Advertisement

Archive for Sunday, February 8, 2009

Real estate market looking up

February 8, 2009

Advertisement

The Douglas County real estate market experienced a decline in sales last year, but there were signs of an upturn in December.

“Lawrence never really went into the tank, although it did slow down in the fall,” was how the 2008 market was described by Randy Barnes, Lawrence Board of Realtors president.

In 2008, 1,360 properties were sold in Douglas County, nearly all of them residential, according to Board of Realtors statistics. That was down 21 percent from the 1,677 properties sold in 2007.

The number of properties that went under sales contract in October and November 2008 were fewer than what was contracted in those months a year earlier. There was a slight sign of improvement, however, in December, when 53 properties — valued at $8.2 million total — went under sales contract. The number of properties was up from December 2007, when 50 properties valued at $10.3 million total went under contract.

“Is this a trend? Let’s see what the January 2009 numbers are,” Barnes said.

Nevertheless, some homes are still hard to sell. Jennifer Harrell has been trying to sell her Lawrence townhouse for more than a year. Three years ago, when the housing market was still booming, she obtained a 100 percent loan for her house. She still doesn’t have enough equity in it.

“I would have to sell my house for a lot higher than what it is appraised at to afford a down payment on another house,” said Harrell, 34. “That’s what makes it difficult to sell.”

Home foreclosures in Lawrence are up, but they are behind the national foreclosure rate.

The rate of foreclosure among outstanding mortgage loans in Lawrence for November was 0.5 percent, an increase of 0.2 percent above the November 2007 rate, according to American CoreLogic, a California firm that monitors the nation’s real estate market. That’s lower than the national foreclosure rate for the month, which was 1.7 percent.

And new home prices fell in November 2008 (0.53 percent) compared with the same month a year before, American CoreLogic shows.

Comments

invictus 5 years, 2 months ago

Mean while I am going to sit here with my 850 credit score and my mortgage payment that is 1/10 of my monthly income. And watch the whole thing fall apart. I might consider buying after prices had been cut in half. Maybe. I will take another look and reevaluate at that point.

0

invictus 5 years, 2 months ago

low rates? Tax credits? Keep that bubble growing! It will pop eventually. Real estate is a 50 year bubble and some people think it will recover after 2 down years? Delusional.

0

hawkperchedatriverfront 5 years, 2 months ago

As long as Douglas county, the city of Lawrence and surrounding towns do not have a plan to lower their mill levy , no time is a good time around here. The area is devoid of amenties for families, retirees, and certainly with residents of limited means . It is a haven for public housing projects.If the market is so good, how come the realtors aren't buying up properties like they did in the 60s and 70s? Why because in Lawrence, the new apartment complexes have taken over the rental inventory. Students want new. neighborhood groups want old and they are getting it. Just look at the run down 5 target neighborhoods. Thanks to the city for that. They are the cash cow for money from the feds.When the realtors in town start buying up multiple properties in blocks around town, then the truth will prevail.Watch for the next round of valuations. Ask your commissioner candidates if they have plans to lower the mill levy, ask the same of the school board candidates,the answer will be noT, just like the T, EMPTY promises.

0

Godot 5 years, 2 months ago

There is more good news for home buyers: Fannie Mae announced last week that it has reduced the financial requirements for loans it purchases from banks and mortgage brokers. Fannie Mae will purchase loans established with much lower credit scores - below 650 - and the only documentation required to prove income is the borrower's most recent pay stub; that is all, no references, no income tax forms from prior years, nothing. Further, Fannie Mae will not require a current to establish the true market value of the property. In other words, Fannie Mae is now openly soliciting to purchase "liar loans."The bad news is, loans made with shoddy underwriting practices such as those that Fannie Mae is soliciting are precisely what drove our economy into this "catastrophe" in the first place. We, the taxpayers, who now own and guarantee every loan that Fannie Mae purchases, are being forcefully required to guarantee the payment of mortgages given to people with substandard credit history, who are not required to prove that they can make the payments, for a loan that is not justified by an appraisal. These unqualified borrowers will, through tax credits, receive the downpayment for their home via a gift (tax credit) from other taxpayers.This is the hope and change that the ever shrinking group of taxpaying citizens now face.The USA is barrellling toward becoming a country that provides representation without taxation to a majority of its citizens, leading to a future of increased taxation without representation for the minority who remain taxpayers.

