longer to sell. One of the first signs of a shifting market that the consumer notices is always that homes are taking longer to sell and they begin to notice the number of for sale signs has increased.

We started discussing the downturn in the market a few months ago and have continued to monitor the shift heading into fall. Several weeks ago I wrote about market downturn indicators and how the Shawnee Mission area was already seeing 3 of the 5 indicators. Well, as of this week, we are now at 5 out of 5.

A market downturn is the period of time between a real estate market peak and the market hitting a bottom point. This bottom point is the lowest point in a market correction. An example of a market correction is when median home prices increase rapidly to the point that many buyers are priced out of the market and decide to get out. Therefore, the buyer pool population drops lessening the demand for housing. The drop in demand causes home prices to drop because inventory will often increase during this correction. More competition equals more competitive pricing. If demand drops off enough, we can see the market shift into a strong buyer’s market where sellers are doing everything they can just to get an offer.

If you look at the slide below, you can see how the market transitions from one market to the next. If you look at the indicators to the right, you will see that all five downturn indicators are currently being met in the Shawnee Mission area. Please notice that some of the indications are slight, for example, average days on market have gone up from 31 days to 33 days. And the number of homes for sale has gone from 633 to 652. Although these changes are only slight, the one to notice is the drop in sales from an average of 90 homes per week 91-180 days ago to only 62 homes per week in the last 90 days. That is a 32 percent drop in sales which is significant.

CyclesI have learned through the years that shifts in real estate happen gradually and then suddenly. The suddenly is the drop in sales, and it has taken many a Realtor’s breath away. Especially the ones who are not prepared for a shift in the market.

In the last two weeks, we have been hired by two Prairie Village families who have been on the market for at least 60 days and have not successfully sold yet. This is the first time that I have listed a previously listed home, let alone two, in a couple of years. In both cases, it seemed that the prior strategy was to let the seller’s market do the heavy lifting. Well, unfortunately, since July, those days are gone. Strategic pricing and conditioning is the only way to get a home sold in today’s market.

I will offer one more example of “gradually and then suddenly” in our market. The graph below shows the months of supply of housing inventory for the last 12 months. As a reminder, months of supply means how many months it would take for the current homes for sale to go under contract based on the current rate of sales per month. If you look at the comparison of last October to this October, you will see that the months of supply is up 49.9 percent comparatively. Now let’s notice what has been happening since April 2016. The supply has been slowing going up. Not dramatically, but rather gradually. That is until October when, BAM, the inventory doubled!

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This current trend will absolutely have an effect on the 2017 spring market. If you are planning to sell in 2017 and would like to put together a plan to keep you ahead of the market, please reach out to us today. We are business planning for 2017 as we speak because we know that it is our team that will do the heavy lifting in the new year, not the market.

Your Home: Are sellers making concessions?

October 31st, 2016

Are sellers making concessions? And by concessions I am not talking about providing snacks for potential buyers. Concessions in this column are the ones that sellers can make towards a buyer when a home sale is being negotiated. In the strong sellers market that we have been in for the last three years, sellers have rarely had to make concessions. And in some cases they are still few and far between. But the times they are a changing and we are now seeing seller concessions entering the picture again.

So as the market continues to shift out of the strong seller’s market, here are a few concessions that sellers may have to consider when selling their home.

Price concessions. Over the last three years, in many areas, sellers have come to see the list price as a starting point. Due to the high demand, sellers have become accustomed to receiving multiple offers on their homes and pricing concessions have been a thing of the past. But that is changing. Price adjustments are becoming more prevalent as sellers do their best to stay in line with fair market value. When an offer is received it is very important to remember (as a seller) that it is not about where you start out in the negotiations. It is about where you end up. Therefore, if you receive a “low ball” offer on your home, don’t take it personally. Just counter and see where you end up. It is also important to know which homes have sold in your neighborhood in the last 90 days or so and for what percentage of original list price did they sell. If the average home in your neighborhood is now selling for 96 percent of original list price it may be unreasonable for you to expect full list price. Especially if you have been on the market for a while.

Closing cost concessions. It has been over three years since I have had a seller pay any of their buyer’s closing costs as part of the sale. That is until the last month. This could be good news for many buyers out there who would love to purchase a home yet do not have the down payment plus all of their closing costs as well to make a purchase. Again, during the strong seller’s market, if a buyer needed closing costs paid either the seller simply said “no” or they added the closing costs to the sales price and made the buyer finance their own costs. The latter is not a bad solution, however, it is not really a concession in that example. At this point we are not seeing sellers pay all of a buyer’s closing costs which could average $4,000-$5,000 depending on the purchase price. We are seeing sellers pay closer to half of the total closing costs at this time. But that could change as the market continues to shift.

