Welcome back to our Blooom Brain Pickers series! We’re picking the brains of the best in the biz to inform, entertain, and most of all, educate you when it comes to making personal finance decisions. Due to the current spike in the housing market, we are talking to Kansas City based Staab Realty Group with RE/MAX Premier Realty. Meet Debbie Staab and her son, Thomas…
Briefly, what is causing the current increase in home prices? Is the local market similar to the rest of the country?
A perfect storm of multiple factors is contributing to the current surge in home prices. The biggest of these factors is Supply and Demand. With limited inventory the number of active buyers heavily outweighs the number of available homes on the market. This situation has caused an increase in buyer competition which is helping to drive up home prices and putting sellers in the driver’s seat. Couple that with historically low interest rates (providing buyers with a little more buying power) and historically low supply (under 2 months where a balanced market is around 5-6 months) finding a home AND getting an accepted offer is requiring some strategy and compromise.
Similarly, across the country, home prices are increasing with few signs of hitting the brakes. Strong buyer demand continues to outpace current supply. Currently, Kansas City has shown a strong increase of around 17.9% year over year for median sales price (according to the May 2021 Heartland MLS statistics) compared to the nation’s average of around 23.6% (according to the NAR May 2021 median home sales price). States like Washington, Arizona and Colorado have cities which have seen a much larger increase in sales price.
With prices rising fast and supply limited, there’s a lot of talk right now about a potential housing bubble building in the market. What are your thoughts on that and should people thinking about buying wait for things to “cool down”?
Like everyone, we wish we had a crystal ball. Many researchers believe home prices will continue to appreciate over the next several years. Most believe we are not in a housing bubble. Currently financial institutions have much tighter mortgage lending standards and many homeowners tend to have been in their home for some time and have built up solid equity.
What we like to focus clients on is the long-term goal. Instead of trying to time the market, take advantage of the low interest rates, make a budget and find a home that you can comfortably afford. If your mindset is to stay in a home for 5-7 years, in our mind, there should be little worry. Some buyers are worried about overpaying…but at the same time should also be thinking about these long-term advantages to owning a home: equity, tax benefits, freedom to make updates to the property, a fixed mortgage will remain the same where rent can be raised; to name a few. The longer you stay in a home the greater the opportunity to turn a profit.
Do we believe this trend of 8-15% increase year over year can sustain, no. Do we believe it’s a bubble, no. The more logical possibility says as mortgage rates creep upward and supply increases that we would see a pull back to a more balanced market. But, unless we see a surplus of inventory come on the market and new construction ramp up, we will be dealing with this for some time.
What would you say is the number one obstacle/challenge first time home buyers need to overcome in this market? What is your advice for someone looking to sell/buy in this market?
Be prepared. Don’t walk into the market blind. Do as much as you can ahead of time, including sitting down with a Realtor & lender to get a better understanding of what you are looking for, what your needs are, and what you can afford. This will help a buyer set real expectations. In this market decisions are made quickly – you want to have all your ducks in a row. You want to be confident in your decision but flexible at the same time.
What in your mind is the greatest value of hiring a realtor vs going it alone when buying/selling a home?
Knowledge and Experience! In essence, the Realtor will be able to advise on obstacles that come up during the transaction. Having someone on your side to walk you through the process, from start to finish, allows for the client to have a much better experience. Selling a home can be very emotional and on the flip side, buying a home can be very stressful. Let your fiduciary partner take on most of the load so you can worry about your next steps in life!
More about Staab Realty Group with RE/MAX Premier Realty
Debbie has over 35 yrs. experience in the real estate industry. She has been a full time Realtor since 2001 and licensed in both Kansas & Missouri. She was inducted into the RE/MAX Hall of Fame, received the RE/MAX Lifetime Achievement award and has been a Platinum Club recipient consecutively for the last 7 years. She was consistently in the Top 10 for individuals from 2004-2009 and a RE/MAX Top Team 2018-2019. Prior to becoming a Realtor, Debbie was the marketing director for a national appraisal firm, home warranty account manager, a relocation coordinator and worked in the legal dept for a major real estate company in Kansas City. She’s received numerous awards in her early years as a Realtor; Rookie of the year, top sales agent for volume and number of homes sold. Her broad range of knowledge of the real estate industry and her enthusiasm gives her an advantage in marketing her clients homes and/or finding them a new home
Thomas has been in the real estate field since 2012 and a licensed Realtor since 2014 in both Kansas & Missouri. Prior to returning back to KC, Thomas worked at RE/MAX World Headquarters in Denver as a Senior Coordinator. His background includes a BS in Business Administration from Colorado State University with concentrations in Marketing & Real Estate. He studied at the University of Otago in New Zealand, and was a 2020 graduate of the UMKC Realtor Leadership Academy at the Henry W. Block School of Management. Since then, he has gone on to receive multiple recognitions including: RE/MAX Rookie of the Year, Five Star-Rising Star Award, and RE/MAX 100% Club for the past 4 years running. Thomas brings a multi-faceted background to the team where he leverages his training, education and real estate knowledge to deliver excellent customer service.
While the information from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of the information provided.
Published on July 7, 2021