Kansas home sales should rise by 7.3 percent in 2010, while new home construction activity will fall slightly. So says the 2010 Wichita Housing Market Forecast published today by the Wichita State University Center for Real Estate.
“Many markets across the state have begun to show signs of a rebound,” said Stan Longhofer, director of the WSU Center for Real Estate. “Although slow job growth will present challenges for some markets, it appears that the worst of the housing downturn is behind us.”
Longhofer will present the forecast at the Wichita Area Builders Association office at 730 N. Main in Wichita at 9 a.m. Friday, March 5. He will be available for interviews after his presentation at about 10 a.m.
The 2010 Kansas Housing Market Forecast reviews current housing market conditions in for selected markets across the state and forecasts housing market activity through the end of 2010. The title of this year’s forecast is “Spring Thaw,” reflecting the forecast’s findings that many housing markets across the state are beginning to strengthen.
Highlights of the 2010 Kansas Housing Market Forecast include:
Kansas market
• Home sales – Many markets across the state showed signs of recovery in 2009, even before the new homebuyer tax credit was enacted. This trend should continue in 2010, with total home sales rising by 7.3 percent to 32,501 units.
• Construction – Although the decline in construction activity appears to be slowing, a sustained rebound is not likely this year. Total single-family building permits should fall by 1.7 percent in 2010 to 3,597 units.
• Home prices – Although home prices have declined over the past couple of years in some of the larger markets in the northeast part, most of the state has seen slow steady appreciation, even during the downturn. This trend should continue, with average home prices across Kansas rising by 1.0 percent in 2010.
Lawrence market
• Home sales – Total home sales in the Lawrence area have fallen by more than 30 percent since the 2005 peak. Although the tax credit caused sales to surge in the fourth quarter of last year, there has been no sign that the market has fundamentally turned. Sales in 2010 are forecasted to decline another 4.9 percent to 1,191 units.
• Construction – New home construction in the Lawrence area will continue to decline in 2010, falling by 4.4 percent to 179 units.
• Home prices – Home prices in the Lawrence area have declined slightly over the past three years. Although the extended homebuyer tax credit will buoy prices in the first half of the year, once the credit expires prices will likely fall again, ending the year essentially unchanged.
Wichita market
• Home sales – Total home sales in the Wichita area have fallen by more than 30 percent since 2006, bottoming out in December 2008. Since then, sales have increased modestly, with a sharp bump in October and November due to the new homebuyer tax credit. Sales should rise in the first half of 2010 before leveling off in the latter part of the year. Overall, sales in 2010 should rise by 5.1 percent to 9,059 units.
• Construction – New home construction in the Wichita area will not see a measurable rebound this year, with permits falling 1.4 percent to 1,239 units.
• Home prices – Wichita area home prices have continued to appreciate at a slow, steady pace through the recent downturn. This should continue in 2010, with average home prices increasing by 2.1 percent for the year.
For more information and a copy of the entire 2010 Kansas Housing Market Forecast, visit the Center for Real Estate Web site at http://realestate.wichita.edu, or contact Stanley D. Longhofer, director, Center for Real Estate at (316) 978-7120 or realestate@wichita.edu.