Wichita State News

Center for Real Estate releases Kansas housing forecast

Thursday, October 11, 2012

Kansas home sales will rise by more than 6 percent in 2013. So says the 2013 Kansas Housing Markets Forecast published by the Wichita State University Center for Real Estate.

Stan Longhofer
Stan Longhofer
“Home sales this year are up in nearly every market across the state,” said Stan Longhofer, director of the WSU Center for Real Estate. “This trend should continue in 2013, with sales rising by 6.3 percent.”

Longhofer will present the forecast at the 2012 Kansas Association of Realtors Conference and Education Expo at the Capitol Plaza Hotel in Topeka, Kansas at 10:15 a.m. Friday, Oct. 12. He will be available for interviews after his presentation at about 11:15 a.m.

The 2013 Kansas Housing Markets Forecast reviews current housing market conditions in markets across the state – including Kansas City, Lawrence, Manhattan, Topeka and Wichita – and forecasts housing market activity through the end of 2013.

The title of this year’s forecast is “Picking Up Steam,” reflecting the continued improvement of housing markets in Kansas.

For complete city reports, go to: http://www.wichita.edu/j/?1869 (Kansas City); http://www.wichita.edu/j/?1870 (Lawrence); http://www.wichita.edu/j/?1871 (Topeka); and http://www.wichita.edu/j/?1872 (Manhattan).

Highlights of the 2013 Kansas Housing Markets Forecast include the following.

Statewide forecast

  • Home sales – Home sales across the state are poised to rise by nearly 13 percent in 2012, led by strong growth in the northeast part of the state. Although the pace of growth will slow in 2013, sales should rise again by more than 6 percent to 33,670 units.
  • Construction – Statewide, new home construction will rise only slightly in 2012, with strong gains in Kansas City, Lawrence and Manhattan being offset by declines in Wichita. As construction slows in the northeast next year, permitting in Kansas will decline by nearly 7 percent, falling to 3,095 units.
  • Home prices – Average home price appreciation across the state is set to rise by nearly 2 percent in 2012, with the rural parts of the state showing stronger growth than the metropolitan areas. Home prices should rise another 1.5 percent in 2013.

Kansas City market

  • Home sales – Kansas City home sales are on pace to increase by nearly 18 percent in 2012. This trend should continue in 2013, albeit at a slower pace, with sales rising by more than 5 percent to 28,420 units.
  • Construction – New home construction activity in the Kansas City area will end 2012 up slightly at 2,870 units. Financing constraints for both builders and homebuyers continue to hamper the new home market, however, and permits should fall by 5.6 percent in 2013 to 2,710 units.
  • Home prices – Tightening inventories of homes available sale have help Kansas City area home prices to stabilize in recent months. Home prices should begin to rise in 2013, ending the year up 1.5 percent.

Lawrence market

  • Home sales – Home sales in the Lawrence area are on pace to rise by more than 13 percent in 2012. Sales should continue to strengthen in 2013, rising by nearly 16 percent to 1,390 units.
  • Construction – New home construction in the Lawrence area has risen somewhat in 2012. Permitting activity should rise another 3 percent in 2013 to 165 units, but will still remain well below the strong numbers seen in the early part of the last decade.
  • Home prices – Lawrence home prices have begun to stabilize, and are forecast to rise by just over 2 percent in 2013, as inventories of homes available for sale settle into levels consistent with a balanced market.

Manhattan market

  • Home sales – The Manhattan housing market remains the strongest in the state. Sales within the city of Manhattan are set to rise nearly 13 percent in 2012, and then another 3 percent in 2013 to 660 units, the highest level on record.
  • Construction – New home construction continues to be strong in Manhattan as well, and should end the year up 26 percent to 235 units. Although permits should fall to 215 units in 2013, the biggest constraint on the new home market in the Manhattan area is the limited number of desirable lots available for sale.
  • Home prices – After dipping slightly in 2011, home prices in the Manhattan metropolitan area are set to rise by 1.7 percent in 2012 and another 3.3 percent in 2013.

Topeka market

  • Home sales – The Topeka housing market continues to improve, despite continuing employment declines due to state budget cuts. Home sales are on pace to rise by nearly 4 percent this year, but will level off at 2,710 units in 2013.
  • Construction – New home construction in the Topeka area continues to languish. Although permits are up slightly for the year, they should drop again in 2013 to 225 units, the lowest level on record.
  • Home prices – Home prices in the Topeka area have remained stable in recent years, avoiding major declines during the housing downturn. This should continue in the coming months, with prices ending 2013 up 0.9 percent, close to their 2010 levels.
  • Wichita market
  • Home sales – Since the expiration of the home buyer tax credit in the summer of 2010, home sales in the Wichita are have risen steadily, if slowly, for two full years. Sales are on pace to rise by more than 7 percent this year. This growth will continue in 2013, with sales rising another 4 percent to 8,370 units.
  • Construction – New home construction continues to languish, with permitting activity in the Wichita area set to end 2012 at its lowest level on record. Despite some help from new home incentive programs in the area, permits are likely to rise by only 2 percent in 2013.
  • Home prices – Wichita area home prices fell only modestly over the past two years, and seem poised to rebound in 2013, rising by 1.3 percent. As in many markets across the state, the inventory of homes available for sale has declined sharply over the past two years, giving sellers more leverage than they’ve had in several years.

For more information and a copy of the entire 2013 Kansas Housing Markets Forecast, visit the Center for Real Estate website at http://realestate.wichita.edu, or contact Longhofer at (316) 978-7120 or realestate@wichita.edu.

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Created on Thursday, October 11, 2012; Last modified on Thursday, October 11, 2012