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Archive for Monday, May 11, 2009

County appraiser: Housing values, real estate sales down from last year

Joel Sauer and his wife, Brooke, prepared to close on their first house earlier this year. Early returns suggest Douglas County homeowners will see a significant drop in their property values by 2010.

Joel Sauer and his wife, Brooke, prepared to close on their first house earlier this year. Early returns suggest Douglas County homeowners will see a significant drop in their property values by 2010.

May 11, 2009

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Early returns suggest Douglas County homeowners will see a significant drop in their property values by 2010.

New data from the Douglas County Appraiser’s office show that area real estate activity is down, and so are the prices that single-family homes are fetching through the first four months of 2009.

“At this point, I haven’t seen the signs of a rebound,” said Douglas County Appraiser Marion Johnson.

Based on sales data gathered by the department, the number of real estate sales in Douglas County is down 31 percent through the same four-month period in 2008. The number of sales totaled 345 through April, down from 501 during the same period a year ago.

Prices also are in retreat. The median selling price for single-family homes is down about 6 percent thus far. That represents an acceleration of a downturn that began in 2008, when average prices dropped by about 2.5 percent to 3 percent, Johnson said.

Currently, the median selling price for homes is $179,900. The last time the average price was that low was 2006, when it checked in at $176,900.

National statistics indicate Lawrence’s market is still holding up better than overall averages. Johnson said data he has shows single-family home values have dropped about 15.5 percent nationally.

In his monthly report, Johnson also noted a USA Today article that indicated it may be awhile before the real estate market in Kansas picks back up. The article estimated it will be 2012 or later before the supply of excess homes in the state is substantially depleted, requiring new construction to begin.

But Lawrence builders believe the situation is better here. Bobbie Flory, executive director of the Lawrence Home Builders Association, said her group has seen signs of improvement this spring.

“I think the builders have a little bit of hope right now,” Flory said.

Flory said builders and real estate agents have reported an increase in the number of people out looking at homes, and she said crowds at the recent Spring Parade of Homes were larger than in the past.

“I think what we’re going to see is an incline,” Flory said. “It won’t be a shot to the top like we saw in 2005, but I’m more optimistic now than I have been.”

The numbers that Johnson’s office is gathering will be used to determine the value of Douglas County homes on Jan. 1, 2010. Property owners will receive those new tax values in March.

The property values will be used by city and county commissioners to set budgets and property tax rates for 2011.

Comments

Steve Jacob 5 years, 7 months ago

Honestly, the Appraiser’s office did not lower the home values enough enough last year, and will have to make it up this year. Sure, people are buying again, the government is basically giving you the down payment and guaranteeing the loan, but interest rates will soon go back up.

Ryan Neuhofel 5 years, 7 months ago

I will insert the standard "Real Estate agent" comment to save them some time . .

"Now is a great time to buy a house! House prices will certainly start to rise in the third-quater."

karmaxs3 5 years, 7 months ago

We looked for months for a house in Lawrence that was less than $300,000 that didn't need at least $50,000 put into it and was located in a decent neighborhood. Doesn't exist. The real estate market here is ridiculous, and even though Lawrence is a great community, it isn't worth paying the premium for real estate here when two large cities with more realistic property values and city amenities are so close.

If people here want to sell their homes in the next few years, they'd better start looking at lowering their expectations. Lawrence isn't as cool as it used to be....

Chris Ogle 5 years, 7 months ago

Karmax, I couldn't agree more, and I own some stuff in Lawrence..... The taxes are so bad here, that it doesn't even make sense to buy (or even own, outright) in Lawrence...... but here I sit, waiting for true market values (what you can actually sell something for) to level out.

Welcome to Lawrence Kansas.... are we special...NO... some just think so.

Richard Heckler 5 years, 7 months ago

The residential "boom town" economy has come back to bite us in the butt. The market was flooded before the national scene took place so welcome to a double whammy.

The city commission has no intentions of being a positive player. This commission will continue business as usual....approving more and more residential no matter what. Their answer is "get more people to move to Lawrence".

The answer is tighter markets hold property values up not down.

http://www2.ljworld.com/polls/2007/sep/why_do_you_think_lawrence_growth_lagging/

Over the years Lawrence has approved approximately 5000 more homes than the market dictated on a "build just in case someone shows up" notion. Face it flooded residential markets are unfriendly to property owners.

This commission will continue to refuse performing Market Capacity Studies that would determine what the Lawrence market can absorb in residential and retail. One could imply government does not want to know!

This commission will continue to refuse performing a Cost of Community Services study that would help determine what growth is or is not paying back. This could also provide direction for governing bodies. One could imply government does not want to know!

This commission will also refuse economic impact studies to be performed before approving any new projects that come before the city commission. One could imply government does not want to know! Face it flooded retail markets are business unfriendly which apparently influenced the decision of Banana Republic to decline Lawrence not too long ago.

