Your Relationship Realtor

2022 Year in Review!

WOW! What a year for me as a Realtor here in the ever-changing Kansas City Real Estate Market!

This year has been one for the books... for sure! Coming into 2022, there were many similarities to what we all experienced in the 2020 and 2021 housing markets. We still had low-ish inventory, historically low interest rates, very small absorbtion rates (aka- how long it takes the buyers in the market to absorb the current inventory), and many buyers and sellers were still counting on multiple offers with well over asking price and few (if any) inspection related negotiations.... I know, crazy right?! But, with the market insanity we had been facing over that 24 month time frame, buyers still needing to buy and sellers still needing to sell... this was, in some ways, NORMAL?! Yes, this was normal. 

Then came... "THE SHIFT!"

I use the 'Austin Powers- Goldmember' "air quotes" in gest as the market in reality, is always shifting. However, I realize this term is used when the momentum "shifts" from being a strong advantage from one side of transaction (in this case- sellers- aka sellers market) to the other in a very quick and momentous way. Which did actually happen.

In late May/early June of 2022, the Fed did what the Fed does and used a major financial vehicle (real estate) to slow down and off set rising inflation numbers amidst an economic recession. This strategy by the Fed is not new, but certainly doused the flames of what was the hottest real estate market- maybe ever! 

As rates began to rise, seemingly overnight, we saw buyers slooowwww down in their buying speeds. Buyers were forced to reconsider their shopping price ranges as the interest rates have a direct reflection on the estimated monthly mortgage payments. In other words, they could not afford to and became unwilling to compete amongst multiple offers that would lead to higher purchasing prices. Actually, the opposite happened... buyers began to understand that they would either back out of the market or just offer less. Both happened which grinded the gears of the industry to an even slower halt. Homes starting sitting on the market longer than 24 hours. We started seeing "price improvements" every 3-5 days on market, as the houses were still using April/May pricing strategies. Inspection related negotiations starting coming back while "in its present condition" agreements started to fade away. Fair(er) pricing and negotiaons were made by both buyers and sellers to create more of a win-win scenario. Sellers were still able to get strong value for their homes and buyers didn't have to fear not getting the home or "overpaying" for it as often. 

The calm in the storm...

As mentioned previously, I am not a fan of using hyperbolic phrases such as "the market is shifting" as it tends to create tension, nervousness, and confusion... when in fact the market is always shifting. While we as agents and our clients certainly felt the pivot... I prefer to treat the changing dynamics of the market as a way to coach my clients through proper expectations in real time. From June of 2022 through now... things have evolved to what feels like nearly a "neutral market." For my clients, they need me to be that calm voice of reason and set expectations- maybe even have some tough conversations (which I am a HUGE fan of, being the problem solver that I strive to be). They were counting on me to have my thumb on the pulse of what's going on, why, and how to adapt. So we started making adjustments for listing strategies and pricing. Making adjustments for buyers and offers, understanding what the sellers/sellers agents would be expecting (in some cases- the agents were still living in May/June RE world LOL). Being the calm voice of understanding and reason, was one of the points of pride for me this year. 

Where the heck are we going from here?

Great question! As I always say "my crystal ball is broken" LOL. However, I am blessed to have some great brokers that have been through recessions, strong market changes, even the bubble that popped in 2008! I also have close relationships with lenders that are listening to economists and fed talks daily, in regards to the changing interest rates and loan limit atmospheres. This gives me full confidence to provide real time advice and advocate accordingly for my clients. From what they're saying, the fed cannot afford to let off this solution too strongly or too soon. So we may continue to see rates in the 5's & 6's for a bit longer. While those aren't 2's & 3's like before, the current rate atmosphere is still very fair and it doesn't seem likely that we will approach double digits. As of December '22, we are seeing inventory get better and better with each passing month. We are also seeing recession/inflation numbers level off, this is a good thing! What it could mean, is there is a potential for the fed to slightly lower rates as the spring market is around the corner, and inventory for homes has been on a steady incline. Feeding right into what could be a very strong spring market for all parties.

Again, very hard to predict this future as we don't know what or when the fed will do what it does, but things aren't as doom & gloom as the media headlines would like you to believe in regards to the housing market (shocker, I know). The fact is, people will still need to sell homes in 2022. People will still need to purchase homes in 2022. Deaths, divorce, relocations, renters, home resizing... all are and will still be valid reasons for buyers and sellers to play ball in the 2023 market. It's my job to understand the problems and needs of those I work with and provide an educated strategy to win, regardless of the things we cannot control. 

I can help! 

This has been a fun year of learning, growing, and succeeding! No doubt about it, the changing market keeps full-time, professional Realtors sharp. If not, it shows very quickly. I pride myself on being engaged with in-office strategy sessions, constant education, always improving sytems, and staying in the ear of trusted financial partners in efforts to deliver my clients the highest real estate experience possible. Most of my clients would tell you that I am a strong communicator with all things- the good and the tough news. I dive in deep with my clients as to bring a level of care, passion, and compassion for what you the clients are going through. I aim to deliver the basics of what Realtors are expected to provide, but exceed all expecations by going the extra mile for my clients as we tackle the tasks together. 

I look forward to meeting my new client family members in 2023 and contine to learn and thrive in real estate in this amazing city!