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2009 Real Estate Wrap Up

1/6/2010

2009 Real Estate Wrap-up

& What

2010 Will bring us.

 

 

 

Existing home sales decreased 4.8% from October, 2009 but were up 40% from a year ago because November was the original month that the $8,000 1st Time Buyers Credit was suppose to have expired. The Tax Credit has since been extended to April 30, 2010 plus a $6,500 Tax credit for existing homes owners who have owned their principal residence for 5 of the last 8 years. Contracts must be finalized by this date and these homes must then close with in 60 days.

The Average sales price has remained relatively stable in 2009 and is currently $120,721. Average days on the market for the 1st eleven months of 2009 were 64 days at 96.69% of the last listed price. 79% of all existing sales were co-op. There have been 8,081 residential sales in the Wichita metro area YTD. That number is 15% below the same period last year and 28% below 2007s figures. In January there was 8.7 months of existing home inventory. That number has dropped to 4.6% in November. 

 

Unlike some coastal&SW markets, Wichita has not seen a large increase in listings during our real estate downturn nor a huge drop in prices.  While some markets in the last 5 years experienced 10% to 15% yearly increases in value of homes, The Wichita Markets were more in the 2% to 4% range.

The average price of new homes sold in 2009 was $239,481. 991 new homes have been sold in the 1st eleven months of 2009. New home inventories are 25% lower than a year ago.

Absorption rates of various price ranges based on November, 2009 closings: 4-5 months of inventory is considered a stable market.

Up to $139,999 3.88 months of inventory
$140,000 to $199,999 5.14 months of inventory
$200,000 to $299,999 7.72 months of inventory
$300,000 to $499,999 9.39 months of inventory
$500,000 to $999,999 11.11 months of inventory
$1,000,000 and up there are 28 homes on the market and NO Closings for November, 2009

 

Where we need good listings:  Below $120,000.  This price range is very busy and should continue that way until April 30,1010 when the extended 1st Time buyers Tax Credit will expire.

The National unemployment rate appears to have topped out in October and should start a very slow slide back to single digits.
The Kansas State unemployment rate dropped to 6.2% in November, 2009. The Wichita, KS rate was in the upper 7% range but may climb a little higher before stabilizing with the recent spat of business jet cancellation for Beechcraft and LearJet.

 

Interest rates for 30 year fixed rate loans dropped to 4.75% in November.  This was the lowest rates in 33 years.  Rates at the end of December, 2009 were 5 to 5.25% for 30 year fixed rate loans.  15 year fixed rate loans were 4.75%.  One year ago rates were slightly above 6% and are projected to go back to those levels by the end of 2010.

 

The Wichita metro market we will see in 2010 will probably look a lot like the market we saw in 2009.  Unemployment will stabilize by Spring 2010 and buyers with jobs will realize that this Spring may be the best time in years to buy that new home. (Low rates, lots of inventory and good prices) We do not expect home sales to be at the 2007 levels again till 2012-13 when the local employment picture should be back to the 4% range.

 

Financing for personal residences is widely available.  Financing for small business is not.  Forget the 0% down loans.  FHA will be the best way to go for minimum, up-front cash investment.  Appraisals will be a little tighter as lenders try to protect themselves from bad loans.

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