These are not new tools. Lawrence has simply refused to mandate use of these tools. Frankly there is no one on the city and county commissions that can "just know these things" and there never has been.

25 years of decisions based on speculation is coming back to haunt the taxpayers/property owners. Radio news is not optimistic about markets bouncing back anytime soon.

Richard Heckler 5 years, 7 months ago

http://www2.ljworld.com/polls/2007/sep/why_do_you_think_lawrence_growth_lagging/

======================================== This information was presented in a public meeting Saturday May 9th with David Longhurst,Mike Dever and Kirk McClure as guest panelists at the library.

Basic Findings: 1. Lawrence is overbuilt in housing: Homes were built faster than popualtion growth supporting these homes. Excessive subdivisions caused an outmigration from older neighborhoods causing a severe loss of value, a loss of dwelling units, and a variety of other problems such as school closings.

  1. Lawerence is overbuilt in retail: Stores were built faster than retail spending growth supporting these stores. This excessive growth has hurt the public and private investment in downtown redevelopment (e.g.: the empty $8 million parking garage, the empty Hobbs-Taylor space, etc.) and has caused deterioration and blight in existing shopping centers (e.g.: Tanger Mall, Food-for-Less, etc.)

  2. Douglas County is overbuilt in manufacturing and warehousing; employment in these sectors is declining, not growing. Yet, the Chamber calls for more and more space in the false belief that more supply creates more demand.

  3. Office space in Douglas County is relatively well balanced, but the market for office space is severely crippled by the excessive supply of unused retail space which is competing for office tenants.

Basic strategy:

Lawrence should adopt a policy of "cooling off" the pace of development. Note: This is not a moratoriam; it is a consicous effort to redirect growth to existing neighborhoods and districts where it can be beneficial.

Housing: The city should stop approving new subdivisions until the existing supply of surplus homes is eliminated. It should direct housing investment back into older neighborhoods so as to preserve and protect the existing public and private investment there.

Commercial space: The city should stop approving plans for new commercial space until the existing surplus is eliminated. It should direct investment into the preseration of the downtown and other existing commercial districts so as to preserve and protect the existing publid and private investment there.

Kirk McClure

Education Ph. D., City Planning, University of California, Berkeley, Department of City and Regional Planning, 1985. Concentrations in Housing Economics and Public Finance.

Master in City Planning, Massachusetts Institute of Technology, Department of Urban Studies and Planning, 1978. Specialization in Housing Policy Analysis.

Bachelor of Arts, University of Kansas, College of Liberal Arts and Sciences, 1974. Special Major in Urban Studies.

Bachelor of Architecture, Graduated With Distinction University of Kansas, School of Architecture and Urban Design, 1973.

Michael Capra 5 years, 7 months ago

merrill you and kirk must be secret hand shake pals

Michael Capra 5 years, 7 months ago

larry nothrop reality executives beware of this guy

LivedinLawrence4Life 5 years, 7 months ago

Beware of a Plumber named Mike Capra who continuously slanders people online using the blog name 458casul.

Chris Ogle 5 years, 7 months ago

I think merrill needs a bigger comment box..... or condense the report to a few comments. xbusguy, PHD (post hole digger)

kujayhawk83 5 years, 7 months ago

Kirk is probably correct on his numbers but he is wrong on his conclusions. The problem is not the supply, it is the demand, or lack of it. Real estate was reasonably in balance and trending modestly upward until the demand dropped precipitously. The supply side takes care of itself over fairly short periods. Lenders, builders and developers won't risk their time and money if the demand drops for too long. The city leaders must do everything possible to attract jobs now. That is the most effective way to increase demand, reduce any over supply and grow our tax base.

poppygirl 5 years, 7 months ago

I have been confused for some time and looking for any answer to this question: "Why would you put your house on the market for MORE than your current or last year's appraisal and honestly think you are going to sell it?

jafs 5 years, 7 months ago

poppy,

If you're referring to the county appraisal, people often try to keep those lower than "market value" in order to keep their taxes lower.

County appraisals often don't take account of improvements to interiors, etc.

Houses often sell for more than their county appraisal value.

poppygirl 5 years, 7 months ago

Thanks Jas, so I get the "market" value of a home by a real estate agent, versus dg county appraiser information on line? I had admired a few for sale in lawrence, but after looking on line at the appraisers value versus the selling price, I was quite confused.

Godot 5 years, 7 months ago

Perhaps the reason the median selling price has dropped is due to the $8,000 credit for new homebuyers. This is bringing in the first time homeowners who, even with the $8,000 gift from Obama, still cannot afford to spend a lot on a house, so the lower priced homes are the ones that are selling. It does not necessarily mean that the value of all houses is dropping that much.

Would be nice to see some graphs comparing home sales and prices over the last several years.

