When Anna and Craig Patrick bought their first house in Manhattan, Kansas, in 2013, it was an enjoyable experience.
They had plenty of time to look at multiple houses, and there was no rush to make an offer.
“I remember it was so fun,” Anna Patrick said.
Fast forward to 2021. The Patricks started looking in January for a house in Wichita with enough room for the couple and their three boys. And this time, they encountered a housing market where there aren’t enough homes for sale to meet the demand from interested buyers.
“It was just not fun like I was expecting,” she said. “It was just … stressful because you have to decide right away.
“If you don't look at the house, like in the first 12 to 24 hours, it's gone. And if you don't make an offer in the 12 to 24 hours after it lists, you don't really stand a chance.”
Driven by historically low interest rates, the real estate market in the Wichita area continues to sizzle. Even the pandemic hasn’t slowed a market, which – by some metrics – is considered among the hottest in the country.
“It is crazy,” said Sheila Rumsey, chief executive officer of the Realtors of South Central Kansas.
“We have realtors that have been in the business for 30, 40 years and everybody's been experiencing things that they haven't experienced in the past.”
That would include Sandy McRae, a Realtor with Berkshire Hathaway PenFed Realty. She has sold homes in Wichita and nearby communities for 25 years.
She said a balanced real estate market between buyers and sellers requires about a six-month inventory of homes for sale. Right now, she said, Wichita has less than one month of inventory.
McRae said a house with the right qualities — good condition, good location, good price — can host 30 to 50 showings in a day for prospective buyers. And half a dozen offers — sometimes more — isn’t unusual.
“So it's really a seller’s market, very strong seller’s market,” she said. “And as a result of that, buyers are being put in a position of having to really pay more for a house many times from what the house is valued at in order to get it.”
With such a tight inventory of existing homes, new construction would normally help offset some of the gap. But the industry is still playing catch-up after slowing during the recession that ended in 2009.
“Local construction has definitely picked up significantly from what it has been for several years because it has lagged for many years,” Rumsey said.
Of the 654 homes sold in the Wichita area last February, about 8% were new homes. That’s an improvement over the two previous years.
Another factor slowing the construction of new homes is cost. The average cost of a new home sold in February was about 50% higher than an existing home.
“It's very difficult for people to build a brand new home,” McRae said. “I mean, every aspect of the build process, the price is so tremendously high that it's hard for them to build a home and make it affordable for people.”
But some people, frustrated by the lack of existing homes, are going that route.
“You kind of have to weigh, do you want to pay more to get into an existing home, or do you want to get what you really are looking for and go the new construction route?” Rumsey said.
“So I know there's lots of new developments, and builders are busy, so there's a lot of people looking in that direction.”
For buyers on the market, the situation isn’t likely to change anytime soon. Rumsey, with the Realtors group, said national forecasts don’t expect a cool down until perhaps the fall.
“They definitely expect everything to continue in full force for the next six months, at least,” she said. “So it's a crazy time.”
Homebuyers Craig and Anna Patrick found that out quickly: They put in an offer on a new house just after they started looking but didn’t get it. A possible sale fell apart because of problems during closing. They made one of 18 offers on yet another house they didn’t get.
They do have a contract now on a house in southeast wichita, which should close by the end of the month. It has a big backyard and is close to parks and an elementary school. Another perk: two sinks in the master bathroom.
Craig Patrick said people in the market need to remain positive – and persistent.
“I would say that don't let your hopes be dashed,” he said. “Don't give up … there are houses constantly coming onto the market.
“And even though we missed a few, we're really thankful for the one that we found.”
