Hello, I’m Adam with the Kedish Group at Keller Williams Diamond Partners. Today we have Pam Kedish, the one and only, and we’re going to talk market. We’re going to talk numbers.
Yeah, it has been definitely a wild year. We haven’t had an opportunity to do a good market update for a little while like we went to, and we definitely wanted to get back to that and give you guys an update as far as what we’re seeing, what future predictions are doing, and just really what’s going on with the world right now. It seems like everything is in chaos. Everything is inflated a little bit, and is this going to continue through 2021? So we’ve got some information here we want to share with you.
Particularly, so all of our stats that we get are from the previous month, and typically they come out about the middle of the following month. So we just got everything recently for May. I will say, I am extremely excited to see what June and even July numbers look like. I know that there is a lot of changes in the market. We’re having a different real estate market today than we were even 60 and 90 days ago. January started out, everyone kind of thought, “Hey, everything’s kind of similar.” I really don’t think that the public started picking up on stuff until like March or stuff. Meanwhile, I felt like we were done.
It was a little slow to start.
Oh yeah. Well, that’s what it seemed like. But you know, as agents, I felt like we were kind of like ducks, where everything looks calm on the water, but underneath we’re paddling like crazy. I mean, with everything from inventory, we’re having a lot less inventory than we’re typically used to, to lumber prices. People aren’t aware of steel prices, paint. Paint recently just went up as well. So there’s a lot of information that maybe the public just isn’t privy to just because they’re not into it every day like we are, that we want to make sure that we share a whole bunch of information with you guys.
These are the numbers for May. I’m very excited to see what June does, because I think it’s going to get a little bit better consumer wise, and then we’ll go from there.
All right. Sounds good. So tell us about May.
Okay. What I’m doing right now is I’m going to compare 2020 to 2021.
So May of 2020 to May of 2021.
Both of them are strange in their own right, For sure.
One’s pandemic, one’s post-pandemic.
Right. Well, and you’re still in it, and a lot of industries are still in it, but we’re starting, the world is starting to opening back up again. I really am excited to see what that does for the consumer, because all things are pointing to, it’s going to do a lot for inflation. Inflation is skyrocketing right now. I think it’s going to help out quite a bit.
So here’s what we have, though. So 2021 versus 2020… 2020 versus 2021, if you will, closed sales. Everyone hears we’re making offers on homes. We’re not getting it. Things are crazy. On the surface, it seems like we can’t sell as many properties. A lot of agents are experiencing they’re not selling as many properties. I don’t have the exact number on this. I wish I would have pulled it up before I got here, because I just looked at it. On average, typically we see realtors, they’ll sell two houses a year. The average realtor sells only two houses a year. Right now in 2021, it’s been 0.6.
Yeah. So for as many real estate agents as there are out are, most of them are not even selling a whole house in a year, so that’s a scary fact.
So they don’t know even how to navigate this market.
Absolutely not, no.
So, here’s what we have here. In May 2020, in our Kansas City metro area, we had 3,393 homes close, a lot of homes. In 2021, we had 3,974.
So a little down.
More homes. No.
No, no, it’s more. It’s more. It’s more. Sorry, I got it backwards.
Yeah, flip it around, more homes. 2020 was 3,393, ’21, 3,974. So we actually have more homes that are closing. Everyone’s thinks, “Oh, my gosh, not as much as…” It’s the exact appositive. Yeah, we’re having-
Homes are still selling. People are still buying homes, yep.
A hundred percent. So we’re actually doing more business. Is there more buyers? Is there more agents? Is there market… What is the answer? Well, there’s still a lot of houses out there that are available. Our job as agents is to make sure that the public knows about it.
So we have clients that tell us all the time, “Well, I’m hearing crazy stories. My neighbor had to pay so much over asking price,” but you’re telling me, even though we’re still paying over asking price, we’re still selling more homes?
We are, yes. There was a 17.1% difference in homes sold from ’20 to ’21. We actually sold more inventory. It is definitely a little bit harder today than it was a year ago, depending upon what areas you’re at. If you’re looking in Johnson County under 300, you’re having a hard time.
Lots of competition.
Yeah. I know you had one way up north, way, way up north, not too long ago, it didn’t have any competition. So really it depends on where you’re at.
So you got to get that local information.
A hundred percent.
Not just what the news is saying, or even overall Kansas City. It’s what’s happening in your neighborhood.
Yeah. Even neighborhood specific too. It is. t’s very frustrating when we hear these national statistics. I’m like, you need to break it down at minimum to the Kansas City metro area.
But even then we’ve got Kansas versus Missouri.
But even then you need to talk to somebody.
We’ve got north versus south, everything.
