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Lawrence home sales slide in June; local aviation company strikes deal with Chinese firm
June is often a month where you find yourself looking for a new home. Maybe it is a change in jobs. You’re taking advantage of the kids being out of school. The disaster recovery company wasn’t able to clean up your Memorial Day party after all. There are lots of reasons, but none of them panned out to produce strong home sales numbers in Lawrence.
According to the latest report from the Lawrence Board of Realtors, home sales in June fell by 8 percent compared with June 2016. Real estate agents sold 162 homes during the month. The decline was one of the larger ones of the year. The poor month gave back many of the gains that the market had garnered earlier in the year. But not quite all of them. This report represents the halfway mark for the year. Year to date, home sales in Lawrence are up 2.7 percent compared with the same period a year ago.
Realtors are kind of like a broken record on this point, but they continue to insist the reason for the slowdown is a lack of available homes, especially those priced at $250,000 and below. That seems to be the case in many markets. Lawrence actually is weathering it better than some. In neighboring Johnson County, home sales for the year are down by 2 percent.
The one thing that is up in both Johnson County and Douglas County is home prices. The median sale price for a home in Lawrence is about $184,000, which is an increase of about 5.5 percent compared with the same period a year ago. For comparison purposes, median home prices are up 8.4 percent in Johnson County.
Normally, such large increases in home prices would lead to a surge in home building. That hasn’t happened yet. Home-building numbers in Lawrence are up, but they haven’t skyrocketed. The Kansas City area report I read indicated the same was true there. But that report also stated confidence levels of builders seemed to be rising, so perhaps it will be a busy fall for homebuilders.
However, there is still an issue in Lawrence. As noted earlier, the market’s biggest need for new homes is in the $250,000 and under category. It does appear that Lawrence homebuilders are trying to build a different type of home to meet that lower price point, but they still haven’t been able to get the average price close to that $250,000 mark. The median selling price of a new home is about $296,000, which is down from about $310,000 a year ago.
The other issue I hear that is holding Lawrence homebuilders back is a lack of available construction crews. The last downturn in the housing market put many subcontractors — think framing crews, drywall crews, painters, etc. — out of business. The smaller supply of subcontractors means it is taking longer to complete a house.
Other numbers from the report include:
• The median number of days that a home sits on the market before selling is down to 11. That’s the average for 2017 thus far. If you look at only the homes that sold in June, the pace was even quicker. Homes that sold in June sat on the market for only six days, on average.
• The number of newly constructed homes that have sold thus far in 2017 is 62. That’s an increase of about 26 percent, compared with the same period a year ago.
• Active listings on the market in June numbered 279 homes. That was down about 1.4 percent compared with June 2016 totals. There are some signs, however, that the trend may be changing a bit. The number of new listings added to the market in June was 187 homes. That’s an increase of about 20 percent compared with June 2016. In other words, quite a few more people in June 2017 decided to put their homes on the market than was the case in June 2016.
• Despite the poor June, don’t feel too bad for local real estate agents. Because of the rising home prices, the industry is still doing pretty well. Year to date, the dollar value of homes sold in Lawrence is about $140 million. That’s up about 6.4 percent compared with the same period a year ago.
In other news and notes from around town:
• Economic development officials are touting a new deal that involves a Chinese manufacturer of propellers relocating to Lawrence. I’m still working to get some additional details on what the deal means to Lawrence in terms of jobs and whether the company plans to open a manufacturing plant in the city or such.
The Economic Development Corporation of Lawrence and Douglas County has announced that Lawrence-based DARcorporation has agreed to a joint venture with Sterna Composite Aircraft Inc. Sterna currently operates out of China, but the new entity will be based in Lawrence, according to the EDC.
Sterna makes carbon fiber propellers for the ultralight, light sport aircraft and airboat markets. It sounds like the company has been around for just under 20 years. DARcorporation is an aeronautical engineering and software firm that has been in Lawrence for several decades. From its west Lawrence offices, it has worked on a variety of business jet, aircraft and military projects.
“This agreement represents each organization’s strong commitment to provide customers with a single source for the best in composite propellers and airframes,” Willem Anemaat, president of DARcorporation said in a statement. “This joint venture expands the DARcorporation services into a total product solution, from design, to prototyping, to testing to production.”
It sounds like the deal does expand DARcorporation’s capacity quite a bit, but the statement doesn’t address any impact on Lawrence jobs or whether some of Sterna’s manufacturing will move here. I’ve got a call into Anemaat to find out more.