Today’s buyers and sellers face unique challenges, and it’s up to your trusted real estate professional to guide you through them. To help with this we present this mid-year real estate update, which gives relevant information to help you understand what’s going on in your region and at the national level. Dive in and learn all you need to know about the current state of the market. 

 


State of the Real Estate Market

From buyers to sellers, to agents to lenders, the real estate market has had its shares of ups and downs over the past year. Although mortgage rates are higher than a year ago, home prices in many markets are higher than before the pandemic. Despite tight inventory, buyers are starting to see less competition for homes. Sellers who price their home right will stay competitive. 

While the market may be shifting, housing inventory remains tight. Buyers are still facing challenges as they attempt to purchase their desired home.

New Construction is Slowly Rising 

  • Housing Starts: 1.63 million, +5.7% Year-Over-Year 
  • Housing Completions: 1.52 million, +5% Year-Over-Year 
  • Single family: 997,000 
  • Rising lumber prices have added $14,000 to the average price of a new single-family home. 

 

How the 2023 Real Estate Market Differs From the 2008 Housing Crisis: 

  • Tighter restrictions on obtaining a mortgage are in place. 
  • There is less inventory of available homes now. 
  • Job growth is still healthy. 
  • Mortgage delinquencies are still low, only rising 0.4% from 3.0% in 2022 to 3.4% in 2023.  

 

National Market Snapshot 

As mortgage rates continue to shift, so does the migration trend out of cities to the suburbs and more rural areas. Home prices are approximately 50% lower in rural areas and 20% lower in suburbs. 

 

Regional Trends

Existing home sales are down across the country. The median home sales price is also down in all parts of the country except the Midwest, where prices are up slightly year-over-year.

 

Mortgage Stats 

The most popular type of mortgage is a 30-year fixed-rate.

Marry the House, Date the Rate 

If buyers see a house they love, they should consider buying it. They can refinance later when mortgage rates go down. 

Stable 30-Year Fixed- Rate Mortgage 

Many analysts believe that in a future normal market, 30-year fixed-rate mortgages will be slightly higher than in the past 10 years, at around 5-6%.

Experts at Freddie Mac, the corporation created by the federal government to ensure access to home mortgage credit, believe the “housing market has stabilized from a sales and house price perspective.” 

 

Buyer Profile

With the market returning to a more normal pace, buyers may have a bit more flexibility when it comes to making concessions such as forgoing home inspections. But with inventory still very tight, they should ensure everything will be in place, including their financing, for them to make an offer when they see a home they are considering. 

Challenges for Buyers 

  • Low inventories. 
  • Competition from other buyers (especially all-cash buyers). 
  • Home prices.
  • Rising mortgage rates. 
  • Being able to save enough for a down payment. 

Buyers Are Looking For: 

  • Quality of neighborhoods. 49% 
  • Convenience to family and friends. 37%
  • Nearly half (41%) of new-home buyers don not want homes that need major renovations or repairs. 

All-Cash Buyers 

Many millennials are finding themselves competing with boomers, who are flush with cash after selling their homes and either won’t need a mortgage or can put down a significant cash deposit. Twenty-eight percent of all buyers purchase a home with all-cash offers. 

Help for First-Time Homebuyers 

There are government programs that can help first-time homebuyers, including Federal Housing Administration loans, VA loans and USDA loans. Individual states also have housing finance agencies. Many financial institutions also have their own programs. In some circumstances, family members may offer monetary gifts or loans. 

Typical Down Payments: 

  • First-time buyers: 6% 
  • Repeat buyers: 17% 
  • All buyers: 14% 

 

Seller Profile

A tight inventory means the real estate market is still in favor of sellers. In some areas of the country, prices are dropping a bit and homes are on the market longer. In other parts, homes are still seeing multiple bids and selling quickly. Homes that are priced right continue to sell. In 2022, the final sales price was a median of 100% of the final listing price.

Main Reasons for Selling 

  • Desire to move closer to family and friends: 21% 
  • Moving due to retirement: 11% 
  • Neighborhood becoming less desirable: 11% 
  • Home too small: 10% 
  • Change in family situation: 9% 

Median Distance to New Home by Age 

  • 35-44 years old: 21 miles 
  • 55-74 years old: 180 miles 

 

Benefits & Details of Staging the Home

Most Important Rooms Buyers Want to See Staged 

  • Living room: 39% 
  • Primary bedroom: 36% 
  • Kitchen: 30% 

Most Common Rooms Staged 

  • Living room: 91% 
  • Kitchen: 81% 
  • Primary bedroom: 81% 
  • Dining room: 69% 

Made Improvements and Repairs 

  • Minor renovations or fixed broken items: 49% 
  • Major renovations: 11% 
  • Sold home as-is: 40% 

 

Homeownership: The Best Investment 

Eighty-eight percent of buyers view owning a home as a good investment. 

Value of Owning a Home 

  • A fixed-rate mortgage offers stability for month-to-month payments. 
  • Homes appreciate in value faster than inflation. 
  • As you build equity in your home, you increase your net worth. 
  • You may be able to deduct the interest you pay on your mortgage, insurance premiums and property taxes. (Consult your tax advisor for more information.) 
  • Owning a home gives you the opportunity to lay down roots in your community. 

Owning Versus Renting 

In most markets, a median monthly mortgage payment is nearly the same as a monthly rent payment. 

  • Median monthly mortgage payment: $1,964 
  • Median monthly rent: $1,942 


 

State of the Agent

The use of technology continues to increase in popularity, but there is still an emphasis on real-life interactions. Ultimately, skilled, supportive agents are the key to homebuyers and sellers achieving their real estate goals. 

Buyers Want their Agent to:

  • Find the right home to purchase: 49% 
  • Negotiate the terms of sale: 13% 
  • Help with the price negotiations: 11% 
  • Buyers looked for agents who were honest and had integrity, responsive and had knowledge of the purchase process and the real estate market. 

Sellers Want Their Agent To: 

  • Price their home competitively: 23% 
  • Market their home: 23% 
  • Sell their home within a specific timeframe: 13% 
  • Help find a buyer for the home: 13%
  • The most important factors for sellers when choosing an agent were reputation, trustworthiness and honesty. 

 

Questions?

We can help you understand the market in your neighborhood, or any place in the Kansas City Metro that you’d like to be. Call or email Agent, Miles Rost today! 

Mobile: 913-219-0638 | Office: 913-451-4888

 

All stats and information courtesy of BRIAN BUFFINI’S REAL ESTATE REPORT, US EDITION, 2ND BIANNUAL 2023 – Buffini & Company.

 

 

MORE INFORMATION FOR HOME BUYERS

Get our home buying guide & checklist, learn about the benefits of homeownership, and read more blog posts for buyers on our Buyer Resources page. {{ HERE }}

 

MORE INFORMATION FOR HOME SELLERS

Looking for tips and ideas that will help sell your home? You can read more on our Seller Resources page, where we offer our best advice for homeowners considering placing their home on the market. {{ HERE }}