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Archive for Wednesday, October 30, 2002

City cedes unsought housing title

Overland Park ‘most expensive’; Lawrence broker questions survey

October 30, 2002

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Lawrence is no longer the most expensive city in the state in which to buy a home, according to a new national survey.

The new survey by real estate firm Coldwell Banker ranked Lawrence third in terms of affordability among five Kansas cities surveyed. Overland Park and Leavenworth/Lansing were more expensive. Topeka and Wichita were less expensive.

A year ago, the same survey ranked Lawrence as the state's most expensive city to buy a home.

Gary Nuzum, managing broker for Lawrence's Coldwell Banker McGrew Real Estate, said Lawrence home buyers shouldn't read too much into the shift in the survey. He said he wasn't convinced last year that Lawrence was the most expensive city, and he's not convinced there's been such a big shift in affordability since then despite what his company's survey suggests.

"To be honest, there's too much room for error and misinterpretation," Nuzum said.

The survey bases its rankings on the average sale price of a "typical" 2,200-square-foot home with four bedrooms, 2.5 baths and a two-car garage. But it doesn't specify important factors such as age of the home or whether it has a basement.

Last year, Nuzum submitted the price for a new two-story home on a full basement. The average price of that style of home was $218,048. But after seeing last year's survey, he said it was obvious brokers in other markets had submitted less extravagant homes.

So this year, Nuzum submitted the average price for an older, bi-level home. That produced an average sale price of $150,875.

"I was pretty disgusted a year ago by the survey because I felt like I answered the question honestly and then I saw the numbers and felt like some people were playing a game," Nuzum said.

According to the Douglas County Appraisers Office, the average price of all homes sold in Douglas County through September was $159,768, up from $148,467 a year ago.







Here's a look at the average price for a single-family home with 2,200 square foot, 4 bedrooms, 2.5 bathrooms, a family room and a two-car garage, as determined by Coldwell Banker's annual price index survey.Overland Park: $219,337Leavenworth/Lansing: $175,875Lawrence: $150,875Wichita: $147,400Topeka: $124,475Palo Alto, Calif., was rated the most expensive housing market in the country with an average price of $1.2 million. Yankton, S.D., was ranked the most affordable market with an average price of $101,000. Topeka was rated the fifth-most affordable market in the country.

Survey results aside, Nuzum says Lawrence is probably one of the two most expensive markets in the state, either just behind or just ahead of Johnson County, depending on the type of home.

"Our market is no cheaper than it was a year ago," he said. "Overall I feel like our market is about 5 percent higher than it was a year ago."

Lower interest rates may be making it easier for some consumers to buy a home in 2002, even though home prices haven't decreased from a year ago.

"As far as affordability, I'd say it is better than it was last year because we are at 40-year lows with mortgage rates," Nuzum said. "When you can get money at 6 percent, it makes your monthly payment much more affordable."

Chris Forbes, branch manager with Lawrence's North American Mortgage Co., said consumers might be having an easier time buying homes this year because of the economy.

"There are less buyers out there right now," he said.

"That's probably made it a little more affordable than last year because I think some sellers have been a little more reasonable in dealing with buyers."

But Forbes said he still suspected Lawrence was at least the second-most expensive housing market in the state.

"I think overall Johnson County is still more expensive, but we're getting closer," Forbes said. "There used to be a pretty wide gap, and the gap is not as wide anymore."

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