Repair concessions. Same song, third verse. Due to the low inventory, buyers have not had the opportunity to expect too much over the last three years when it came to inspection repairs. Many of our listings have sold in “as-is” condition over the last few years. In other cases, the sellers were still able to hold a pretty hard line when it came to repairs that were uncovered during the inspection process. As the market changes and inventory goes up, buyers will be able ask more of the seller when it comes to inspection related repairs. I have said before that in a buyer’s market, it truly is a “price war and a beauty contest” all at the same time. It also becomes a “condition contest”. When buyers have options, they also reserve the right to walk away from a contract and move on to another home if a seller is not willing to address realistic repair requests. So what is realistic? My stance is that inspections were designed to uncover material defects of the home that neither buyer nor seller were aware of prior to contract. In addition, the goal of the inspection process is not to make the home new again. The goal is to identify safety issues, health concerns, or structural issues that should be addressed. Home ownership is wonderful and it comes with responsibilities. The inspection period should not be a time when a buyer gives the seller a laundry list of “honey dos”, if you will, in order for the buyer to shirk said responsibilities.

If you are curious about other affects that the shifting market will have on buyers and sellers in the upcoming days, please feel free to email me with your questions. I am here to help.

Your Home: Some micro-markets haven’t felt the shift…yet

October 24th, 2016

As we continue to monitor the seasonal shift in our market and what I believe to be a market correction at the same time, it is important to understand that there are micro-markets in every real estate market that each perform differently.

An example might be the streets immediately adjacent to the Village Shops in Prairie Village, where all of the tear-downs continue to occur. We have seen record high dollar per square foot numbers in this neighborhood in 2016 due to the fact that not only are these homes highly sought-after by owner-occupants, but by builders and developers alike. As walkability continues to become more and more important to buyers these days, the demand for this neighborhood has continued to increase. Even when similar homes, just west of Roe for example, are selling for less and with less demand.

Please know that because a neighborhood or a price range can operate as a micro-market it does not mean that is is protected or sheltered from the overall market correction. It simply means that the effects of a shifting market (longer days on market and lower median sales prices) may take longer to kick in. I remember prior to the recession I would hear people saying that Prairie Village, Fairway, and other cities like them in NEJC would probably not be affected by the recession. Honestly, I must say that I even drank some of that Kool-Aid because I had no idea what was coming or how devastating it would be for some homeowners. At the end of the day, a market correction affects the entire market. It does not discriminate.

So let’s take a look at a few price ranges to see how they are performing compared to one another. If you look at the table below, I think you will see some micro-markets.

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As you can see, each price range performs differently. Days on market vary depending upon price range. Months of supply also vary. So what do all of these numbers tell us? They tell us that there really can be a “Tale of Two Markets” going on at the same time.

Let’s say that you have a home in the $200,000-$300,000 price range that you would like to sell. But you have heard all year from friends and co-workers that it is really hard to find a home. That there is just nothing out there. As the market is shifting it may be creating more opportunities out there than you know. You can see from the table that although there are currently 102 active homes for sale in that price range in the SMSD and that in the last 30 days 100 homes have gone under contract. This means that it would only take a little over a month for all of the current homes for sale to go under contract at the current sales rate (absorption rate). So your home should sell quickly and for top market value.

Now we move on to the purchase. The same seller who just sold quickly due to a very high absorption rate will now be purchasing a home in the $300,000- $400,000 price range. Currently there are 72 options out there for them to choose from and only 24 have gone under contract in the last 30 days. This means that it would take three months for all of the active homes to go under contract at the current sales rate. The slower absorption rate means that the demand is less in this move-up price range and the buyer will have more leverage. Because the demand is less, sellers will have to price their homes more competitively to get it sold. Sellers may also have to make more concessions when it comes to negotiated repairs as well. And because all of the homes in this price range are not selling day one, the slower absorption rate also takes some of the panic out of the market which I think all buyers appreciate. Being pressured into a quick decision when purchasing a home is something that most buyers loathe. A little breathing room to make a calculated and level-headed decision is always preferred.

In the aforementioned example, the shift has created a perfect storm for the seller to sell quickly for top dollar and then move on to a price range that must price more competitively to sell and that doesn’t fly off of the shelves day one. If you would like to know how your home’s micro-market looks and what your options look like on the other side when you purchase, feel free to email me today and I would be happy to look into it.

Your Home: Your lender can make or break you

October 17th, 2016

In the competitive world of home lending, oftentimes the most highly discussed topic is your interest rate. Radio and TV commercials all advertise the lowest rates possible in an effort to lure you in to working with their institution.

After working through yet another strong selling season, I thought that it would be useful to share with you a few thoughts about lenders, how to choose one, and what to avoid. You see, from the listing side, I have a unique perspective. When we receive an offer on one of our listings, one of my first jobs is to scrutinize the buyer’s lending. I don’t mean that to sound negative. Really, I just want to make sure that my seller understands exactly what they might be accepting (as it pertains to financing) and the risks involved with each offer received.

