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Realtors counter doom, gloom

Lawrence sales, prices down from a year ago

October 9, 2007

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Three Questions with ... Mary Jones, president of the Lawrence Board of Realtors

Mary Jones, president of the Lawrence Board of Realtors, assesses the Lawrence real estate market. Enlarge video

Board of Realtors optimistic about local housing market

The Lawrence Board of Realtors says that the area's housing market is stronger than national reports indicate. Enlarge video

Mary Jones, president of the Lawrence Board of Realtors, meets with members of the Lawrence Board of Realtors at the Douglas County Courthouse. Jones and board leaders gathered Monday to assess the Lawrence real estate market, which Jones says is doing better than national reports may indicate.

Mary Jones, president of the Lawrence Board of Realtors, meets with members of the Lawrence Board of Realtors at the Douglas County Courthouse. Jones and board leaders gathered Monday to assess the Lawrence real estate market, which Jones says is doing better than national reports may indicate.

Fewer homes are being sold and at lower prices than last year in Lawrence, but the numbers are far less fearsome than national reports would suggest, leaders of the Lawrence Board of Realtors said Monday.

And while the board's numbers cast a more optimistic market tone than official numbers compiled by the Douglas County Appraiser's Office, the difference still isn't enough to compare Lawrence's relative slowdown with the sinking prices and sales figures hitting places like Las Vegas, San Diego and other formerly red-hot markets.

"Buyers are a lot more careful here, but it's nowhere near the stories I'm hearing when I talk to my cohorts in other parts of the country," said August Dettbarn, who tracks sales trends as the county's appraisal manager. "I have a friend in California, and some of the horror stories he tells are really, really scary."

Stories like neighbors, living in similar houses across the street from one another, resorting to "reverse pricing" - repeatedly cutting their list prices, fearful that they won't be able to attract buyers unless they offer the lowest price, no matter how low.

"It's like a gas war," Dettbarn said. "We haven't seen that here yet."

But considering such consumer fears - about price cuts, sliding values, unavailable mortgage financing and an inability to sell - is what convinced board leaders in Lawrence to compile basic information about their home market.

There are still plenty of financing options available to buyers, said Mary Jones, president of the Board of Realtors. And homes actually have sold faster during the past year - after 122 days on the market, on average - than the 133-day average of 2006.

Prices are down, on average, by 2.57 percent, she said. And the number of homes sold in the city dropped to 963 so far this year, down 5.5 percent from the same period a year earlier.

But such market realities are no reason to panic, she said, with interest rates still low and plenty of inventory available for buyers to choose from.

"It's an adjustment time," she said of the Lawrence market, lamenting the "doom and gloom" vibe she considers pervasive nationwide. "Everything has cycles, and everything adjusts, and we're just in a little adjustment period."

While Jones and her fellow board leaders took their numbers from the board's own database, which is accessible by Realtors, Dettbarn keeps a database of all such transactions throughout the county.

And through the first nine months of this year, Dettbarn shows that 1,271 single-family homes have been sold in Lawrence and North Lawrence. That's down 296 - or nearly 19 percent - from the 1,567 sold through September 2006.

Prices are holding relatively steady, Dettbarn said. The median price in Lawrence is down $950, or less than 1 percent, to $163,750 so far this year; in North Lawrence, which is tracked as a separate market by the appraiser's office, the median is $122,500, down 3.5 percent.

Dettbarn isn't fazed by national reports, dominated by mounting foreclosures and a credit crunch and properties languishing on the market for months and months.

While some high-end homes in certain pockets of Lawrence are pushing two years on the market, Dettbarn said, homes listed for less than $200,000 aren't staying available for long.

"Cheap stuff is still selling like hotcakes," Dettbarn said.

Comments

huntershaven 7 years, 2 months ago

<< While some high-end homes in certain pockets of Lawrence are pushing two years on the market, Dettbarn said, homes listed for less than $200,000 aren't staying available for long.

