After showing signs of cooling off in September, Lawrence's residential real estate market heated right back up again in October.
October homes sales in Lawrence rose by 17 percent compared with the same time period of a year ago. Home sales in Lawrence have increased for nine of the 10 months on record in 2013. But the one month that showed a decline was September, which meant real estate observers were waiting to see whether that was the beginning of a new slowdown in the market.
October's numbers suggest the Lawrence market has dodged a late season slump. Now, the question turns to whether the Lawrence market can dodge something even nastier: the impact of the federal government shutdown.
John Esau, the president of the Lawrence Board of Realtors, noted the only negative in this month's report is that the number of new contracts real estate agents wrote during October was down about 12.5 percent compared with the same period a year ago. Esau speculated that was because during October the government shutdown created concerns about lenders being able to timely process loans and also created economic concerns among buyers.
The shutdown happened during the early parts of October, but most of its impacts on real estate sales likely won't show up until the November report. That's because October's report largely shows sales that had contracts written in September, before the shutdown. November's report will have sales that had contracts largely written in October. (There's no set formula, but generally it takes a few weeks for a sale to be finalized on a house.)
So, it will be interesting to see if November's home sale numbers take a hit, but it likely won't be too much to be worried about since the shutdown is now over. Indeed, the Lawrence real estate market for all of 2013 has been pretty worry free. Here's a look at several of the most recent statistics:
• Through October, Lawrence home sales for all of 2013 total 948, up 20.5 percent from a year ago. Compared with 2011, home sales are up nearly 53 percent.
• Sales of newly constructed homes are up about 21 percent compared with a year ago. A total of 86 new homes have been sold, up from 71 at this time in 2012 and 55 in 2011. It is worth noting, however, October 2013 wasn't a good month for new-constructed home sales. Only four sold in Lawrence in October, down from 11 in October 2012.
• The median selling price for a home in Lawrence is $170,000, up 7.3 percent from a year ago. Interestingly, the median selling price is about where it was in 2011, when it checked in at $168,250. Last year's rebound in the market partially was fueled by a significant drop in housing prices. This year's strong market, however, is happening as average home prices increase.
• The median number of days a home sits on the market is down to 42, compared with 61 in 2012 and 59 in 2011.
• The supply of homes available for sale continues to shrink. At the end of October there were 428 active listings, down from 490 in October 2012 and 575 in October 2013. Based on current sales activity, there is about a 5.9 month supply of homes currently on the market. In October 2011, there was about a 13.4 month supply of homes on the market.
According to the latest report from the Lawrence Board of Realtors, the housing market produced a big bang in May. Home sales for the month were up 56 percent — totaling 142 — compared to the same period a year ago. The numbers are up almost 78 percent from two years ago.
The numbers continue a theme of 2013 being a bounce-back year for the local real estate market. Through the first five months of the year, housing sales are up almost 40 percent compared to the same period a year ago. They’re up 55 percent from the same period two years ago.
For the year, real estate agents have sold 403 houses in Lawrence. The even better number for the economy is that agents have sold 41 newly-constructed homes. That’s up 64 percent from a year ago. The report was full of positive numbers. They included:
• The median number of days a home sits on the market before selling is now down to 58 days, compared to 73 a year ago.
• The number of active listings on the market is 394, down from 586 a year ago and 676 two years ago. The number of newly-constructed homes on the market now totals only 24. That’s down from 44 a year ago and 63 two years ago.
• The median selling price of a home thus far for 2013 is $169,000, up 7 percent from the $158,000 mark a year ago.
• Indications are that June was a busy month for sales as well. Agents wrote sales contracts for 147 properties in May, up from 126 in May 2012. Many of those contracts are expected to be converted into sales in the June reporting period.
It will be interesting to see what the next few months hold for the market. Everybody is keeping a close eye on interest rates, which spiked last week but have started to come back down. Real estate agents now are alerting buyers of a potential rise in rates.
“People trying to time the market should be making their move now,” said John Esau, a local Realtor and president of the Lawrence Board of Realtors.
Maybe 13 is a lucky number in this case. Lawrence home sales for the 13th month in a row have posted year-over-year gains, but the more striking fact is the improvement in almost every category real estate observers care about.
According to the new report from the Lawrence Board of Realtors, agents sold 102 Lawrence homes in April, a 45 percent increase over April 2012.
In a departure from past months, even newly constructed homes sold well. Builders sold 13 new homes, compared to just four in April 2012. To put the number in perspective, Lawrence builders had sold only 13 homes in the previous three months of 2013 combined.
