Low inventory slows local rebound in home sales
05/22/2014 3:16 PM
05/22/2014 3:16 PM
Home sales in the Wichita area rebounded a bit in April, compared to March, but the housing market remains unusually tight, making it clearly a seller’s market, say experts.
Wichita area home buyers bought 754 homes – 709 existing homes and 45 new homes – in April, which represented a drop of 10 sales from the same month in 2013, according to monthly totals released this week by the Wichita Area Association of Realtors.
So far, there have been 2,410 homes sold in 2014, about 5.3 percent below the 2,544 sold through the first four months of 2013.
April wasn’t the rebound that some were hoping for after a weak first quarter.
“April came up pretty close,” said Greg Fox, a real estate broker and president of the South Central Kansas Multiple Listing Service. “It’s still down for the year, but I don’t know that I’d say ‘Geez, we’re in trouble, and I need to pack up and find a new line of work.’ ”
Fox said one aspect of the housing situation is puzzling and could prove troublesome: the low number of houses for sale.
In April, there were just 2,870 houses on the market, which is 13 percent below last year.
That amounts to a four-month supply. Anything less than six months is considered a seller’s market.
Fox said the low number of homes for sale is likely contributing to the low number of homes sold. Houses that are in good shape and priced correctly should sell fast, while those priced above the market are sitting.
Stan Longhofer, director of the Center for Real Estate at Wichita State University, said this is the second tightest April inventory since the records started being kept in 2001.
The market is especially tight for the middle of the market, he said. The supply is just 2.4 months for houses in the $100,000 to $125,000 price range.
Longhofer said he doesn’t know why the market is so tight, but speculated that it may be because many homeowners are holding their houses back because they are still struggling with being underwater on mortgages. They don’t want to lock in losses by selling the house. But if the market remains tight, home prices will rise and that will lift the market, putting more and more homeowners back into the black on their mortgages.
“So it will fix itself as home values come back,” he said.