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Archive for Friday, July 29, 2011

Town Talk: Home sales down nearly 25 percent for year; Subway to start work in North Lawrence; as heat rises so do problems at Kaw Water plant

July 29, 2011

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News and notes from around town:

• For those who say the federal stimulus didn’t do anything to stimulate the economy, try telling that to members of the local real estate community. Yesterday, I reported on building totals for the first half of 2011. Today, I have numbers on home sales through June of this year. In real estate lingo, they need a bit of TLC, or perhaps we can call them a fixer-upper.

Home sales in June were down nearly 33 percent compared to June 2010, according to numbers from the Lawrence Board of Realtors. Realtors sold 149 properties in June, down from 222 during June 2010. That continues a trend we’ve seen for several months now. For the entire year, sales are off about 25 percent. Realtors have sold 551 homes, down from 742 a year ago. The category that is particularly taking a beating are sales of newly constructed homes. They are off almost 60 percent. A total of 34 newly constructed homes have been sold in the first half of 2011. That number is an important one to keep an eye on because it will lead the way to a rebound in the local construction industry, which traditionally has been an important part of the city’s economy. At this rate, no one is polishing up their hammer to build new homes.

But leaders do note that the picture looks better if you compare the numbers to 2009. Last year, federal tax credits for homebuyers were in place, and that spurred a surge of buying. In other words, we were stimulated, but that condition did not last.

If you compare 2011 first-half totals to 2009 first-half totals, the number of sales are down by about 5 percent. That, of course, sounds better than a 25 percent drop. The problem is that 2009 sales were considered terrible by historic standards for Lawrence. And now we’re below those numbers.

One thing that hasn’t gone down, though, are prices. Despite all indicators saying prices should be dropping, the average selling price is up about 2.4 percent from a year ago. The average selling price now stands at $182,058. (For you math geeks, the median is $161,000.)

Now, comparing average prices from one year to the next is not an exact science because different types of houses sell each year. Maybe starter homes aren’t selling anymore. Maybe larger homes make up a bigger percentage of the market. I don’t know, but I’m going to start asking around because at first glance the numbers are confounding. For example, the average days on market for a house is now at 100. That’s up from 81 last year. That should put downward pressure on home prices. Plus, it looks like there are a ton more houses on the market. In June 2011, there were 1,030 homes on the market. That’s up from 891 in June 2010. But perhaps here is a clue to our price mystery. In June, the average listing price of those 1,030 homes was about $225,000. I’ll go all Magnum, P.I. on this, and let you know what I find. Dear, iron the Hawaiian floral print.

• I don’t want this to turn into a Dunkin’ Donut situation where I keep reporting something is going to happen and then it doesn’t. (Although, Dunkin is happening. Concrete and framing work is underway at Dunkin’s new site at the northwest corner of Sixth and Michigan streets.) Back in February, I told you that North Lawrence was set to get a Subway sandwich shop. Plans called for a Subway to be located in the center with Presto convenience store at 1030 N. Third Street. Then, nothing happened. But now workers are telling customers of the store that construction on a Subway shop is expected to begin on Monday.

We reported several weeks ago that the city’s Kaw Water Treatment Plant was having problems, and actually had to be shut down temporarily because it was unable to adequately draw water from the Kansas River. Well, the plant is still having problems. In fact, it seems like it is crankier than my wife on a Monday morning. The plant has been shut down at least one other time since then, and now some key pieces of treatment equipment have broken.

City crews are now working to do at least $200,000 worth of emergency repairs to keep the plant operational. One problem is that one of the plant’s two water intakes on the Kansas River is completely inoperable. The city’s 2012 budget plans to repair that at a cost of more than $7 million. But the more pressing problem is that the one remaining water intake isn’t working very well currently. Staff believes it is getting clogged with sand due to low water conditions in the Kaw. When it becomes clogged, the plant basically shuts down until crews can get it unclogged. Lawrence has a second water treatment plant — the Clinton Water Treatment Plant off Wakarusa Drive. It can produce a lot of water, and can serve the entire city under normal circumstances. But in case you hadn’t noticed, we’re in the dog days of summer currently. Some folks who don’t know when to give up are still watering their lawns. If the Kaw plant has to shut down while people are still pouring the water on grass, that could put the Clinton plant to the test. Maybe we all ought to hope for rain, or come to the conclusion that brown is a beautiful color for grass after all.