KsTwister 5 years, 7 months ago

Lawrence just keeps building but face it; the city is geographically challenged. The same main transportational arteries of the '60's---just with more people on them. Add a few thousand more vehicles, who would notice at this point.

KU_cynic 5 years, 7 months ago

Personally, I think it's all the unsightly dandelions . . .

spammer89 5 years, 7 months ago

I think more houses would sell if people did not have commute to work since the job market sucks in this town. Some will get tired of the commute and opt to buy a house elsewhere for a lot less money and get more house.

avoice 5 years, 7 months ago

It could be worse. You could live in Baldwin.

newtongirl 5 years, 7 months ago

The $8000 gift from Obama originated as a $7500 interest-free loan from Bush, which turned into a gift later on. 5 months into his administration, I'm not ready to pin this on Obama just yet.

Other reasons are that nobody has any money/jobs right now, and the trend for wanting a McMansion has also waned.

Also, median selling prices and median values are two different things.

This roller coaster started in 2006 and it's just now catching up to Lawrence. Lawrence real estate has always been higher than it should be, so now that it's falling a whopping 6% to "normal" some people are panicking.

The Bush-originated incentive is not the reason that home prices are dropping nor the reason people can't afford a $300,000 house. A vast majority never could afford a $300,000 house regardless of whether or not they're actually IN one, and THAT'S the reason home prices have dropped.

BigPrune 5 years, 7 months ago

Housing values, real estate sales down & Taxes go up!

mom_of_three 5 years, 7 months ago

karmax - looked for a house in a decent neighborhood, for under 300,000 and didn't find one that didn't need $50,000 in repairs. All I can say is that you must be very picky.

craigers 5 years, 7 months ago

mom_of_three, if he was starting at $300,000 then yes being picky is the word. My wife and I found a home that was over twice as big as our old house and if we could sink $50,000 into it we would have $247,500 into a house with a newly remodeled kitchen, bathrooms, overhauled basement, new paint outside, and maybe even a deck extension. Over 2700 square feet and newly remodeled would be pretty sweet so if you can't find a satisfactory house for under 300K you are certainly being picky!!

jafs 5 years, 7 months ago

poppy,

It's actually quite difficult to get a good "market value" number.

Appraisers are generally in cahoots with banks, and may fudge numbers to make loans go through.

If you're looking to buy, though, it's much simpler. Do you like the house enough to pay what they're asking for it?

The whole appraisal thing is more of an issue for sellers.

You could look at other similar houses in similar neighborhoods and see what they're selling for, if you want to get an idea. That's basically what appraisers do.

karmaxs3 5 years, 7 months ago

I'm very picky. I have two small kids I'd rather not eat lead, and I'd like them to have a yard to play in without high tension lines in the back yard or high volumes of traffic by the front door. Plus, I'd prefer to stay out of the flood plain and would rather not live next to all night partyin' college students or meth dealers.

Dang, so picky, sux to be me.....

jafs 5 years, 7 months ago

You really should be able to find a house for under $300K that matches your requirements, even in Lawrence.

dandelion 5 years, 7 months ago

And I'll bet those kids all need their own bedroom, bathroom, and family room just for the kids, so you don't have to deal with them. Whatever happened to 1 living room and everyone getting to know one another? What happened to siblings sharing a room, and learning to share with others. These McMansion people are just scary.

bad_dog 5 years, 7 months ago

karmax, lead paint has been banned since at least the '70s. Encountering that in a resale home isn't likely in many parts of Lawrence. I believe lead paint disclosures are required in Kansas as part of the real-estate listing agreement.

There are two homes for sale in my neighborhood at this moment that meet or exceed your description for less than $300K. If you are serious and really need help, either get a real estate agent or go to hometownlawrence.com and look for yourself.

At this time, hometownlawrence.com indicates there are 92 properties on the market with 3 bedrooms, 2 baths, priced between $200-300K. The first listing I saw was almost 3200 sq. ft. I don't know if it meets any of the rest of your needs, but have fun finding a new home!

bad_dog 5 years, 7 months ago

I should have said 3 or more bedrooms and 2 or more baths...

karmaxs3 5 years, 7 months ago

My main requirement at this point is to NOT live in Lawrence....I'll not elaborate too much since you've all ASSumed what you will. But...

We've looked at every home listed in Lawrence under $300K in the last four months. Some cost even more than that. Just because they have a bunch of square feet doesn't mean they're great, and just because there's a lead paint ban and a disclosure law doesn't mean it doesn't exist and won't be a problem during a remodel.

Then there's the foundation issues many have and the need for new roofing, mechanical systems, and they pretty much ALL need new kitchens. We even saw one in the Deerfield school district (LOVELY neighborhood, don't ya know) that was $249,900 ~ the cooktop was cracked and in my opinion unsafe, the cabinets were from the '60's, they had painted over wallpaper in most of the downstairs and most of the windows needed to be replaced.