The April numbers continue what has been a good start to 2013. For the year, 261 homes have been sold in Lawrence, up about 32 percent from 2012 totals and up 45 percent from same period in 2011. The number of newly built homes sold checks in at 26, up from 17 at this time in 2012 and 18 in 2011.
Sales of newly built homes will be a number to really keep an eye on. New home construction has more potential to boost the Lawrence economy than people simply buying and selling existing homes. That’s obviously because new construction involves employing people to build and houses and develop neighborhoods.
A couple of numbers that builders will keep an eye on are the number of days a house stays on the market before it sells, and the number of homes actively listed. Both numbers showed some bullish signs in the last month.
The median days on market for a home is now at 66, down from 88 in April 2012. The number of homes on the market also has fallen to 419, down nearly 32 percent from the 613 listed in April 2012. The number of newly built homes on the market is at 29, down from 56 in April 2012 and from 63 in April 2011.
As the market has picked up, there are signs that prices have too. The median selling price on homes in 2013 stands at $167,000, up 7.8 percent from the same period in 2012. It is always tough to gauge pricing trends just from this report, but at this time last year, the Lawrence real estate market was showing signs of a real price correction. Last year, at the end of April, the median home price was down about 10.2 percent.
The new numbers certainly have put new bounce in the step of local real estate agents.
“These recent statistics reflect a dramatic shift in our local market,” said John Esau, president of the Lawrence Board of Realtors.
Esau, in fact, went so far as to say he believe the market now has shifted from a buyer’s market to a seller’s market.
We’ll see what May brings: Perhaps lucky 14.
••• There’s another report out that shows Lawrence home builders are slowly starting to ramp up their production. According to a new report from the city, 17 building permits were issued in April for single-family and duplex homes.
That’s the highest April number in at least five years. For all of 2013, the city has issued 59 single-family and duplex permits, which is 20 more than it issued during the same time period in 2012.
Other items from the April report include:
• For the year, the city has issued permits for $54.8 million worth of projects, up 63 percent from the same period a year ago. The $54.8 million is by far the best showing of the last five years. The average since 2009 has been about $27.5 million worth of projects.
• Apartment construction continues to be strong in Lawrence. The city has issued permits for 374 apartment units thus far in 2013. That’s the highest total of the last five years. Since 2009, the average has been about 105 units.
• Apartment construction was a big part of the $19.8 million worth of permits issued in April. Camson South — one of two apartment projects just west of Wal-Mart on Sixth Street — pulled permits for a $5.5 million project that includes 88 apartments and a clubhouse. Other large projects include phase I of the Rock Chalk Park project, including construction of the track and field stadium. Lawrence-based DFC Company pulled $6 million in permits for that project. Discount Tire also pulled a $1 million permit for work on its new store at 4741 Bauer Farm Drive, just west of the new Starbucks in that area. Several of you have asked about the timeline for the new Discount Tire location, and I do have a call into the company. I’ll let you know when I hear more.
The Lawrence real estate community hit a significant milestone in March. It was the 12th straight month that the Lawrence real estate market has posted year-over-year sales gains.
According to the new report from the Lawrence Board of Realtors, there were 76 homes sales in March, up nearly 29 percent from the 59 sales made in March 2012.
Those numbers helped make for a strong first quarter. During the first three months of the year, 159 homes sales were recorded in the city, a 24 percent increase from the same time period a year ago.
It was about this time last year that the real estate market started making an upward climb, but back then the market was being fueled, in part, by sellers lowering their pricing expectations.
Now, the numbers indicate homes prices are on the rise as well. The median sale price on Lawrence homes in the first quarter was $165,000, up about 7 percent from the same period a year ago. Average sale prices should be taken with a grain of salt, because they are pretty dependent on the particular types of home being sold at the time. But still it is a number still worth watching.
Another number showing signs of a rebound is the average number of days a home sits on the market before it sells. The median days on market in March dropped to 68 days, down from 94 during March of 2012.
Several Realtors report the number is dropping because many homes have sold in just a matter of days. That must be the forces of supply and demand kicking in, because the supply of homes for sale on the Lawrence market is now at a two-year low.
The report found the number of active listings in Lawrence fell to 408, down from 578 in March 2012 and from 615 in March 2011.
All in all, local real estate agents seem to be genuinely pleased with the numbers.