Comments

Keith Richards 2 years, 8 months ago

Can the ljworld control the spam that merrill routinely posts. It gets old quick!

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Richard Heckler 2 years, 8 months ago

America Is Over Stored ( Do Lawrence,Kansas planners,Chamber of Commerce and city government not realize this?)

The Wall Street bankers boom town economics building frenzy produced a bumper crop of new retail space. But the occupants haven't materialized.

The carnage in retail hasn't been this bad since an anarchist bombed Chicago's Haymarket Square in 1886. In January, Liz Claiborne said it would shutter 54 Sigrid Olsen stores by mid-2008; Ann Taylor announced that 117 of its 921 stores would be closed over the next three years, and Talbots axed the Talbots Men's and Talbots Kids concepts and 22 Talbots stores. Even Starbucks has scaled back its yearlong saturation-bombing campaign.

But back out inflation and sales of gasoline, and retail sales fell in real terms in the past year. Clearly, demand is down.

And supply is up. This decade's building frenzy produced a bumper crop of new retail space—from McStrip malls built near new McMansions, to hip new boutiques in the ground floors of hip new Miami condo buildings. But as is the case with those McMansions and condos, the occupants for new retail space haven't materialized.

In the fourth quarter of 2007, the national retail-vacancy rate rose for the 11th straight quarter to 7.5 percent—the highest level since 1996, according to research firm Reis, Inc.

With new projects coming online—34 million square feet of retail space will be completed in 2008—the rate is expected to spike further to 8 percent. In the parlance of the trade, many chains are simply over-stored.

Con't http://www.newsweek.com/id/112762

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Richard Heckler 2 years, 8 months ago

Lawrence is losing population and it is a low wage community. How can low wages stimulate economic growth?

Why does city hall spend money on new infrastructure as if the Bush/Cheney fiasco never happened?

Meanwhile:

July 24, 2009

To the editor:

The July 14 editorial asks, “What’s downtown going to look like five, 10 or 15 years from now?” The answer can be known, and the picture is not pretty.

Lawrence has enough spending to support about 4.1 million square feet of retail space, but the City Commission permitted developers to expand the supply to over 5.5 million square feet.

Lawrence has too much retail space chasing too few vendors, which means that many stores go empty, especially in the older shopping centers like downtown.

The surplus development has stalled redevelopment plans downtown and has pushed the vacancy rates so high that disinvestment and blight now threaten. Investment, both public and private, is wasted. The taxpayers’ $8 million parking garage stands largely empty. The Hobbs-Taylor building and the 600 block of Massachusetts should be the top performing spaces in the community, but they have significant vacancies.

The recession has contributed to the problem, but had we properly managed our growth we would be much better off.

The developers’ short-term gain is now our long-term loss. Managed growth would have prevented much of the problem and would have protected and enhanced our downtown.

It will take many, many years to absorb this surplus space and, until this happens, it will be hard for downtown to compete. We can only look forward to many years of high vacancy and disinvestment. We need a City Commission that knows how to pace the growth of supply so as to protect our unique downtown.

McClure is from Lawrence

http://www2.ljworld.com/news/2009/jul/24/retail-space/?letters_to_editor

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Richard Heckler 2 years, 8 months ago

Lawrence is losing population and it is a low wage community. How can low wages stimulate economic growth?

Why does city hall spend money on new infrastructure as if the Bush/Cheney fiasco never happened?

Meanwhile:

July 24, 2009

To the editor:

The July 14 editorial asks, “What’s downtown going to look like five, 10 or 15 years from now?” The answer can be known, and the picture is not pretty.

Lawrence has enough spending to support about 4.1 million square feet of retail space, but the City Commission permitted developers to expand the supply to over 5.5 million square feet.

Lawrence has too much retail space chasing too few vendors, which means that many stores go empty, especially in the older shopping centers like downtown.

The surplus development has stalled redevelopment plans downtown and has pushed the vacancy rates so high that disinvestment and blight now threaten. Investment, both public and private, is wasted. The taxpayers’ $8 million parking garage stands largely empty. The Hobbs-Taylor building and the 600 block of Massachusetts should be the top performing spaces in the community, but they have significant vacancies.

The recession has contributed to the problem, but had we properly managed our growth we would be much better off.

The developers’ short-term gain is now our long-term loss. Managed growth would have prevented much of the problem and would have protected and enhanced our downtown.

