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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

ljwhirled 3 years, 5 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.

gatekeeper 3 years, 5 months ago

I recently refinanced with no issues what so ever. Maybe you need to look at the banks you are going to. Local, smaller banks are always best.

ljwhirled 3 years, 5 months ago

Are you self employed? Is a large percentage of your income from Interest?

Yeah, a vanilla mortgage is still going to go through in a reasonable time.

First time homeowners, self employed folks, or anyone with credit below 700 aren't getting financed. This effects the overall market and depresses sales.

The credit market has contracted and it is costing us jobs.

pizzapete 3 years, 5 months ago

Oh no, don't tell me that the chicken and fried catfish are gone?

kernal 3 years, 5 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.

kernal 3 years, 5 months ago

My shrubs are along the foundation and are mulched which helps with the cracking and expansion of the soil.

kshiker 3 years, 5 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.

bornherelongago 3 years, 5 months ago

Lawrence is not over built. it's under employed just like the rest of the country.

dogsandcats 3 years, 5 months ago

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

Casey_Jones 3 years, 5 months ago

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

lol

jesse499 3 years, 5 months ago

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

nomorebush 3 years, 5 months ago

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

So_tired_of_the_whiners 3 years, 5 months ago

Just an FYI. Unless you water your lawn in the months of Dec, Jan and Feb, then you aren't paying an increased sewer bill on summer water usage. The City uses those months to determine your sewer bill for the whole year.

So_tired_of_the_whiners 3 years, 5 months ago

The city has a great website that breaks down your bill every month. https://cis.ci.lawrence.ks.us/Click2GovCX/Index.jsp

I am with you. Chad should water his lawn. He is making the town look bad... :)

Chad Lawhorn 3 years, 5 months ago

Wow, you're giving my wife a run for her money. Cool off and have a better day. Thanks, Chad

Chad Lawhorn 3 years, 5 months ago

No, I don't care about that. I was just trying to make myself feel better about my brown yard. Have a good weekend. Thanks, Chad

George Lippencott 3 years, 5 months ago

II might observe that an outright ban on watering will cost a lot of people a lot of money. It is not only the potential for foundation problems (perhaps a bit overstated) - it is also the cost of losing the shrubs around ones home. They do not need a lot of water but they do need some. The grass can go dormant - not all the shrubbery can!!

I view the notion of prices remaining constant with a bit of skepticism. Out here in west Lawrence, I would estimate that upwards of 10% of the properties are on the market or in the process of being converted to rentals. A number of people have had their properties on the market for more than a year (or two). Those whose home values are around the local average should be very happy as that set of properties appears to be moving.

What goes up must come down. In time west Lawrence property values will adjust and property tax revenue will decline accordingly. Then everybody can enjoy the insuring mil rate increase (except for the majority who rent who may escape before the increase gets to them).

George Lippencott 3 years, 5 months ago

KRichards (anonymous) says… 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.

Richard Heckler 3 years, 5 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

George Lippencott 3 years, 5 months ago

merrill, I challenge your argument that we are a low wage community. I believe that there is a lot of income in Lawrence not captured by the government statistics. For example, the 30K or so student population receives, in many cases, revenue from dad or the bank that is not captured in income data but does represent disposable income. I also suspect that the government does not do a good job of capturing income from commuters - many of whom are not low wage. Think about it. Anecdotally, there are an awful lot of expensive vehicles in this "poor" community. Are the welfare recipients driving to SRS in a Cadillac again?

Richard Heckler 3 years, 5 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

Flap Doodle 3 years, 5 months ago

Counting the double post on this thread, how many times have you copy/pasted that same LTE, merrill? 100 times? 200 times?

Richard Heckler 3 years, 5 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

gl0ck0wn3r 3 years, 5 months ago

Hurrah. Like flies to... sugar... Merrill has cut-and-pasted his usual nonsense. He's as regular as Jamie Lee Curtis eating her yogurt.

Flap Doodle 3 years, 5 months ago

They could if they wanted to. The process is called "being disappeareded".

Crazy_Larry 3 years, 5 months ago

Facts aren't spam, and double-posts happen.

Flap Doodle 3 years, 5 months ago

Posting the same sets of links hundreds and hundreds of times on this award-winning website is spamming.

Crazy_Larry 3 years, 5 months ago

Negative, Ghost rider.

Spam usually involves advertising, not facts. Repeatedly posting the same set of facts in different comment threads is not spamming, unless the post is not relevant to the story or discussion. However, repeatedly posting the same set of facts over and over again, in the same comment thread, is spamming.

In short, just because someone posts facts that you don't like the general public to know does not make it 'spam.'

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