Oh, and the animal smells in 90% of the homes for sale in this town will never be gotten rid of simply by replacing carpet. yuck.

Then there's all the homes in west Lawrence built in the last decade for sale at $300K or above~ all on the same streets. All the same, all huge, all overpriced ticky tacky homes that will fall down in ten years waiting to go into foreclosure. Buy it for the listed price, and you'll be underwater next year.

I could go on and on, but I simply choose to not pay the premium required to live in a craphole in Lawrence. I guess I don't consider Lawrence to have the "charm" needed to make that sacrifice.

It's a personal choice, we all make them.

mom_of_three 5 years, 7 months ago

no, karmax, I think you ASSume to know more than you do.

and yes, you are still picky, because i know there are great homes in neighborhoods in lawrence that fit your criteria.
(and you can buy a new stove)

jafs 5 years, 7 months ago

none,

Yes, but the descriptions of the houses she looked at seem extremely poor for that kind of money.

I can't believe one can't find a decent house in decent shape in a decent neighborhood for $300K.

Chris Ogle 5 years, 7 months ago

You guys quit picking on Karmak.... Hell, she may be my neighbor someday.

By the way, Karmak.....you don't expect my dog to poop in its own yard, do you??

Oh well....I better stop now, while the goin is good.

karmaxs3 5 years, 7 months ago

Like we (you and me) said...I just don't want to badly enough to live here and pay more to work harder and get paid less. You are absolutely correct. I don't want to. I don't want to spend the time and money to live in a mediocre home in a town with a horrible development plan/standard and have to deal with what it would take of my time away from my children and other things I'd like to do in order to make it what I deem to be liveable.

I'm a picky snooty tooty who is too good to live here......I'll say it, and it'll be fine if you do too. :) Oh wait, you already did. So dis me all you like~as I said, it's a personal choice. You all make yours everyday, and so do the planners who keep building multi-family "affordable" housing. The new starter home in Lawrence is a duplex on a slab. Welcome to the American Dream.

And we did find a fab home in a great neighborhood that we love. It isn't in Lawrence, and I'm way okay with that. I've never settled for anything, certainly won't start now. I sincerely doubt we're the only home buyers with a larger than starter budget leaving town to purchase.

CoAd0507 5 years, 7 months ago

When my husband and I were looking for a home we too found ourselves searching outside of Lawrence for a better deal. We found a great deal in Baldwin and the town is wonderful, schools great... and we would have paid so much more to get less in Lawrence. We got a basement when we would have had to get a slab. We got 4 bedrooms and 3 baths when we would have had to subtract 1 from both in Lawrence. We got a 3 car garage when we would have got 2. And there is more sq ft for the price. Other areas outside and near Lawrence had the same price benefit but the schools here had a better reputation. Although, I have not researched that lately. Basically, I could have made a home in Lawrence but I found my dream home in Baldwin and my drive to work is only 20 minutes. I can remember longer commutes trying to make it from one side of Lawrence to the other when I lived there. I do encourage home shoppers to go to hometownlawrence.com and to select areas that they may not have been willing to consider before.

Richard Heckler 5 years, 7 months ago

Lawrence property values are dropping = low personal property tax intake = increased user fees and taxes in the near future. Why? Because of "boom town economics" overloading our city with more new infrastructure than Lawrence can afford. Yet all we hear from commissioners is how many more miles of new debt they plan in the name of "Lawrence must plan ahead therefore taxpayers must assume risk" which is irresponsible economics.

Lawrence needs jobs due to a long poor job market history but not at any price. Tax incentives are not necessary and being a small town certainly do not have the tax dollars to give away. Not only that Lawrence does not monitor as to whether or not this type of attraction ever pays back the Lawrence taxpayers.

Beware of tax abatements and tax increment financing:

"But here’s what happens. And this is a good example of where the news media hasn’t done a good job. I have tons of news clips that say, oh, this new shopping mall is coming or a new Wal-Mart or a new Cabela’s store, and thanks to tax increment financing, this store is going to be built. Well, what is tax increment financing? I’ll tell you what it is. You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church.

Now, there are two ways that it’s important to think about this. One is, that means your kid’s schools, your police department, your library, your parks are not getting that money. And you’ll notice we keep saying we’re starved for money. We’re twice as wealthy as we were in 1980, but we’ve got to close hospitals, and we’ve got to close schools, and we don’t have money for all sorts of things like after-school programs, even though we’re twice as wealthy. The second thing to think about is, imagine that you own Amy Goodman’s or Juan’s department store across the street. You suddenly have to compete with people whom the government is giving a huge leg up on. You think you would go broke after a while? Well, in fact, you will. "

DAVID CAY JOHNSTON

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