Lawrence home market remains on hot pace, may cool some in 2014, report predicts
By one measure, Lawrence’s residential real estate market is the hottest in the state, according to a new report from Wichita State’s Center for Real Estate.
Lawrence is on pace to see total home sales increase 16 percent in 2013, topping the other four major real estate markets that WSU studies in the state.
“Sales are very, very strong right now in Lawrence,” Stanley Longhofer, director of the WSU center told a gathering of the Lawrence Board of Realtors on Thursday.
In fact, 2013 sales totals may be so strong that the real estate industry shouldn’t expect the hot pace to continue in 2014. Longhofer predicts that Lawrence sales totals will continue to grow in 2014, but at a more modest 3 percent rate.
“One of the normal things to see after a strong period like this is a little bit of time where the market catches its breath,” Longhofer said.
Home sales in Lawrence and Douglas County are projected to hit the 1,500 mark in 2013, up 16.2 percent from 2012 totals. That growth rate puts Lawrence ahead of: Wichita, 12.5 percent; Kansas City, 10.4 percent; Topeka, 8 percent; and Manhattan, 3.3 percent.
About 50 Realtors attended Thursday’s presentation, and said that 2013 has been the second year of a strong rebound in Lawrence’s real estate market.
“I think what’s driving it is that people realize It is really an awesome time to buy a house with these low mortgage rates,” Nicholas Lerner, an agent with Lawrence’s McGrew Real Estate said.
Longhofer is predicting that 30-year mortgage rates may rise to as high as 5.25 percent in 2014. But he doesn’t think that will be enough to dissuade many buyers. If anything, he said the higher rates may provide a boost to the starter-home market, which has been sluggish.
“First-time homebuyers have been seeing once-in-a-lifetime mortgage rates, and they really have been stretching their purchases,” Longhofer said. “They have been skipping the starter home and going right to the move-up home.”
Other findings from the WSU report included:
• The number of homes for sale on the Lawrence market has dropped to about a six-month supply. In parts of 2010 and 2011, supplies were at about 14 months.
• The declining inventory of homes on the market is expected to cause home prices to rise by 1.7 percent in 2014.
• Lawrence’s housing market is benefiting from strong job growth in the Kansas City region, but is being hurt by lackluster job growth in Lawrence and Topeka.