Booming real estate market expected in 2016

The Kansas City real estate market was strong during 2015 and is expected to be as good or even better in 2016, according to David Cooper, president and CEO of Better Homes & Gardens Real Estate, Kansas City Homes, one of the largest real estate agencies in the Kansas City area. The agency has eight offices scattered throughout the metro area.

Cooper recently answered questions about home sales during 2015 and discussed what he expects in 2016.

Q. What were the real estate sales trends in the Kansas City area for 2015?

A. In 2015, we saw a strong real estate market in Kansas City, especially in the first half of the year. The MLS recently reported that city-wide sales (new and resale) are up 13.6 percent in 2015 over last year. The average sale prices are up 5.6 percent over last year.

Inventory is very low. All year, we have needed more listings. Right now, there is about a four-month supply of homes for sale in Kansas City. Six months of inventory is considered a balanced market. With such a short supply of homes for sale, buyers simply have fewer homes to choose from when looking for a new home. For homes that are priced right, we’ve seen multiple contracts within hours of being listed. It is definitely a seller’s market going into 2016.

Q. What do you see on the horizon for 2016?

A. I anticipate we’ll see a slight uptick for real estate in 2016, as well as the continued need for more inventory. There is speculation of an increase in interest rates which would impact future sales. If inventory stays low, we’ll continue to see home prices rise.

Q. What is your advice for those wanting to sell their home in 2016?

A. For anyone interested in selling their home in 2016, now is a great time to consult with an agent about their home-selling goals. Knowing the seller’s goals, like how quickly a seller wants to sell and how much money they hope to gain from the sale, will help an agent create a tailored marketing strategy for the sale of their home.

By consulting with an agent, a seller will be able to understand more about the other homes they are competing with to gain buyers’ attention. Agents can share key information about other homes currently for sale as well as those that have recently sold in their area. Sellers find this type of information most helpful when trying to determine the best sale price for their home. In Kansas City, we’re seeing that homes which are priced right are selling more quickly.

It’s also important for a seller to remember that how they live in their home every day is not the same way we’ll sell their home. An agent will be able to assist the home seller in determining what, if any, home improvement projects make sense to complete prior to listing the home for sale and give tips about how to stage their home for sale to get it in the best showing condition.

Q. Why is it important for those selling a home to have the assistance of a real estate agent, given current trends?

A. The assistance of an agent is incredibly important. National statistics from National Association of Realtors Profile of Home Buyers and Sellers 2015 indicate that sellers typically live in their home for nine years before selling. Sellers typically turn to the expert advice of a real estate agent to market their home to potential buyers, sell within a specific time-frame and price their home competitively.

An agent serves as an adviser throughout the entire process of selling a home. An agent is an expert on area home values and knows what home improvement projects will get the best return on investment.

National statistics indicate that fewer than 1 in 10 people opt to sell their home as a FSBO (For Sale By Owner; 8 percent of recent home sales, the lowest share since the NAR Profile of Home Buyers and Sellers started in 1981). FSBOs typically sell for less than the selling price of agent-assisted homes. The median price for FSBO is $210,000 while the median of all homes is $245,000, according to the National Association of Realtors.

Q. What is your advice for those wanting to buy a home in 2016?

A. Real estate is still a local business and based on location, location, location. Local real estate agents are experts and in the best position to help find the buyer’s next home. For those wanting to buy in 2016, now is the best time to connect with a local real estate agent to start the process of narrowing down areas of Kansas City that meet the buyer's lifestyle needs. And for those homebuyers who currently own a home and need to sell it before moving, now is a great time to get their home ready to sell.

Q. Why is it important for those buying a home to have a real estate agent, given current trends?

A. Buying a home is typically one of the biggest, if not the biggest, investments that a person will ever make. It may be a buyer’s first time purchasing a home or years since that buyer purchased their home. Either way, the buyer has little, if any, experience in buying a home. Real estate agents help clients with the purchase of their homes every single day. National statistics indicate that buyers’ use of an agent is at historic highs, whereas buyers purchasing directly from a previous owner or through a builder has fallen.

National statistics also indicate that buyers typically search for their home for 10 weeks and looked at a median of 10 homes. Since buyers are looking at so many homes, sifting through all the pros and cons can be all-consuming and difficult. Agents are experts at this business. They know how to help buyers successfully navigate the process of finding and buying the right home to meet their lifestyle needs.

Today, with the market being strong and homes selling fast, agents are also key in alerting clients of homes that are new on the market or have had price reductions. Once the right home comes on the market, an agent can help the buyer gain access to see the home, make an offer and negotiate the terms and price of the sale. I can’t imagine going through the process of buying a home without an expert at my side.

This story was originally published December 18, 2015 at 6:00 PM with the headline "Booming real estate market expected in 2016."