0

rusty2 5 years, 2 months ago

totally agree with edge of baldwin. good time to invest inDouglas County/Lawrence.

0

Rachael Sudlow 5 years, 2 months ago

It really is a good time to buy IF you can afford it. I bought two houses in the last 9 months..one for a rental, one to remodel for myself. Sellers are willing to negotiate & if you can get a loan, it's worth going for.

0

LivedinLawrence4Life 5 years, 2 months ago

I just don't believe those who say our equity will be wiped out if we buy a home an put 20% down. The article said that over 1,300 homes still sold in this area last year. That seems like a lot to me. I think I read in a previous J-W article that the average price decline in Lawrence was only a few percent this year and Lawrence wasn't hit hard with huge price declines because we didn't have huge price increases year to year like some cities. I'm willing to bet that Lawrence will rebound quickly.

0

LivedinLawrence4Life 5 years, 2 months ago

Wow! A $15,000 tax credit if I buy this year. That is the best news that I have read from some of the advice in these comments.

0

hawkperchedatriverfront 5 years, 2 months ago

This is in preparation for the new valuation notices to be mailed out. Watch!

0

Godot 5 years, 2 months ago

If you are thinking of buying, or are waiting to close, better hold off until the porkulous bill is hammered out and signed. The bill in the Senate has a provision for a tax credit (not deduction, but credit toward taxes owed) of 10% of purchase price, up to $15,000, that can be spread out over 2 years of tax returns. Anyone purchasing a primary residence is eligible, and the money does not have to be paid back. As it reads now, this is effective only for purchases made after the bill is signed, it is not retroactive to January 1. If you buy between now and the date that provision goes into effect, (if it actually survives the negotiations with the House of Representatives) you are giving up a huge potential tax break.

0

Keith 5 years, 2 months ago

"Real estate market looking up"It's never a down market when talking to real estate people. Right now, whenever that may be, is always the best time to buy.

0

Reality_Check 5 years, 2 months ago

"you are correct that for those who are currently renting, it is a GREAT time to buy."No it's not...it will be when the recession is over and people are working again. It will be when prices return to their historical average. It will be when they return to the same level vs. rent and income growth. But not before. If you buy a house today, be ready for the down payment to be wiped out.

0

grammaddy 5 years, 2 months ago

Good time to rent??! It has never been a good time to rent in this town. The same amount of rent will get you twice as much in Topeka, where I moved from 30 years ago. But, who wants to live there?

0

alm77 5 years, 2 months ago

Livedin, you are correct that for those who are currently renting, it is a GREAT time to buy. I'll give you that. OR, if you've got money to put down, it's also a great time. But some of us, dare I say, MOST of us are relying on our current home's equity to be the down-payment for the next one. So, we're screwed. ;) But yes, if I had a nice $20,000 laying around, we would definitely be buying a bigger place right now. Heck, if we had that, I'd let this place go for what I owe on it. But we don't. So, we can't "move up in house". And we probably won't be able to until we've saved up a bit or our equity begins to go up again.

0

LivedinLawrence4Life 5 years, 2 months ago

So, are you saying that more people should rent until prices equalize? I wonder if more people rent instead of buy, then won't there be more demand for rental property?

0

Ryan Neuhofel 5 years, 2 months ago

Even with the recent decline in home values, the U.S. is still WAY above the average home price (adjusted for inflation) of the past 25-50 years. See graphs at http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/. The housing "boom" starting in the mid-90s (due to easier mortgages) allowed millions of people who previously were not financially capable of buying (in a true free-market system) to buy their first homes. While politicians (on both sides) gloated about their successful "strategy" of increasing home ownership - an excess number of suburban homes were built to meet the new found artificial "demand". It will takes decades to equalize the market - IF we allow it to happen naturally . . . OR we can kick the rusty can further down this road indefinitely with "price controls and aid to needy home owners". Unfortunately, recent history would predict the latter approach.

