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Lawrence home sales end 2013 up 17 percent from a year ago; county appraiser provides update on property values

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What a difference two years make. Back in 2011 we all were all locked up in our safe rooms, blowing through our emergency batch of chocolate candies and nervously muttering something about the Great Recession and Ben Bernanke. (We weren't entirely sure of Ben Bernanke's role in all this, but his name just mutters so well.)

Now, it appears many of us are locked away in a nice new home. For the second straight year, home sales in Lawrence took a big jump, according to the year-end report from the Lawrence Board of Realtors.

For 2013, home sales totaled 1,061 in Lawrence, up 17 percent from 2012. But what's really remarkable is how much the industry has bounced back from its lows of 2011. Home sales in the city are up a full 50 percent from the days when my wife and I briefly considered switching from Ghirardelli chocolates to Cadbury. (Yikes.)

Another way to look at the sales totals is that $217.6 million worth of homes were sold in Lawrence in 2013. That's up from $172.2 million in 2012 and $140.2 million in 2011. That's $77 million more in real estate sales than occurred in 2011. A 6 percent real estate commission on that will buy a fellow a few months of chocolate.

The question now is whether the industry is primed for a third straight year of sales growth. Susan Bonham, president of the Lawrence Board of Realtors, said the current data suggests "steady growth" for 2014. We'll see how it plays out. But the only slightly negative trend in the 2013 numbers is that sales growth did slow down considerably in the second half of the year.

In the first half of 2013, sales were up 29 percent compared with the same period in 2012. In the second half of 2013, sales growth slowed to 6 percent, compared with the same period a year earlier. An interesting trend, but to complain about it would be like me complaining that my wife left me only one peanut cluster instead of two. In other words, it is still a lot better than it has been.

But it will be important to keep an eye on how the market gets out of the gates in 2014. It is worth noting that the home sale numbers for Lawrence in December were disappointing. They dropped by nearly 20 percent compared with December 2012.

Here's a look at other numbers from the year-end report:

— Sales of newly constructed homes experienced their second straight year of growth as well. But the growth rate slowed down significantly in 2013. There were 94 sales of newly constructed homes in 2013, up 5.6 percent from 2012. In 2012, sales of newly constructed homes grew by 41 percent.

— Unlike in 2012, home prices were on the rise in 2013. The median selling price in Lawrence was $170,000, up 6.6 percent from 2012. That's good news for people who were worried that Lawrence's real estate market was poised for a major price correction. In 2012, the median selling price dropped by 5 percent. If home prices would have dropped a second straight year, that would have set off alarm bells with some.

— The number of homes on the market continues to shrink, which normally puts upward pressure on prices. December ended with 303 homes on the market, down from 369 at the end of December 2012.

— The median number of days a home sits on the market unsold also is down slightly. The average now stands at 47, down from 53. It is down from 63 in 2011.

In other news and notes from around town:

• We'll keep the real estate theme going with some news from the Douglas County Appraiser's office. News of selling prices rising may cause some homeowners to wonder whether the county appraiser will significantly increase the taxable value of their homes.

Well, there are some indications that may not be likely. The Douglas County Appraiser's Office currently is doing its work to set the value of every piece of property in the county. The office is a little more than halfway done with the task. According to a new report, most values are going to stay steady or decline slightly.

The numbers are still subject to change between now and March when they are sent out to homeowners, but here's a look at the breakdown thus far:

— 44 percent of residential properties are projected to have values that are basically unchanged from a year ago;

— 11 percent are projected to have decrease of 1 percent to 3 percent in value from a year ago;

— 30 percent are projected to have an increase of up to 3 percent in value;

— 15 percent are projected to have an increase of more than 3 percent in value.

Comments

Chris Anderson 10 months, 3 weeks ago

The problem with median sales prices is that price trends can be obscured by changes in the composition of houses that are being sold/purchased. In particular, as newer construction with higher cost housing enters the market it makes the median sale price tick up (after all, how many builders are erecting $170,000 houses these days?)

According to the most recent data based on the repeat-sales-method HPI from the Federal Housing Finance Agency (through Q3 2013), Lawrence home prices remain 3.9% below their peak values of Q1 2008, yet up 3.4% from their most recent trough registered as of Q1 2011. In other words, appreciation of existing Lawrence homes over the past eight years has been just about zero. And, without any big increase in population/employment in Lawrence and the seemingly overbuilt rental market there's little reason to expect much in the way of rising home prices in the foreseeable future -- in my opinion.

Richard Heckler 10 months, 3 weeks ago

We can safely bet there are homes in Lawrence that were purchased during the "housing boom town" market period that carry a larger mortgage than current market value will bring.

There are plenty of repossessed homes sitting around waiting for the market to improve which under conventional circumstances would tend too keep market values down overall.

How do county property tax appraisals compare to market values? Should county appraisals ever reflect inflationary market values? I say no that is unfair taxation.

Are market values inflated in Lawrence, Kansas?

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