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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

shotgun 1 year, 5 months ago

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

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Currahee 1 year, 5 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.

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irvan moore 1 year, 5 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

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oneeye_wilbur 1 year, 5 months ago

I can assure you that in one state I know of, the appraiser's office projected the valuations two years out and the values for taxation have been lowered. Better yet, the county in this particular state has what is called Senior Reduction Value (?). If one qualifies, then the valuation is fixed. Now taxes might go up because of a mill levy increase (but that is a hard sell to the public). So this year some seniors are "freezing" their valuations as they are over 1/2 of what they were several years ago.

Now that is fairness. In this particular city I know of, the Public Library decided to NOT add more computers in the library but reduce the amount of time one could use at a computer, thus creating more turnover.

What an genius idea to help save taxpayer money. Lawrence won't do it, but instead spends more and just wait till after the first of year when we are told, that our valuations are increasing only 1 or two percent. Makes you want to go out and buy a warm drink and feel good! So benevolent they are at the Court House. If a house in your neighborhood or on your block sells for less than the current valuation, then yours should be adjusted downward. It isn't, Mr. Dettbarn at the court house told me that the "neighborhood" area is enlarged to be able to consider all sales. That translates to: We are going to eventually compare your house to a sale in Johnnson County and if that isn't good enough, we will go to the next state and the next.and the next.

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oneeye_wilbur 1 year, 5 months ago

The house I spoke of earlier was not bought by an investor but rather to be owner occupied but only because the sellers cleaned up and it sold as a "new" house. One reason is that the lenders want the places in good shape. If sold way below the asking price, then the investor buyer probably has a lot of cash to purchase it without much of a loan

The only way to make the appraiser's office "hones" is for the newspaper to take the office to task. Quit writing these pumped articles about the hot sales markets.

show some real stats! That would get the neighbors excited you know what I mean!

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Greg Thompson 1 year, 5 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.

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Steve Jacob 1 year, 5 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.

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pills4profit 1 year, 5 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.

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sierraclub 1 year, 5 months ago

But, who is buying these under priced homes? INVESTORS!!

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oneeye_wilbur 1 year, 5 months ago

Blow appraisal is what the houses are selling for. How hot is the market west of Wakarusa. Those newer homes are not moving that fast.

This article sounds like a way for the county appraiser to jump up the valuations in the mailing right after the first of the year AND it gives the school board an excuse to claim they are not raising any taxes. What they won't tell you is that the County Appraiser is doing it for them.

If all valuations stay the same in the next go around then the Appraiser's office is being honest. I know of a house that sold in 60 days in Prairie Park but it sold for less than the county's valuation and the owners spent over $20,000 to make it marketable or if someone would have even bought it not fixed up, it would have sold for $30,000 under the countys' value.

I do not understand why Chad cannot get some accurate numbers for sales and really report the accuracy of sales in all parts of town. This article when it refers to the local Board of Realtors is "suspect".

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verity 1 year, 5 months ago

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

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patkindle 1 year, 5 months ago

and ku has the best college football team in lawrence ks

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