Happy New Year! With 2022 now in the rearview, it's time to take a look at what happened in the month of December, and the impact from the end of the year on the real estate market in Lawrence, KS. Spoiler alert: instead of a bang, 2022 ended on barely a whimper. Suffice it to say that the Fall Market didn't really materialize. Rising appreciation over the past several years coupled with a sudden huge increase in interest rates were enough to pretty much do it in. The shock to the market has been drastic, to say the least.
However, there's still much to be optimistic about, so long as the dose of optimism is taken with a healthy does of caution. The days of 2-3% interest rates are over and they won't be back anytime soon. Inventory is still very low. As long as it is, there should be no major price corrections in 2023. But also gone are the days of 10-15% appreciation. What this all most likely means is that we're entering a slightly more normal market environment for the near future. While it's not the end of the world, it'll take a little bit before reality settles in and buyers and sellers come to a more relaxed mindset. That being said, this is still a Seller's Market. Keeping that in mind should be a priority for anyone looking to buy this year!
All of the stats that follow are sourced from the Lawrence MLS. What follows is a look at some numbers through the month of December 2022 within the city limits of Lawrence:
- December home sales declined by 17 sales from the previous month
- Average price rose 2.5% t0 $335K in December vs. the previous month; Median sales price rose 10%, up to $286K
- Median Days-on-Market dropped from 7 in homes closed in November to 6 days for homes closed in the month of December
- 86 homes were listed in December, a decrease from 126 listed in October a year ago
- List-Price-to-Sales-Price Ratio for December was 96.7%
- Home sales ended the year down 12% in 2022 for a total of 1,147 homes sold
- Average Price ended the year is up 11% at $329K; Median was up YoY 11% to $290K
- Dollar Volume ended DOWN 2.5% for the year; for most of the year it was much higher than 2021
- List-Price-to-Sales-Price Ratio was 99.6% for the year, after remaining over 100% for much of the year
- 2,308 homes were listed in 2022, a decrease from 2,615 listed in 2021
- There are 78 "Active" properties in Lawrence as of this writing
- There are 38 properties currently listed as "Under Contract"
So Far in 2023
- There have been 17 homes sold in the city limits so far this year, down from 25 at this same point in January 2022
- Average Price is WAY DOWN to $295K; Median Price is steeply dropped to $265K so far
- Median DOM is up to 10 Days as of this writing
Yikes! I'll be honest, this isn't exactly great news to start the year. But there are reasons to delay any urge to panic. Overall economic indicators aren't all bad. There is reason to believe that both inflation and rates are topped out for the moment, and maybe we'll see them roll back as the year progresses. We may be in a recession, but many don't expect it will last too long. Job numbers are good at national, state, and local levels. And as long as the market is being driven by the under-supply of homes, prices will stay relatively flat or see modest appreciation.
Locally here in Lawrence, there's probably more good news to put the mind at ease. The Panasonic plant will have a huge impact on NE Kansas and there's no reason that Lawrence won't see some benefit from it. The time is now to get ahead of the issue and build more homes. Whether or not that happens, we'll see. Long story short, demand isn't going away any time soon. The problem is going to continue to be a massively low amount of homes hitting the market. While we won't see as many offers on competitively-priced properties, multiple-offer scenarios will persist. But how we end the year in 2023 is anyone's guess! But I'll go ahead and take a stab at one and predict that in 2023, there will be fewer than 1,000 home sales in the city limits. I don't think that's happened since the Great Recession!
Stay tuned to R+K Real Estate for great new content, updates, advice, opinions and more in 2022. We plan to continue our advance of transparency, consumer advocacy, and empowering our clients with alternate business models designed to provide high levels or real estate service with drastically reduced commissions!
-Ryan Desch, Broker/Owner R+K Real Estate Solutions