So let’s get started.

Hire a local lender. This is a big one. As I mentioned earlier, buyers can be attracted to companies like Quicken because they advertise “the lowest rates” and that you can get pre-approved in the blink of an eye. As a listing agent, Quicken scares me to death. If someone can get pre-approved for a home loan in the blink of an eye, then that means that the buyer has received a pre-approval based on a statement of income and no tax returns or pay stubs have been reviewed. The pre-approval is simply based on credit history. More importantly, a local lender is exactly that: local. They, more than likely, understand our local market conditions. They also know that their reputation will help to build or destroy their business. Someone from “who knows where” working for some online pre-approval company is not nearly as concerned about how your purchase goes. If you get mad and leave them for some reason, they will just move on to the next consumer that shows up on their website. Just as “buy local” is the new buzz phrase for goods, “lend local” should be a buyer’s buzz phrase.

It is not just about the lowest rate. Yes, low interest rates are awesome. And the lower the rate, the lower your payment. That said, the lowest interest rate should not be the only reason for selecting a lender. The two lenders that our team refers on a regular basis are both brokers, meaning they work with lots of investors and can shop around to find our buyers the best rate for them based on their financial history. But the main reason that we refer them is that they both have proven systems to ensure that our buyers make it from pre-approval to closing with no problems or surprises along the way. And on the rare occasion that a problem were to arise, both of our lending partners will come to us with a solution in hand. You see, in my business the reliable and trustworthy lenders have a great reputation and the full-time agents out there in the field know it. Conversely, the lenders out there with a reputation of deals falling apart or last minute surprises at the closing table are also known for their poor track record. If you want to blow a lenders mind when you speak to them for the first time…ask them for references. References from clients and agents that they have worked with in the last 90 days will give you a clear understanding of the level of service that they will provide.

When competing, your lender matters. When a bidding war ensues on one of our listings, the lender matters. One of my first steps is to call the lender to verify that the pre-approval that I have in my hand is worth the paper it is written on. I have a list of questions I ask the lender to make sure that the financing is as rock-solid as possible. Plus, you can tell a lot by a lender’s inflection and their demeanor on the phone when you ask specific questions about a buyer’s financing. This means that you must make sure that an agent can reach your lender, even on the weekends. Some of the “big bank” lenders will only give out their office line and would scoff at the thought of being called on the weekend by an agent. Trust me, I fully support life balance and a professional’s right to have down time with their family on the weekend. Yet at the same time, a two-minute phone conversation won’t take someone’s life out of balance and could make the difference when two offers have similar financing with two different lenders and a choice has to be made. A great lender must be a great communicator with not only the buyer, but also the buyer’s agent and the listing agent. This is essential.

Your Home: Weakening demand equals opportunities for buyers

October 10th, 2016

Have you noticed more and more real estate signs lately? And have you noticed that not all of them are selling right away? You are observing first-hand one of the effects of a shifting market.

In most cases, the number of homes for sale coming on the market is not increasing. However, the rate at which they are selling is dropping. This drop in the absorption rate is in direct correlation to the lessening overall demand for homes.

As of the end of September in the Shawnee Mission area, the months of supply of housing inventory has reached a two-year high. The September numbers show that we are now at 3.5 months of housing supply (single family housing only), that is up from 1.8 months at the end of August. The two-year average is 1.9 months so we are well above that point and we are nearly double the inventory compared to September 2015 when we only had 2 months of supply available.

So how does this trend create opportunities for buyers?

When demand goes down, buyer options go up. The number one complaint for most buyers this year has been a lack of inventory. The number of available homes for sale has been frustratingly low. With demand dropping, the rate at which homes go under contract will slow which should create more options for buyers. And it should take some of the “panic” out of the market as well. Please know that certain price ranges can and will perform differently until we are fully into the market correction. Each price range can be its own little micro-market.

No more selling to the highest bidder. If you are one of those buyers who refuses to get into a bidding war, then the market may be moving in your direction. Historically low inventory levels earlier this year helped to create an auction-like environment not preferred by many, except for the sellers of course. As the inventory levels continue to shift in the opposite direction, multiple offer situations may become a thing of the past. Soon, sellers will just have to be happy with one good offer.

Price war. When inventory goes up, usually prices come down. Now this may not be a dramatic drop in pricing, but a drop nonetheless. As sellers have more competition in an environment where demand is dropping, prices must drop as well in order for a seller to sell. As I sit here today, our market has seen values this year that have surpassed the big ramp-up in 2006 and 2007 which preceded the great recession. As I have mentioned before, the current market trends do not suggest that we are headed towards another recession. It does, however, seem very clear that the market is correcting itself after being in an extreme seller’s market for three years now.