“We need more new-construction homes and resale home listings to satisfy the demand,” said John Esau, president of the Lawrence Board of Realtors and an agent with Keller Williams Realty. “It has been a long time since we could say that.”
Now, we’ll wait and see how the rest of the important spring and summer buying season plays out. We'll see whether local agents can expand upon their streak of consecutive months of sales increases. But the report indicated that sales were going well in April. Real estate agents had written contracts for 123 homes sales in April, up from 98 in April 2012.
Let me take care of a quick housekeeping matter here. (My wife’s ears just perked up. She would tell you my idea of housekeeping is making sure I put a chip clip on the bag of Doritos I keep next to my La-Z-Boy.) Town Talk will be off for the next couple of days. It will return on Tuesday.
Feel free to find me on Friday. I’ll be parking cars as part of a Eudora 4-H project at the Lawrence Auto Swap Meet at the Douglas County Fairgrounds. (It runs Friday through Sunday.) Then you can help me find a fender for a ‘66 T-Bird.
You can also try to find me on Monday, if you want. I would look in a dog house. That’s where I 'm usually forced to keep house in the days following the swap meet.
If you are like me and continue to set off crimson and blue confetti bombs in the TV room after every Jayhawk victory, you soon may be looking for a new house. So, how about some news and notes from the Lawrence real estate and building industry?
• The city has February’s building permit report out, and the numbers continue to be a tale of two types of construction. Single-family home construction continues to be pretty stagnant, but there are builders staying busy with multifamily construction.
The city issued 10 single-family building permits during the month. For the year, the city has issued 18, which is on pace with what the city did last year. (There were 19 issued during the first two months of 2012.) On the apartment front, though, the city issued permits for 22 new apartments in February, bringing the total number of units to 286. Apartment permits come in bunches though, and all the permits are for one project in the city — the new apartment development just west of Wal-Mart at Sixth and Wakarusa. That project, by the way, is being built by Lawrence-based Highland Construction, which indicates Lawrence’s Stultz family — longtime landlords in the community — are behind the project.
In total, the city issued $6.04 million worth of building permits in February. For the year, the city has issued $22.7 million worth of permits, which is up from $10.47 million a year ago. It’s early, so it is not wise to read too much into those numbers yet, but city officials certainly would love for that pace to continue.
• Sales of single-family homes continue a steady climb, according to a new report from the Lawrence Board of Realtors. Lawrence homes sales in February checked in at 46, up from 44 during February of 2012.
For the year, home sales are up about 20 percent — 82 home sales during the first two months of the year vs. 69 for the same period a year ago. But the bigger story is that February marked the 11th consecutive month that homes sales have been higher than the same month a year earlier. That’s the type of statistic that begins to paint a picture of a rebound. Indeed, I’m hearing from some in the industry that agents are now starting to believe that more homes are needed on the market. That hasn’t been the case for quite some time. If that feeling continues, that’s the sort of sentiment that will fuel a rebound in the single-family construction industry.
In terms of other numbers from the monthly report:
— The number of active listings in Lawrence is down almost 30 percent from a year ago — 371 in February 2013 compared to 510 in February 2012.
— The median selling price for the year is $174,125, up from $145,000 during the same period a year ago. But the sample size this early in the year is so small that those numbers don’t mean much.
— The median days on market is at 99, which is up significantly from 79 days one year ago. That’s the one piece of the report that runs a bit counter to the recovery trend.
• You know the housing market has been slow when homes that are built to sell for prices below their market value were slow to sell. But that had been the case for awhile with the southeast Lawrence affordable housing project being built by Tenants to Homeowners.
In case you have forgotten, Lawrence-based Tenants to Homeowners has started construction on the Prairie Wind affordable housing community right near the corner of 26th and Haskell.
The development is listing brand new four bedroom homes for $125,000 to $130,000. The homes have an appraised value of about $175,000. But Rebecca Buford, executive director of Tenants to Homeowners, told me even those homes were moving very slowly in the Lawrence market for the last year or more.
But there are signs that is changing. Buford said the development has put four houses under contract in the last three weeks.
“It is like a switch was turned on in the last month or so,” Buford said. “I think people have just been scared. And it probably wasn’t a good decision to buy if they didn’t think their job was solid. But I think people are starting to feel better about that.”
The Prairie Wind development is set to have 18 homes when completed. Buford said five houses have already been sold and another seven are under construction, with four of those under contract. She said she hopes to have the project fully built and sold by this time next year.