It will take many, many years to absorb this surplus space and, until this happens, it will be hard for downtown to compete. We can only look forward to many years of high vacancy and disinvestment. We need a City Commission that knows how to pace the growth of supply so as to protect our unique downtown.

McClure is from Lawrence

http://www2.ljworld.com/news/2009/jul/24/retail-space/?letters_to_editor

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lsense 2 years, 8 months ago

"Some folks who don’t know when to give up are still watering their lawns. If the Kaw plant has to shut down while people are still pouring the water on grass, that could put the Clinton plant to the test. Maybe we all ought to hope for rain, or come to the conclusion that brown is a beautiful color for grass after all."

I'll water my lawn until watering restrictions are put into place. I'm paying for that water, which helps keep these water treatment plants running, in case you didn't know. Also, all of that water that I'm paying to put on my grass is not going down the drains, yet my sewage bill is not reduced. So yes, I'll continue to water my lawn as I'm doing now.

One thing to note: a lot of people don't understand how to water in the heat of Summer. They water every day, multiple times of day (like my neighbor who waters 4 times a day, every day - I am serious), which isn't helping the grass any. It's actually causing the roots to grow back towards the surface, which dries out quickly. Watering deep and infrequently is the way to go. You want the roots tapping as much water deep in the ground as you can. This way, you don't have to water as much to maintain a nice lawn, even in the heat.

Also, it's up to the city, not you Chad, to impose a watering restriction. If they feel that people watering their lawns are going to cause undue stress on the plant, then they'll impose the ban.

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nomorebush 2 years, 8 months ago

It should say subway is reopening. It was there 2000-2006 or longer.

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jesse499 2 years, 8 months ago

Maybe it has something to do with holding back water upstream so they can sart the electric plant by the bridge.

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Casey_Jones 2 years, 8 months ago

"In fact, it seems like it is crankier than my wife on a Monday morning."

lol

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justfornow 2 years, 8 months ago

Yo Chad, The Kaw Water Treatment Plant has only one working intake on the Kansas river and it's been that way for years......that's the problem.

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dogsandcats 2 years, 8 months ago

Aww I thought you meant a real subway, you know, like a train.

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kshiker 2 years, 8 months ago

I am predicting a Merrill comment about how the city is overbuilt and the building/real estate industry is corrupt in 5 ... 4 ... 3 ... 2 ... 1 ... Better yet, please just spare us the same old nonsense.

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Keith Richards 2 years, 8 months ago

I water my lawn occasionally but it isn't because I want my grass green. It has more to do with the contraction of our 'clay' soil when it is so dry. Contraction and then rapid expansion during very wet periods puts lots of pressure both in and out on your foundation and can lead to 10's of thousands worth of foundation repairs down the line.

Sorry if this irks people but it is worth it to me.

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oneeye_wilbur 2 years, 8 months ago

How well will an expansion of T shirt shop downtown and adding a coffee shop and books make it?

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kernal 2 years, 8 months ago

My sprinkler system hasn't been turned on for a few years. I figure if Mother Nature isn't going to rain enough, then I need to change from a lawn to something more sustainable. Then I won't have to mow! Yes, Snap, it's an electric mower.

Those "some people" won't stop watering lawns until the City tells them to.

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oneeye_wilbur 2 years, 8 months ago

Subway in a gas station? That's nothing new and/or special. Now a free standing building, a new one in North Lawrence with a subway might be special or maybe a north Lawrence branch of Pachamammmmas.

Where was the article about Chester's Fried Chicken not being sold at Checkers anymore?

Chester's is good! ( well, was good!)

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ljwhirled 2 years, 8 months ago

It isn't the buyers, it is the banks.

It is next to impossible to get a mortgage right now and the banks are tightening lending standards even further.

I recently tried to re-fi with a very high credit score, long employment history, 50% equity and 100% on -time performance on past mortgages. No go. Both banks bounced the loan during diligence because they didn't like my income documentation for 2009 (self employed).

I have recently had the same problem on the business side, no banks are lending without huge amounts of collateral or an SBA guarantee.

With the FDIC breathing down their necks they simply aren't lending. I'd love to expand my business right now. I've got some great opportunities, but I am going to sit tight for the next couple of years.

I might spend the time improving our software systems. If I do it right I can eliminate another job and save some money.

Way to go bankers and FDIC.

  1. Help cause mortgage crisis by sleeping at the switch.
  2. Overreact after the crisis and prolong the recession.
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