Beauty contest. “I have to pay this price for a home in this condition?” This question may also become a thing of the past soon. More seller competition means that not only does it become a price war, but the market also becomes a beauty contest. When sellers are competing for the same buyer, they have no choice but to make sure that their home is in top-market condition if they want to sell. Homes in less than top market condition must price accordingly, otherwise they will simply help other homes sell around them. An over-priced home in less than great condition is the best thing that a fairly priced home in great condition can ask for. When the two are compared, which one do you think will sell first and for a better price? You guessed it!

Your Home: Selling in the fall

October 3rd, 2016

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(Photo credit: Flickr/Carl Mueller)

Those who know me well know that fall is my favorite time of the year. I grew up in Arkansas, so when I moved to KC in 1998 and experienced my first Kansas City fall, I was hooked. In Arkansas, I swear that summer lasts until November, then you have one or two weeks of fall and then straight into winter. But not in Kansas City. Our fall season can actually last for three months. Crazy right?

Oftentimes, once October arrives I start getting the questions, “Have I waited to late to sell my home this year,” or “Do homes sell very well in the fall?” To answer them in order “no” and “yes”.

Autumn can be a great time to sell a home. As noted earlier, the weather is gorgeous and in most cases, people are excited to see a new season. The changing of seasons also alerts them to the fact that if they are going to make a move before the end of the year, now is the time. The upcoming deadline of the holiday season can be a great motivating factor for buyers out there. And as I have said many times before, the most motivated buyer is one with a specific deadline. And a buyer with a deadline can be the most reasonable to work with during a sale. When there is no deadline, a buyer has the option to walk away from a sale and move on to the next.

As it stands right now, if a seller can have their home ready for the market in the next two weeks, the sale could close prior to Thanksgiving. Or if preferred, the week following. Either way, your Christmas tree or menorah could be set up in your new home with plenty of time to spare.

If you choose to sell your home in the upcoming weeks, here are a few things to keep in mind:

  • Leaves in the trees are pretty. Leaves on the lawn are work. When selling a home in the fall, you must know that you are committing to keeping the leaves raked up at all times. I would strongly suggest hiring a lawn company to visit twice a week unless you just love to rake leaves and you have all the time in the world. When buyers see leaves on the lawn, they see a chore that needs to be addressed day one. Those of us who live with mature trees currently know the work that comes with the arrival of autumn. By keeping your leaves picked up during the sale, you can save that little surprise for your future buyer until after closing. Welcome home…here is your rake.
  • Open some windows. Unless your family suffers from seasonal allergies, I would strongly suggest that you open your windows and allow the cool, crisp fall air to visit your home. All of our homes have a certain smell. You know what I am talking about. Most home smells are good. Some, not so good. And we become immune to our own home smell because we are so used to it. When the temperatures are in the 60s and low-to-mid 70s, I would suggest opening some windows. If nothing else, it is a good excuse to check all of your windows to make sure that they are opening, closing, and locking properly.
  • Seed those bald spots. As the temperatures become more mild, now is the time to over seed those troublesome spots in the yard where grass struggles to grow during the hot summer months. Just remember that new seed must stay wet constantly for the first couple of weeks. While keeping the seed wet, do your best not to create a swamp around your home as buyers will want to walk around the yard during a showing. It may be a good idea to make a sign warning of the new seed to prevent potential buyers from stomping all over it.
  • Fall smells great, but plug-ins don’t. Let me apologize right away if you are a plug-ins fan, but I won’t retract my statement. Fall smells like pumpkin spice, nutmeg, cinnamon, eucalyptus, and the like are great. However, they are too much when produced by plug- ins or any other product like them. Please remember that buyers are sensitive to smells. That is why I suggested opening windows earlier in this column. If your home is closed up and you have some device producing a holiday smell 24/7, it can get overwhelming. It can also cause the buyer to wonder, “what are they trying to cover up?” It may sound like a conspiracy theory, but it can happen. A good rule of thumb is that the quality of the scent tends to be in direct proportion to the investment made in the scent-maker. For example, a Trapp candle (even when not lit) will convey a subtle, quality scent as opposed to an over the top scent from some “buy four for $4” device.
  • Don’t be afraid to decorate. Fall decor, like little pumpkins and scarecrows, is received as cute and charming by pretty much everyone. So please don’t be afraid to “fall it up” a bit. These little reminders throughout your home keep the holiday deadline front and center in your buyer’s mind. And because a home purchase is an emotional one, it certainly does not hurt to make your home feel as homey as possible. On a side note, please avoid any life-size scarecrows sitting in rocking chairs, for example. I have seen it creep buyers out and from that point on your home will be known as “the creepy scarecrow house.”