February, 2009 Market update

For

Wichita, KS

The Center for Real Estate at Wichita State University and the Wichita Board of Realtors reported sales activity for all of 2008 and January of 2009 this week.

Real estate sales forecast for 2009 shows existing home sales at around 7,500 units, 11% less than 2008.  New home sales are expected to decline by 17% to 1,280 units.  Building permits are also expected to decline 19% from 2008 levels.

No rebound in sales levels are expected until the 4^th quarter of 2009.  This date could be extended depending on how long the current recession lasts.

Housing prices are expected to rise by 3.2% in 2009.  New homes on the market has continued to slow and keep pace with the decreased demand for housing which has kept the market values in the Wichita metro area stable for the last 12 moths and is projected to do the same for 2009.

Home appreciation for 2008 was 1.5% even though the average sales price of existing homes rose by over 13%.  Prices rose the 1^st quarter of 2008 .2%, the 2nd quarter 1.3%, declined the 3^rd quarter 2.2% and rose the 4^th quarter 2.2% for an over all gain of 1.5%.

The January sales decline was more severe than expected.  Sales in January, 2009 declined 35% compared to December, 2008.  New home sales declined 45% for the same period.  It appears home buyers were setting on the side lines waiting to see what congress was planning with the stimulus package that was just passed.  The $8,000 tax credit for 1^st time buyers (no pay back required) and the continued low interest rates should get buyers back into the market.  Of course, this all depends on additional lay-off notices that may still be issued by local industry.

Good news in the local foreclosure rates

And

State and city rankings.

Kansas ranked 36^th in the nation in foreclosures for 2008.  Kansas real estate prices never had the explosive growth over the last 5 years as did other areas in the country. So prices may have stabilized but have not fallen as they have in most of the country.  Only ½% of all properties in Kansas are in foreclosure.  Compare this to 4.5% in Florida, 4.5% in Arizona, 4% in California and 7.3% in Nevada.

Wichita, KS ranked 92^nd among the top 100 metro markets in the U.S. in foreclosures. There were 1,698 properties with filings.  This was .67% of all properties in the city.  This low rate was 156% higher than the year before however and may show a and upward trend for 2009