"Cheap stuff is still selling like hotcakes," Dettbarn said. >>

What exactly does one get for $200,000 in Lawrence? So far I haven't seen much available for that kind of money. As for high-end McMansions, I would think the utility bills per month would be larger than a mortgage payment for a more modest home in the area that includes some land with it.

huntershaven 7 years, 2 months ago

Reality_Check,

Perhaps your method works in generic suburbs, but I have yet to see it work in any area I have lived in, buyers' or sellers' market notwithstanding. I think you need to talk to the tax offices about how they figure their values since quite a few properties seemingly appreciate annually with little to no improvement in them, sometimes as much as 15% or more in certain areas. It astounds me that the tax assessor can increase the value on a property even though it may have a structure that could only be loosely called a home on it.

Now, as for no desire to negotiate, I am glad it works for you. I know the value of what I have to sell and I know what I have in it. If that person doesn't buy it someone else will. Granted, I don't put myself into a position where I am a desperate seller.

KU_cynic 7 years, 2 months ago

The Lawrence market didn't soar as high as some places, and so naturally it won't "crash" either. But it will slow down, with price appreciation flattening or even turning down slightly for a few years.

This is a big red flag to all the taxing authorities that depend on property tax revenues: DO NOT expect a built in expansion in the tax base attributable to value appreciation in the intermediate future.

My own tax appraisal has always been a little on the high side, in my view, but not high enough to do much about it. There have been three properties on my block on the market this year, and only one has sold. The sellers have all been very motivated, so to speak. You can bet that if the county appraiser tries to nudge my house value up this year I will appeal on the basis of the probably low neighborhood transactions. The tax authorities ought to expect similar behavior by many throughout the county.

Godot 7 years, 2 months ago

My neighbors' house finally sold after being on the market, on and off, for nearly two years. After dumping thousands of dollars into a new roof, new siding, new fence, new wood floors, new appliances, lighting and paint, they ended up getting just $4000 over the county appraised value.

huntershaven 7 years, 2 months ago

Perhaps it is more a matter of supply and demand now working themselves out. I honestly can't see too many homes in the KC metro to Topeka corridor being worth as much as people are asking. Even small starter homes are priced way too high and the estimated real estate taxes are even more out of line.

toefungus 7 years, 2 months ago

Have you ever heard a Realtor say the market was bad?

Greg Thompson 7 years, 2 months ago

Huntershaven,

There is a lot of great properties in Lawrence under 200K, I think I have seen the average home price in Lawrence listed somewhere in the 160K range... I just used the SearchLawrence.com website and found 149 homes for sale in Lawrence under 200K many with 4 and 5 bedrooms. I bought a 7 bedroom home here 6 years ago for under 180K. If you aren't finding homes in that range on your own I would suggest asking a realtor to run a search for you because there are lots of great homes on the market in that range...

I'm currently looking for a 3 or 4 bedroom investment property in the 120K - 140K range. I expect to find a nice home in a great neighborhood in that price range before the end of the year.

I think anyone shopping for a moderate home in Lawrence under 160K stands a great chance for being successful in their home investment. Just make sure whatever you buy is not over priced. Unlike FormerCentralKansan I disagree that "Real Estate Agent = Liar". I actually think it would be foolish for anyone to not have a buyer's agent working for them. Some Lawrence agents are better than others but generally I believe they are mainly pretty decent. There are enough them here in Lawrence that I'm confident if you shop around you will find an agent you can both trust and will enjoy working with. I don't suggest using the agent who is listing the home you plan to buy, there is a conflict of interest in that situation and your best interest may not be served as a buyer. And if you didn't already know it, the agent serving the buyer is paid by the sellers agent, not you. So working with a buyer's agent is free for buyers.

A final note about the Lawrence market, if you are in the market for a high end home in Lawrence, I might wait until the market hype about falling prices starts to die down and then start shopping but there are always deals to be found in any market.

Also remember, location, location, location....

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