0

ToriFreak13 5 years, 2 months ago

Just because they went under contract....doesn't mean they SOLD. All the money and stimulus in the world can not help us when lenders and government orgs like FHA are tightening their grips on their (OUR) money. My fiance was just recently denied an FHA loan not because of credit...not because of finance issues at all...but because the bedroom windows were 2"s too high. It took 60 days of lackadaisical processing by the bank just to then be denied because of 2"s.....and btw...that property currently has an FHA loan on it. The Bank blames FHA...FHA blames the bank. There is no way to win this battle....this country is slipping away from the inside out.

0

LivedinLawrence4Life 5 years, 2 months ago

Wow. So are you saying that I should rent instead of buy? I thought the homes I saw this weekend seemed like a good deal. My family doesn't really want to live in Meadowbrook?

0

KansasVoter 5 years, 2 months ago

It seems that all of the commenters except for LivedinLawrence4Life are dealing with the real world. Real estate has a long way to fall before it settles to where it should be.

0

alm77 5 years, 2 months ago

Livedin, it may be a great time to buy, but that means it's not a great time to sell. When you're buying locally, these two things always cancel each other out.

0

Reality_Check 5 years, 2 months ago

"Real estate market looking up"Ha, ha, ha, ha! That's the funniest thing I've read in days! We haven't even gotten into the thick of the Great Recession yet. Home prices this time declined before the recession began, but they normally decline in a recession. That's because unemployment increases; folks with no job can't make their payments and get foreclosed on. Those who still have a job sure don't go buying a house. Unemployment is increasing dramatically with each passing month. The worst is yet to come. As in most places, local home values got way out of whack in comparison to incomes (which will decline this year) and rents (which are stagnant due to the economy and oversupply). The number of homes also increased faster than the rate of local population growth. Only time will correct that...incomes and rents (demand) have to increase to catch supply. And that isn't going to happen in a recession. Then you add in tighter credit standards and 20% down payments, and you have the recipe for at least another 15% decline in home values. Therefore, no, home values are no where near "looking up." If you buy a house today with 20% down, there is an excellent chance you will lose all of your equity in the next 1-5 years. Rent, wait for the recession to end.

0

LivedinLawrence4Life 5 years, 2 months ago

It is true that there are some more "affordable" places to live in Topeka and Kansas City. I prefer the quality of life here in Lawrence and I'm willing to pay a bit more for it. I saw firsthand this weekend while looking at houses that homes have gotten more affordable here in Lawrence. I would bet that some of the builders with homes on the market are taking significant losses on those home. I wasn't trying to be a "shill" for them. I was trying to point out that this is a good time to take advantage of their current situation of having to dump their inventory at lower than usual prices. When the market rides back up to make them feel more comfortable, they won't be feeling this negotiable.

0

LivedinLawrence4Life 5 years, 2 months ago

When people offer their perspective, take it or leave it. I truly think that we will look back at this time in a few years as the bottom of the Lawrence real estate market for this time period and some will wish they could have purchased a home at 2009 prices.

0

1wetwilly 5 years, 2 months ago

'LivedinLawrence4Life' is a builder or real estate agent. If not, then is acting as a shill for one.

0

jail4ceos 5 years, 2 months ago

There are many different ways to "measure" the local real estate market. There is clearly a glut of expensively priced, but cheaply built housing in Lawrence. Regional economic information sources indicate that as the economy is worsening and local employment prospects are too low-paying; an increasing trend of residents-(single family, multi-family, etc.) are moving to more affordable locations in the greater KC-Topeka region.

0

LivedinLawrence4Life 5 years, 2 months ago

I was out looking at homes this weekend. Prices have come down as some builders have adjusted their prices lower. Resale homes seem to be an even better deal right now than new construction as well with home sellers pricing their home more reasonably and some offering to pay buyer closing costs. With interest rates this low and the feds offering new home buyer credits, the real estate market is looking up for 2009. It is a great time to buy!

0

yankeevet 5 years, 2 months ago

No; the real estate market is not looking up.........homes remain overpriced; and they will sit empty for years too come; .........................

0

Commenting has been disabled for this item.