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Home sales in Lawrence are expected to increase next year, and so too is the amount people will have to pay for houses, according to a new housing forecast compiled by Wichita State University.

But the report also found that — despite good demand from buyers — construction of new homes in Lawrence is expected to remain tepid for the next year. The reason? Lawrence is still struggling to produce jobs.

Stanley Longhofer, director of Wichita State’s Center for Real Estate, told a Lawrence crowd Thursday morning that job totals in Lawrence were only slightly above their pre-recession levels in 2007. Kansas City, in contrast, has job totals that are now about 8 percent higher than 2007 levels.

“This employment factor is having some limiting impacts on new home construction,” Longhofer said as part of the Lawrence Board of Realtors’ annual housing forecast event.

Longhofer noted most every Kansas community other than Kansas City is facing similar job growth issues. Construction of new housing also is being limited by inflation factors. The cost of constructing a house is increasing at a rate faster than home prices in general. That means there is a widening gap between what you would have to pay for a new house versus an existing home. Many buyers are finding the premium price for a brand new home isn’t worth it.

“It is awfully hard for a new home to compete with an existing home on the market right now,” Longhofer said. “Until we see a change in construction prices or really strong population growth, we aren’t going to see much change in that part of the housing market.”

New home construction used to be one of the city’s largest job-producing industries during the 1990s and early 2000s. But Longhofer said numbers for Lawrence show that the industry hasn’t really recovered since the recession of 2008.

Complicating matters is that many of the contractors who previously built Lawrence homes went out of business during the recession, and there haven’t been a lot of new builders take their place.

“The local builders really are doing all they can to keep up with demand,” said Joy Slavens, a Lawrence real estate agent who works with many new homebuilders. “It is a lack of labor force, in general.”

City of Lawrence building permit numbers, though, show a bit of improvement in single-family home construction. Through August, the city has issued 117 permits, up from 102 during the same period a year ago. Those numbers, though, are far from what Lawrence used to produce. Prior to the recession, Lawrence frequently built more than 300 single-family homes a year.

Other information from the Wichita State housing forecast included:

• Lawrence home sales are expected to increase by 2 percent in 2019. That growth rate is in line with the expected national average, but significantly better than the expected statewide average of 0.4 percent.

• Lawrence homes are expected to appreciate in value by 3.9 percent, on average. Longhofer expects 2018 to end with home appreciation of about 4.8 percent. He said there are signs that Lawrence home values are expected to grow more modestly than they did in 2016, when values jumped by just more than 7 percent, on average. He said that spike occurred because Lawrence’s housing market was a bit slow to make post-recession gains.

“It took a while for price appreciation to pick up in Lawrence, but when it did, it did so in a big way,” Longhofer said.

• Lawrence again is expected to have the second highest average home prices of any of the major real estate markets in Kansas. The average selling price in Lawrence is forecast to be about $219,000 in 2019. The Kansas City metro area has the highest average price at about $226,000. Other major markets are: Manhattan, $204,000; Wichita, $157,000; and Topeka, $151,000.

• Housing prices in Kansas City are becoming close to overheated, Longhofer said. He’s forecasting that Kansas City home values will appreciate by 8 percent in 2019.

“Right now, there is a lot of pressure in the Kansas City market,” Longhofer said.

• Longhofer said most of Lawrence’s real estate market would be considered a seller’s market, currently, with limited inventories giving sellers good ability to stick to their asking prices. However, he said the data shows people looking for homes priced $400,000 and above have more ability to negotiate as those large homes are sitting on the market for longer periods of time.

“That part of the market is leaning more to being a buyer’s market,” he said.