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Archive for Friday, October 19, 2012

Lawrence real estate market called one of hottest in the state

October 19, 2012

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Lawrence is rebounding strongly from a “double-dip hangover” that left the city’s real estate industry languishing longer than most other Kansas communities, according to a Wichita State economist.

Stanley Longhofer, director of Wichita State’s Center for Real Estate, told members of the Lawrence Board of Realtors on Friday that he now sees Lawrence as one of the hottest real estate markets in the state, after it appears to have put a rough 2011 behind it.

“You certainly didn’t have the type of numbers you would like to see in 2011,” Longhofer told Realtors. “And that was different than the rest of the state. For some reason, Lawrence had a double-dip hangover, but since the end of last year there has been very strong growth.”

The Lawrence Board of Realtors released it numbers for home sales through September, and the city is on pace to see 2012 totals top 2011 sales by 25 percent. Home sales through the first nine months of the year totaled 723, up from 577 a year ago.

Longhofer said he is forecasting Lawrence in 2013 to post sales growth of 15.8 percent, the strongest growth of any of the state’s metro markets.

Local Realtors said they have seen signs of a turnaround.

“We have seen an absolute improvement in terms of numbers and value,” said Doug Stephens, broker at Stephens Real Estate. “I think there is more optimism in the housing market than there has been in awhile.”

Lawrence may be benefiting from a recovery that has started to take hold in Kansas City. Longhofer said the Kansas City market seemed to have “found its footing in 2012.” Home sales are projected to grow by 18 percent in 2012, or by an estimated 1,500 sales.

But Lawrence isn’t entirely out of the woods. Longhofer said Lawrence could face downward pressure from the west, depending on what Topeka’s market does as the capital city adjusts to possible state budget cuts. Longhofer is projecting Topeka home sales to only grow by 0.7 percent in 2013.

“If there is one market where I would say I’m still concerned about the underlying fundamentals, it would be Topeka,” Longhofer said. “That could have a spillover effect for Lawrence.”

The inventory of homes for sale in Lawrence also remains higher than the national average, Longhofer said. He estimates Lawrence has about an eight month supply of houses on the market, compared with the national average of six months. The higher-than-average inventory gives buyers an advantage in the market, but Longhofer said inventories are coming down quickly in Lawrence.

In fact, Longhofer believes home prices in Lawrence will end 2012 about 0.2 percent higher than they were a year earlier. That would mark an end of four straight years of value declines, based on the formula Longhofer uses. For 2013, Longhofer is estimating values will increase by 2.1 percent.

“I would say Lawrence’s market isn’t at full steam ahead yet, but it is picking up steam,” Longhofer said. “Compared to where we have been, that’s a good place to be.”

Comments

patkindle 2 years, 2 months ago

and ku has the best college football team in lawrence ks

verity 2 years, 2 months ago

Is it just me or does the "Below Appraisal" sign seem appropriate for this article?

verity 2 years, 2 months ago

Oops, I meant inappropriate. Posting on a screen keyboard has it's disadvantages.

pills4profit 2 years, 2 months ago

Investors exactly, I just bought a house for myself but I'm sure home owners are not where most of the purchases are coming from in the 100k-175k price range.

I just picked up a house for 105K that had been on the market for 130K. Not sure why they sold it but I assume they weren't getting very much action and hopped on the first offer they got.

The dumb thing is the county appraises the property for 140K.

So my question is this, is my house worth 140K or 105K? And how do I go about getting it reappraised by the county so it is closer to my purchase price. Cause the difference in the two prices is laughable.

verity 2 years, 2 months ago

I think the saying goes that something is worth what somebody is willing to pay for it.

Obviously, in your case, that is 105K.

If you protest the appraisal, let us know how it turns out.

Steve Jacob 2 years, 2 months ago

Appeal. Appeal. Appeal!!! I have never thought Douglas County dropped values enough the past five years. We did an it dropped like 15%.

headdoctor 2 years, 2 months ago

Good luck getting the appraisal changed. In recent years they haven't been to friendly at changing the valuation just because you paid a lot less for it. If they get stubborn about it you will end up in the long run paying about as much or more fighting them as the taxes on the higher amount. If you do get it lowered, once the Appraiser can touch the property again the valuation will come back with a vengeance.

chootspa 2 years, 2 months ago

Appeal the appraisal. It's pretty easy to do when you've just purchased it.

Matthew Herbert 2 years, 2 months ago

Good luck. As an individual who has bought many properties by way of the "fire sale" I can tell you that getting an appraisal to match your purchase price simply won't happen. If you appeal, they'll lower it a few thousand to appease you, but seldom more than that.

Steve Jacob 2 years, 2 months ago

I heard the phrase (about the US economy) the we are the best horse at the glue factory, I think the same can be said about Lawrence and Kansas. I was bullish on the economy, but something happened as of late, Lawrence for the first time all year in September went backward of sales tax collections, and many stocks (Google, McD, Apple, Sony, Chipolte) misses projections this week. I think the double dip recession that was predicted to start the year might be coming true.

Greg Thompson 2 years, 2 months ago

The federal government tracks same home sales, it's a better way to understand how home prices are changing over time. I have a tool that allows you to graph the change in prices over time and compare them from city to city. According to the FHFA (Federal Housing and Finance Administration) HPI (Housing Price Index) data home prices in Lawrence have been slightly down to flat over the last couple of years. What's significant is that mortgage interest rates have declined significantly over that same period of time. What this means is that homes purchased with some sort of financing are significantly cheaper to own, in many cases this could be as much as a 50% savings over the term of a 30 year loan. You can view the Home Price Graph application online here:

http://homepricegraph.com/?C1=Lawrence%252C%2BKS&price=%24100%2C000&YS=2007&YE=2012&C2=Los%2BAngeles-Long%2BBeach-Glendale%252C%2BCA%2B%2B%2528MSAD%2529

I'v also produced a nice mortgage table calculator, that allows visitors to compare over 200 different loans in one small table. It's great for home buyers who are considering how much to put down on a home, how interest rates might change their monthly payments and how much they can spend on a home and keep their monthly payments inline with their budget. This tool can be found here:

http://www.searchlawrence.com/mortgage_calculator/

I hope the community finds these tools educational and useful in understanding the housing market here in Lawrence.

Catalano 2 years, 2 months ago

I wish you could create an application that could make the sales prices public. What a stupid state law we have that won't allow that.

irvan moore 2 years, 2 months ago

we had 2 houses within a block of us sell in the last year and a half at way below appraised value, one family lost 30k from their purchase price a couple of years before and the other family lost over 40k on their house. both familys had to sell and were not in a position to wait but it should have lowered our house valuation because i'm sure anyone wanting to purchase a house in our neighborhood will be shown those comps when they go to get a loan. we've been had here folks, development is not paying for itself and the homeowners are left holding the bag

Currahee 2 years, 2 months ago

Why? The only reason why I would want to live here is if I worked for KU or worked in Topeka. I'd rather live in Johnson County if my work is there.

shotgun 2 years, 2 months ago

Why wouldn't it be, is there actually another community in Kansas that is habitable?

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