Absolutely. A hundred percent. Average sales price, this is very interesting. So our average sales price in May of 2020 versus 2021, May 2020 was $257,299. May of ’21, 314,313.
Yeah, that hurts for sure. Well, and we’ve noticed that. We do, every Monday we meet and we go over our numbers in depth, and we have noticed our average sales price has drastically increased. Everyone thinks, “Oh, you guys must be living the life,” this or that. No, that’s hard. We’ve got buyers out there that are needing these homes that they can’t get into that a year ago that they could.
It’s not great. So, yeah.
It’s a very aggressive market right now.
Again, localized for sure. But yeah, on average, up 22%. You know that means that on average some of them are up 30 and 40%. Some of them are done a little bit, but that’s on average, 22.2% is what we’re seeing. Pending sales, so pending, so those are homes that are under contract, just waiting to close. This is very interesting. May of 2020 versus ’21, May of 2020 was 4,504 pending sales. In May of ’21 we had 4,737. So that’s definitely a little bit closer. That’s only a 5.2% difference for pending. Now, those are going to close in the next month or right now.
I have a question about this, because this is something that we’ve kind of talked about offline. Yes, we’re seeing pending sales. Is that a sure thing? Is that a done deal, that house is off the market?
No. No. So earlier in the year we had a statistic come out that one in four sales are actually falling through.
So 25% of homes that are currently under contract are falling?
No, not every seller. What I’ve seen more of this year that I have seen previously is it used to be like, “Well, we’d love to be a backup.” “Okay, sure. go ahead.” So a backup offer would be like if you made an offer on the home, didn’t get it, you could submit to be a backup offer in the event that the first one fell through.
Yeah, something didn’t work.
You would automatically get the house. A lot of more consumers, from what I have seen by talking to agents, by talking to different business people around the country, the sellers are not wanting to do as many backup offers, which is very interesting to me, because they feel if it falls through, they’re just going to go ahead and go back on the market and experience the same thing.
It’s not happening, is it? Hmm.
Not as much. We have experienced that. We have attempted to be a backup offer a few times. Sometimes it works out. Sometimes they’re like, “No, we want to go ahead and try it at the market if it doesn’t work out with this one,” because they think that they’re going to get those multiple offers. Well, the thing is, is the market is still shifting. It’s so much different today than it was three months ago, and in three more months it’s going to be very different than it is today. That’s what, unfortunately, the media doesn’t always catch up to that information.
So when they go back on the market, we’re seeing higher days on market now. We’re seeing so much as far as price improvement, price reduction, price this. They’re not getting that activity that they were previously getting. Pirates are are getting exhausted with it, as they should.
That’s been interesting and kind of fun to watch as well. I love the numbers on that aspect.
Do you think buyer remorse plays into this at all? Because I feel like-
A hundred percent.
… we’ve been in these scenarios where we have so much activity on listing, whether we’re on the buy side or list side, and everybody’s fast and furious, let’s get the highest offer in there. But then all of a sudden we’re seeing 25% fall apart, because somebody woke up the next day and go, “Oh, whoa, I didn’t mean to do that.”
Yes, a hundred percent.
Gotcha. So how do you prevent that as a listing agent or as a seller’s advocate? How do you make sure-
I think there’s a couple different ways to do it, and there’s not one thing that you can say, “Oh, do this one trick and you’re going to have your answer.” That’s not it.
I think it’s a combination of talking to your agent… or talking to your client and having an appropriate consultation. “This is what we’re seeing. This is what could happen.” Talking to the agent that’s on the other side, ask them important questions, qualify it then. Do your job, qualify that agent.
It’s not just the price. It’s not the highest price.
No. We have taken offers that have been less priced because we think that it’s actually going to be the one that gets us to the closing table, and it has proven to be a good move.
Asking appropriate questions. Is this something that, have they owned a home before? If it’s going to be maybe in the higher price range with a lot of repairs. Do they know what they’re getting into? Just asking some of those questions that are going to be important. Try to find out as much information as you can about the buyer. Are they going to be sticker shocked when they actually pay 20 grand more than what I had it listed for?
Or what if it doesn’t appraise? What does that look like? If you went well above list price, do they have cash to bring to the table? Because I need to know all of this information so I can go back to my seller and say, “Okay, here’s your pros and cons list. Let’s make an educated decision.”
Absolutely. I think it helps understanding what as is really means, because just because a client or a buyer throws out, “Hey, I want to buy this property as is,” we’re finding out that’s not necessarily the case. They have no intentions of buying it as is.
A hundred percent, yep. So you need to qualify that as well, absolutely.