The development does place income restrictions on who can qualify to buy the below-market rate homes. Buyers must have an income under 80 percent of the median income for the area. For a Lawrence family of four that means an annual income of less than $56,650.
• I have some catching up to do here on our listing of property sales as recorded by the Douglas County Register of Deeds. Click here to see the last few weeks worth of reports. There have not been many commercial sales of note, other than the ones we already have reported in past Town Talks. But here are few that caught my eye.
— Maybe James Naismith’s original rules of basketball will be housed in The Oread hotel. I rather doubt that, but it appears the man who bought the rules to bring back to KU has purchased a condo in the hotel building. The listings show a trust held by David and Suzanne Booth bought an upper story condo in the hotel that sits atop Mount Oread.
— The Midland Railway Historical Association in Baldwin City has purchased a piece of property, 1704 College Street, along the railroad tracks, about a block south of its historic station. No word yet on what the plans may be for that location, but the old-time train company has been busy lately. It launched its first dinner train in January.
— It looks like business must be going well for Biemers BBQ at 2120 W. Ninth St. The property transfers indicate the business has finalized a deal to purchase its restaurant location — which used to be the old Bucky’s hamburger joint — from a group led by Lawrence businessman Doug Compton.
I don’t know about you, but a little BBQ and basketball sounds good right about now.
Home sales up in January; new numbers on county’s property tax base; median home values fall sharply in Baldwin, Eudora, rural areas; weekly land transfers
The signs of spring are starting to show up: morning sunlight and chirping birds, an article in the newspaper about crabgrass prevention, and me looking for my hidey-hole when my wife starts talking about the spring cleaning of the garage.
Of course, one other sign of spring soon will be the banners, balloons, pyrotechnic displays and whatever else real estate agents are using these days to attract attention to the large number of spring open houses. So, with that, how about some real estate news today? There are a few new reports of interest out.
• Lawrence home sales in January continued to show signs of improvement. A new report from the Lawrence Board of Realtors found home sales in January were up 44 percent compared to January 2012, rising to 36 from 25. It continues a multimonth streak of sales increases on a year-over-year basis, which has given real estate professionals cautious optimism that a recovery is starting to take hold in Lawrence.
One of the more interesting numbers in the report is that there has been a significant decline in the number of homes on the market, which real estate agents say is a sign the market is starting to get more balanced between buyers and sellers. In January, there were 380 homes on the market, down from 460 during the same period a year ago.
The number of days a home is sitting on the market, though, hasn’t yet started to show that trend. The median days on market: 81, up from 72 a year ago.
• The Douglas County Appraiser’s office has new information out about the county’s real estate tax base. It appears Douglas County and the city of Lawrence once will again will avoid a major hit to their property tax bases.
The numbers aren’t final yet because property owners can still file appeals related to their properties’ assessed values, but the appraiser’s office shows a decline of 0.29 percent for 2013. The total assessed valuation — remember, assessed value is the taxable value, not the market value — checks in at $1.024 billion in 2013, down from $1.027 billion in 2012.
The county is not used to declines but it has avoided the 5 percent or more declines in values that many other markets across the country have experienced.
Just for some historical perspective, I looked up some past numbers. Since 2008, the county’s tax base has grown just 1.3 percent during the tough economic times. Since 2003, the county’s tax base has grown 36.7 percent. To put an even finer point on how the last decade has been a tale of two halves, the numbers show that in the last half of the decade, the county’s tax base has grown by less than 2 percent total. For the first half of the decade, the numbers show that from 2003 to 2008, the tax base grew by 35.8 percent. In case you are wondering, the rate of inflation for that time period was about 17 percent, according to the Consumer Price Index.
The housing bubble was fun for governments who rely on property tax dollars. Now, the question they’re all still trying to figure out: What is the new normal?
• The appraiser’s office hasn’t provided a report that shows the assessed valuation by community yet, but normally Lawrence tracks closely with the overall county total — since Lawrence has most of the county’s tax base within its boundaries.
But there may be real questions about what happens to the tax base in some of the smaller communities and townships in Douglas County.
The appraiser’s office has put together a report estimating the median market values for residential property in each city in the county. The report shows significant drops everywhere but Lawrence. The median value in Lawrence in 2013 is $159,625, down 0.6 percent from the median of 2012.
That’s nothing compared with what the report shows for the other areas of Douglas County. Here’s a look:
• Eudora: the median market value has dropped 10.2 percent to $125,600, down from $140,000. • Baldwin City: Down 7.4 percent to $132,700 from $143,400. • Lecompton: Down 16.6 percent to $83,950 from $100,670 • Rural Douglas County: Down 22.8 percent to $153,400 from $198,805.
