By CRISTINA JANNEY
Hays Post
The Hays market has maybe hours of housing supply, according to local real estate agents at an economic conference Thursday at BriefSpace.
A four- to six-month supply of homes would be a balanced market, but Kansas hasn't had a balanced market since 2015.
After increasing steadily for about three years, home sales in Ellis County began to decline at the end of 2020. Simultaneously, the number of homes for sale also declined, said Stanley Longhofer, director of Wichita State University's Center for Real Estate.
Year-to-date Ellis County home sales are down about 16 percent compared to 2020.
Tim Cossaart, local real estate agent, said stimulus payments brought buyers into the markets, and as those ended, sales started to fall off. However, he said very low housing supplies is also discouraging buyers.
"When you mentioned hours of supply, we're seeing that on occasion," he said. "If it's in the right price range, and it's the right home, we have hours of supply on those kind of houses."
Robert Readle, Hays Board of Realtors president, said "when a house comes on the market, you might get five to 10 phone calls from buyers who are ready to buy that particular house. If you don't act, it's just too late."
The forecast for Kansas home sales is a 3.1 percent increase for 2021 and a 6.2 percent increase for 2022.
Hays is in what would be considered a seller's market.
The median home price in Hays is just over $150,000. However, Longhofer noted that number can be skewed based on what type of homes are selling at any point in time. If more lower-priced homes are selling, that number will skew down — up if more expensive homes are selling.
Mortgage rates have been incredibly low for a 30-year, fixed-rate mortgage, about 3 percent, Longhofer said.
The Mortgage Bankers Association forecast recently released a prediction that the fixed-rate mortgage will remain below 4 percent until at least the end of 2022. Their forecast to 2023 to 2024 is 4.1 to 4.3 percent.
Readle said he thought a jump in mortgage rates could have a big effect on the home buying market in the coming year. Some buyers are looking at more expensive houses and realizing they can upgrade without increasing their payments, using the lower mortgage rate.
Readle said in the tight market some buyers are opting to take bridge loans. This covers the mortgage on their present home and the their future home until their present home sells. You carry two payments for a short time.
Fewer buyers are entering contracts contingent upon their selling their present home.
Because of the tight housing market, pre-approval is preferred over pre-qualified loans, Readle said.
Readle said he is seeing buyer fatigue. Buyers, especially who have put in the extra effort for a VA- or FSA-backed loans may be outbid by a buyer with a lower cash offer or one that has no contingencies.
Errol Wuertz, real estate agent and appraiser, said he has had problems with some appraisals meeting the selling prices. This has been especially true more recently in Ellis.
The real estate agents said buying and building new homes are comparable in cost. However, not many developers are building right now in Hays.
"We have not met the demand for new housing construction for some time," said Doug Williams, executive director of Grow Hays. "That has contributed significantly to this under inventory problem that we have.
"The only way you add inventory to a market is to build it. If you have not done so in a number of years, you're going to play a catch up game for a long time."
Readle said he is seeing more people from eastern Kansas move into Hays as they are able to sell their homes in that part of the state. Cossaart said he is seeing retirees move to Hays to be closer to family.
Those coming from more rural areas tend to feel sticker shock when they see local home prices, but those from metro areas like Denver see the prices here as low, the real estate agents said.