Okay. So a few stats here that I felt were very interesting. ANZ Bank recently published a prediction. Home sales are going to increase, continue to increase in price by 17% for the remainder of 2021. Everyone keeps saying, “Oh, we’re going to wait until it slows down. We’re going to wait until the crash,” this, that and the other. Great. So with that information-
It doesn’t sound like we’re going to be approaching a crash anytime soon.
Right. The remaining of 2021 is expected to be very busy. We’re supposed to appreciate at a rate of about 17% per their prediction. Now, we all know that that is a prediction. None of us have that crystal ball.
That’s really high.
Yeah, we’re expected to stay busy. We’re expected to slow down in 2022 and only do a 6% increase.
So we’re going to see more of a tapering off, not a crash.
No. It’s still going to be, you know-
Still more expensive than it is today, though.
It’s still more. It’s going to be 17% more expensive than it was last year, and even on top of that 17%, you’re going to be 6% next year. By nowhere is there a negative number. Now, that is still a huge inflation amount, because from 2000 to all the way, 2004 to 2020, we were expecting to get, we would always educate our clients, three to 4%, somewhere in there.
On average in those years, it was 2.2, 4%, which we all know what happened in 2007, ’08, ’09.
That was the crash. That’s when we had a lot-
It would crash on a national level, but as Kansas City found out, we didn’t really. We plateaued.
That is fair to say, that that was a crash. People were losing their homes, this, that and the other. On average, if you had an increase of 2.2, 4%, a typical rate of return between three and 4%, it was pretty fair to say.
Then you drop 17% in there and just (sound effect). Awesome.
Yeah. You have the chaos that we call our lives right now. So yeah, that’s kind of what’s going on right now as far as market update. Things are still very busy. We do not anticipate a huge crash or anything like that. We are seeing a lot more inventory come on the market. We are seeing buyers unwilling to just completely pay astronomical amounts as much anymore. Or if so, we’re having those hard, hard conversations. “How long do you intend to be on the home? Are you able to get your money out of here?” I know on our team, we always think of it like if you buy this house today and you needed to sell it in a year, what will we be able to get out of you?
What does your equity position look like?
Yeah, what would you be able to do? So we want to make sure that we’re having those consultations. We’re really sitting down, making sure that we’re able to make your goals happen, and then letting you know the risk versus reward, because there is that in every case.
Yeah, it’s so crazy. In all of the years that I have looked at numbers and looked at stats and looked at everything, I have never seen so much movement. It’s kind of like if you look at the stock market, you see a little bit of this, and then you see March, 2020, it’s insanity. That’s kind of what’s happening with the housing market. I will tell you, it’s very exciting if you really love to watch the numbers and everything. I love to see it, but it’s wild out there. Overall, though, I think we’re starting to take a little breath where we’re going to have a little bit more breathing room than we otherwise did. By no means is there a crash on the horizon.
It’s still pretty busy and-
Yeah. You really need to just call in and get info for your localized market.
Absolutely. So let’s end on this. This is one question that I get hit up I think daily.
And I know you hear it daily, but I want to hear what your answer is. It’s I guess a two-part question. One, should I buy in today’s real estate market, or should I wait?
Absolutely. If you’re going to buy, go buy now.
Go buy now.
There’s no point in waiting.
Okay. Part two, I think I already know the answer to this, but if I was going to sell in this market, is now a good time to sell, or should I wait if prices continue to go up?
Yeah. Here’s the thing. Agents always know what’s going on right now. I can educate you what’s happening right now. I can give you every prediction under the sun, but that’s all it is, is it’s a prediction. I can tell you right now, based on the information that you give me, if it’s a good time for you to buy or sell or make a move.
I have very rarely had a situation where it wasn’t a good time to make a move. If your intention is to make a move, very rarely is it going to be a situation where it’s not a good move.
Excellent. Awesome. Any other updates for us?
I could sit here and talk for eight hours, but nobody wants to watch that video. Pretty much it’s a very localized situation that’s going on. If you have a question, give us a call. We’ll be able to tell you specifically what’s happening. I would definitely say a lot of people are like, “Well, we’re just going to fix up what we have and then we’ll sell it.” If you’re doing that, that’s okay. If you have no intentions to sell for the next year, that’s okay. Call us, let us tell you what is happening right now and where you need to put that money so you’re not wasting it on something that you’re not going to make any money back on.
Excellent. All right, guys. Well, thank you so much for staying tuned into our market stats update. We hope this information was informative. As always, if you want to find out how your unique position is within this market, please give us a call. We’ll sit down, no obligation, and go over how you’re sitting, what’s a good time to buy, what’s a good time to sell, and what’s right for you and your family. Thank you, guys. Have a great weekend.