Sales of new and existing houses in the Wichita area increased in April, and the market is faced, for the first time in nearly three years, with a seller’s market for existing houses.
According to the South Central Kansas Multiple Listing Service’s April 2013 report, 698 existing houses and 50 new houses were sold last month. That’s up from April 2012, when 627 existing houses and 39 new houses were sold.
What’s more, the MLS said, the months of inventory ratio for existing houses is 4.7. That’s below the 5 to 6 months of inventory ratio that typically reflects a balanced market – a market that favors neither buyers nor sellers.
What that means, said the MLS’ Tessa Hultz, is that there are increasing instances of multiple offers being made on existing houses for sale.
“Buyers expecting to make low-ball offers are going to be disappointed,” said Hultz, chief executive of the MLS and the Wichita Area Association of Realtors.
The area’s new house inventory in April was 5.4 months, the MLS report said. The combination of new and existing inventory ratio was 4.8 months, Hultz said.
The median April sales price for an existing home in the area was $116,500, compared with $108,000 in April 2012, the report said. In the same period, the median sales price for a new home increased from $211,000 to $233,700 in April 2013, the report said.
Not since May 2010 has the area seen a seller’s market, Hultz said, based on MLS data. The market then was driven mostly by a surge in buyers looking to take advantage of the federal homebuyer tax credit, she said, which was expiring.
Greg Fox, broker and owner of Realty World Alliance, said that while existing housing inventory is slimming, sellers shouldn’t assume they can raise their prices significantly or feel certain they are going to get more money from a sale.
“It doesn’t mean the seller can demand more money, because the banks very well might not loan it because of the (house’s) appraised value,” Fox said.
Jordan Freed, team leader and CEO of Keller Williams Signature Partners, said he’s not overly concerned about falling inventory – yet.
“I wouldn’t say right now I’m worried about it,” he said of the number of homes on the market. “(But) it’s always in the back of your mind. You don’t want to sell yourself out of the market.”
Hultz, too, said the shift to a seller’s market isn’t worrisome.
“What I see is everything stabilizing,” she said. “What I’m seeing is us getting back to before the recession and before the buy-up to the recession.
“We’re in this Goldilocks thing where it’s not too hot, it’s not too cold, it’s just right.”
Freed said he sees the sales momentum continuing into midsummer.
“I think July is going to be an awesome, awesome month this year,” he said.