Lawrence housing market posts increase for 2016, home prices rise; question about whether homeowners will see higher property tax values

The final numbers for 2016 are in, and real estate agents sold 1,210 Lawrence homes. From the podium, though, it looked like at least a million to a million and a half. (Sorry, I couldn’t resist.) Either way, it was enough for Lawrence to post its fourth consecutive year of growth in home sales.

The new report from the Lawrence Board of Realtors shows home sale totals grew by 2.2 percent compared with 2015 marks. That’s not a record-setter by any means, but there were times in 2016 that it was questionable whether the market was going to grow at all. So, real estate agents are likely happy with the end result.

Here’s a look at how this year’s home sale totals compare with previous years:

• 2016: 1,210, up 2.2 percent

• 2015: 1,184, up 11.4 percent

• 2014: 1,063, up 0.2 percent

• 2013: 1,061, up 17.2 percent

Some of the more interesting numbers in this report are on the pricing front. The end-of-year numbers show the median selling price of a home in Lawrence was $178,000. That was an increase of 5.3 percent from the 2015 median of $169,000. Here’s a look at some recent history on median selling prices in Lawrence.

• 2016: $178,000, up 5.3 percent

• 2015: $169,000, up 1.2 percent

• 2014: $167,000, down 1.8 percent

• 2013: $170,000, up 6.6 percent.

A couple of things you may notice about those numbers are that the housing market did seem to break through a bit of a ceiling in 2016. The market hit a recent high in 2013 with a median selling price of $170,000. Then it dropped in 2014, and home prices weren’t able to increase enough in 2015 to get the median equal to or above the old high. The market gained back all of its losses plus some in 2016. The other notable trend is that Lawrence now has had two consecutive years of increases in selling prices. It will be interesting to watch whether that trend starts showing up in the tax values that the county appraiser assigns to each home. Those tax values are supposed to be based on the fair market value of homes, and while homeowners may not want to see their tax values increase, local governments are likely eager to get the additional tax revenues that higher values would produce

The rising price of housing, though, was most evident in the new construction market. The median selling price of a newly constructed home rose to $324,900 in 2016, an increase of 6 percent from 2015 values. Since 2013, the median price of a newly constructed home has risen by 8 percent, while the median price of existing housing stock has grown by 4.7 percent. The figures illustrate some of the difficulties the city may face if it has an affordable housing strategy that is heavily reliant on new construction. The numbers also show the new construction market struggles to build smaller, more entry-level homes. The difference in price between an average existing home and the average newly constructed home is nearly $150,000. Obviously, the new stuff that is getting built is a lot bigger, and perhaps fancier, than the older housing stock.

But despite the rising prices, sales of newly constructed homes posted their best totals in a long time. Real estate agents sold 99 new homes in 2016, a 22 percent increase from 2015.

Here is a look at a few other statistics from the end-of-year report:

• The median number of days an existing house sat on the market before it sold was 16. That’s the shortest time period in recent memory. In 2013, existing homes were on the market for 40 days on average. The number has been falling ever since. The statistic shows the market becoming more and more of a sellers market.

• There are mixed signals on the new construction front. While more newly constructed homes sold in Lawrence than in past years, they took longer to sell. The median number of days a newly constructed home sat on the market before selling was 94. That’s up significantly from the 76 days in 2015. As local homebuilders decide how many houses to build in 2017, they may be trying to figure out what statistic to put their faith in: an increasing number of sales or a slowdown in how long it is taking to sell a home.

• The year ended with 180 homes actively on the market. That too is a recent low. At the end of 2015 there were 240 homes on the market. At the end of 2013 there were 303. The shrinking number of homes on the market is a main factor driving up prices in the market, local real estate agents tell me. Unless something changes in the market — and who knows, facts and “alternative facts” could produce a shift — the low inventory of homes for sale makes it likely that Lawrence may see a third year of price increases in the real estate market.

In other news and notes from around town:

• If you are wondering whether the Douglas County Appraiser is going to attach a higher tax value to your home, you’ll have to keep wondering a bit longer. The county will send out its change of value notices on March 1. But the appraiser’s staff currently is going through the process of assigning a tax value to the approximately 40,000 real estate parcels that exist in the county.

County Appraiser Steve Miles put out a report recently updating the process, but he didn’t provide any firm guidance on what homeowners should expect. But it sure sounds like some sort of increase in tax values is in play.

“When the entire year is analyzed, there has been upward movement in the overall market value of existing real property over that period,” Miles wrote in the report. “As staff proceeds with the process of establishing the valuations for Douglas County properties, we are seeing an upward trend in total valuations on average.”

But Miles did not offer guidance on how large of an increase in values his staff is seeing. In a separate part of the report, Miles notes that through November, the average sale price for residential property throughout Douglas County was $214,895, which was up about 1 percent from the 2015 average. These numbers look different from the ones above for a couple of reasons: 1. They are for the entire county. 2.The appraiser uses a mean average instead of a median average. (No, I’m not going to explain the difference. You should have paid attention in math class.)

The appraiser’s office is scheduled to wrap up its annual review of values in the next couple of weeks. We”ll check in with the appraiser after that to see if we can get a better idea of what homeowners should expect.