Last year was a good year for home sales in the Wichita area and across Kansas.
In Wichita, the number of homes sold increased nearly 10 percent from 2012, according to the South Central Kansas Multiple Listing Service.
Across the state, the number of homes sold increased a little more than 9 percent year over year, according to the Kansas Association of Realtors.
Reflecting trends seen across the country, the rise in home sales was seen in both new and existing homes. And the prices of both also increased.
After four years of sliding home sales, sales in 2013 built on an upswing that began in 2012.
“I feel like the market is better, better than it was,” said Dwyn Thudium, Wichita Area Association of Realtors president and broker and owner of Crown III Realty. “We’re recovering.”
Thudium and others in the industry expect the trend to continue this year – if the supply of existing homes is sufficient to meet demand.
According to the South Central Kansas MLS, 8,975 existing and new homes were sold last year, compared with 8,181 in 2012. In that same period, the median sales price of an existing home increased by $4,900, and the median sales price of a new home rose by $13,367, according to the MLS.
In Kansas, 35,128 new and existing homes were sold in 2013 compared with 32,131 in 2012. The median sales price of an existing home in the state increased by $9,794, and the median sales price of a new home rose $29,084 from 2012, according to KAR data.
“The volume of home sales was up across the state. Most markets had an increase in volume, and we’re starting to see some normal gains in median sales price,” said Chris Rost, president of KAR and a Realtor with Coldwell Banker Antrim Piper Wenger in Salina.
Rost said he thinks 2013 sales were helped by a combination of a lower unemployment rate overall in Kansas, continued low interest rates and pent-up demand starting to break loose.
He expects that to continue, provided unemployment in the state “stays reasonable … and people feel like the economy is at least holding its own.”
“There are a lot of good indicators that say we should have a good 2014,” Rost said.
If there is a wild card in 2014, it’s the supply of homes available for sale.
In Wichita, the months of inventory for existing homes was 4.6 in December. In Kansas, the months of inventory for both existing and new homes (the KAR report doesn’t report separate measures for existing and new homes) was 4.8 months.
Five to six months of housing inventory is considered a balanced market, a market that favors neither buyers nor sellers. A supply less than five months indicates a market that is favorable to sellers. Since July, the figure for existing homes in Wichita and across the state has been below five months.
Rost admitted that housing supply is a bit of a concern for him in 2014.
“I think we’ll have to see what the inventory looks like starting in March or April to really know if we have a shortage or not,” he said.
Stan Longhofer, director of the Center for Real Estate at Wichita State University, said he is not concerned about a lack of housing inventory in Wichita or across the state.
He said his view is based on his conversations with Realtors in Wichita and across the state: The supply seems to be thin because the “good listings” in the “good locations” have been picked clean. “The things that are left are the things that have been around quite awhile,” he said.
Those “things” likely include existing homes that were priced too high, homes that are in less desirable locations, as well as homes that aren’t as in as good of shape as the homes that are selling quickly.
He thinks those homes will work their way to being purchased over time.
Existing inventories will be re-charged in 2014 by the normal spring and summer selling season as well as by rising home prices.
“I do think … we’ll see some upward pricing pressure” that will drive homeowners who weren’t ready to sell their homes to go ahead and do so this year, Longhofer said.
That could include a segment of homeowners who might have been underwater on their mortgages – meaning the home’s value fell during the recession below the amount owed on the mortgage.
“One of the stories could be somebody’s in a situation where they owe so much money and they have to get a certain price or they can’t sell,” he said. “Those situations should also ease in the coming year. As prices go up, suddenly you’ve got a transaction that can close.”
For those reasons, Longhofer thinks supply will come around to meet the growing demand.
“I think calling it a supply issues is probably a little strong,” he said.
And like Thudium and Rost, Longhofer thinks overall home sales in 2014 will build upon 2013’s higher sales.
“My expectation is we’ll see some healthy gains (this) year,” he said.