Area home sales on pace for 20% gains

Shaun Duggins: CJR sales across southern Missouri are up 19 percent in 2015.

Frank Lorenz has plenty to be thankful for in 2015.

He added a new real estate office in Springfield, hired a dozen real estate agents and expects sales to land near $60 million, up from last year’s $35 million.

Lorenz, a founding partner in Southwest Missouri Realty, which launched in Ozark in early 2013, said the company rode a wave of home demand since opening its doors.

“Our Springfield office did as much business as the Ozark office this year,” he said.

In two and a half years, Lorenz said Southwest Missouri Realty has accumulated $100 million in sales. Its partners, who broke off when Murney Associates, Realtors closed its Ozark office, have gained traction in the marketplace via new hires and a stable economy, Lorenz said.

Starting with seven agents, Southwest Missouri Realty now has 34 agents.

“We came in right at what I’d call the start of the recovery in 2013, and it was pretty slow that first six months. But it has been climbing ever since then,” he said.

Home hike
According to data compiled by the Southern Missouri Regional MLS, January-October home sales in Greene, Christian and Webster counties are up 20 percent, compared to the same period in 2014.

Sales this year through Oct. 31 reached $821.5 million, an increase from $683.4 million for the first 10 months of 2014.

With a few weeks left to move homes, the number of units sold is up, too, by 14 percent. Through October, there were 5,391 homes sold across Greene, Christian and Webster counties. The average sales price is up 8 percent in October to $157,127 per home.

Another telling data point, said Greater Springfield Board of Realtors Executive Jessica Hickok, is the months of inventory on the market. This measurement tells real estate agents how long it would take to sell every listing in the market. In October, there were 4.34 months of inventory in the area, which compares to 5.66 in October 2014. Considering a balanced market should have six months of inventory, Hickok said less than that points to a seller’s market – and a ripe environment for new home construction.

“We were definitely in a seller’s market,” Hickok said, pointing to June when months of inventory dipped as low as 3.56. “Anytime the inventory is low, that’s a good indication for builders to start building.

“When it’s low, we need houses to be built or listed, one or the other.”

2016 challenges
Carol Jones Realtors President Shaun Duggins said inventory constraints present certain challenges.

“Inventory is getting low, which I think is driving the average sales price up,” he said. “I just flat out think there’s not enough new construction.”

Lack of new construction, he said, could stifle sales in 2016.

Duggins anticipates CJR’s 12 southern Missouri offices to continue agency revenue growth of 19 percent this year, while selling 1,950 homes through mid-November.

“But I think it will be a little bit slower because we’re running out of inventory,” he said, declining to disclose CJR’s annual revenue.

“It has been the best year in a long time, so that’s enough to get excited over.”

Lorenz said new home construction could really add fuel to the fire next year.

“Subdivisions have been slow to get started now, but once they get going, I think the market will really pick up,” he said. “Resales are where it’s all at right now.”

He said properties between $130,000 and $160,000 seem to be the hottest sellers, and a lot of younger professionals are driving those sales.

“They’re better prepared than they used to be. They’ve saved money, they’ve lived with mom and dad, they have their debts paid, and now they want to buy a house,” Lorenz said.

In Springfield, there were 3,010 home sales through Nov. 24, up 12.5 percent from this time last year, according to Southern Missouri Regional MLS data. The average sales price in the city during that time went up, as well – to $153,737 from $146,115. The median sales price this year was $126,000, up from $122,000 through Nov. 24 in 2014.

Enter the fed
While the Federal Reserve could follow through on talks of increasing interest rates next year, Duggins said he doesn’t believe they’ll go up enough to hurt home sales in the area.

“They’re still hovering around that 3.75 to 4 percent mark. They’re still strong. If anything, I think you could see them in the fives, but I don’t think you’ll see them in the sixes,” Duggins said.

The Federal Reserve Board has said interest rates could be increased by the end of November, depending on economic factors. As of press time, the prime rate on 30-year refinance loans was 3.98 percent, according to BankRate.com. It was 3.05 percent on 15-year loans.

“Buyers are able to get great rates, so they’re able to buy more than what they’d normally be able to buy,” said Paul Dizmang, president and owner of Dizmang Properties Inc. and 2015 GSBOR president.

At Dizmang Properties, he said agency revenue was up 15 percent through October, led by movement of homes listed under $200,000.

“Those are still in high demand,” he said.