I haven’t had a chance to talk to the appraiser yet about these numbers, but it seems to indicate the real estate market outside of Lawrence hasn’t held up as well as the market inside of Lawrence.
• Finally, I have fallen behind on our weekly updates of land transfers and property sales as recorded by the Douglas County Register of Deeds. Click here to see listings for the last couple of weeks.
Lawrence home sales increase by nearly 28 percent in 2012, but home values on the decline, according to two new reports
Another day and another sign that Lawrence’s economy had a bit of a bounce-back year in 2012.
Yesterday we reported on strong growth in retail sales in Lawrence. Well, Lawrence homebuyers are not to be outdone. They actually increased their buying pace faster than shoppers did.
A new report shows homes sales in Lawrence increased by 27.9 percent in 2012 compared to 2011 numbers. Real estate agents sold 899 homes in the city limits during the year, according to numbers compiled by the Lawrence Board of Realtors.
Sales hit an abysmal level in 2011, so having a large increase over those numbers is one thing. But also important to note is that sales totals for 2012 were about 8 percent above 2010 totals. So, the local real estate market made up for more than two years worth of losses in 2012.
Sales of newly constructed homes jumped by nearly 40 percent, totaling 88 for the year. But new home builders haven’t yet returned to the 2010 level of activity, when they sold 102 new homes.
Not all of the numbers indicated a housing rebound. Some indicated that sellers adjusted their expectations downward on what their homes are worth.
The median selling price in Lawrence checked in at $159,500, down 5 percent from $167,900 in 2011. The Board of Realtors report comes out at the same time that the Douglas County Appraiser’s office is finalizing its work on change-of-value notices that will be mailed to Douglas County homeowners.
While the Board of Realtors data shows a 5 percent drop in selling prices, most homeowners shouldn’t expect to see that type of decline in the home values that the county creates to figure your property tax bills. But many will see a decline, and for some this will be at least the second year in a row they’ve seen their properties lose value.
The preliminary numbers show about 28 percent of residential homeowners will see a decline between 2 percent and 4.99 percent in value.
Another 24 percent are expected to see declines between .01 percent and 1.99 percent, while another 8 percent are expected to see values drop by 5 percent or more.
About 33 percent of homeowners are expected to see their values remain steady.
The appraiser’s office is estimating 7 percent of residential properties in Lawrence and Douglas County will see some sort of increase in values.
When you add it all up, local governments may see their tax bases decrease by 1.2 percent to 1.5 percent as they begin building 2014 budgets this summer.
Homeowners should start receiving their change-of-value notices on Feb. 28, and then can begin determining whether they want to contest their values through the county process.
If you are wondering why the Board of Realtors numbers show a 5 percent decline in the average selling price, yet the appraiser is projecting most homeowners will see declines far less than that, there are some reasons.
The biggest is sample size. The Board of Realtors number is a selling price for just 900 homes. The appraiser’s office is trying to create a value for about 30,000 residential homes in the county.
A second factor is randomness. There’s no guarantee that the 900 homes sold by local real estate agents are representative of the type of housing stock that exists throughout the county. For example, four-bedroom ranch homes may have been the big seller in 2012. (This is just an example. I don’t know what the big seller was.) But four-bedroom ranch homes don’t make up the majority of the homes in Douglas County, so it would be difficult to use the selling price of those ranch homes to determine the value of other dissimilar homes.
But perhaps the most interesting reason is foreclosures, or their close cousin, short sales. I don’t have final 2012 foreclosure numbers yet, but I’ll work to get them. What I do know is that the Douglas County Appraiser’s office is not considering many of those foreclosure sales to be valid in terms of being comparable sales to set values for other properties.
On foreclosed properties, banks don’t get to keep the amount of money that is over and above the amount owed on a foreclosed mortgage. So, banks don’t have a lot of natural motivation to negotiate a deal that represents the full market value of a property. Their motivation is to get the foreclosed homes off their books. At least this is how Douglas County Appraiser Steve Miles has explained it to me previously.
In a recent report, he noted he’s seen several foreclosed properties bought and then almost immediately sold for double the purchase prices. That leads him to believe the foreclosure sales aren’t representative of fair market value in most cases.
All of it leads me to believe that it will be another interesting year in Douglas County real estate in 2013.