RELATED INFORMATION Longhofer: Wichita housing market will recover next year (Wichita Business Journal)

Kansas home sales will rise by 4.2 percent in 2011, while home price appreciation across the state will remain essentially flat. So says the 2011 Kansas Housing Markets Forecast, published today by the Wichita State University Center for Real Estate.

Stan Longhofer

"The effects of the home buyer tax credit continue to ripple through the markets," said Stan Longhofer, director of the WSU Center for Real Estate. "Sales should hit bottom in most markets this year before rebounding in 2011."

Longhofer will present the forecast at the Wichita Marriott at 8:15 a.m. Wednesday, Oct. 6. He will be available for interviews after his presentation at about 9:30 a.m.

The 2011 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 2011.

The title of this year's forecast is "Ripple Effects," reflecting the challenges in identifying underlying market trends in the wake of the federal home buyer tax credit programs.

Highlights of the 2011 Kansas Housing Markets Forecast include the following.

Statewide forecast

• Home sales – Sales across the state should fall 3.4 percent this year to 29,600 units, due largely to the sharp third quarter decline following the expiration of the home buyer tax credit. Sales should rebound in 2011, rising by 4.2 percent to 30,850 units.
 
• Construction – Single-family residential building permits in Kansas appear set to rise by 5.5 percent this year to 3,860 units. Construction activity will continue to rise in 2011, increasing 1.3 percent to 3,910 units.

• Home prices – Home prices across the state will end the year down 1.1 percent on average and then remain essentially flat in 2011, rising by only 0.2 percent.

Kansas City market

• Home sales – Total home sales in the Kansas City area will end the year down 5.1 percent at 24,450 units. Sales activity should rebound in 2011, rising by 2.5 percent to 25,050 units.
 
• Construction – New home construction activity in the Kansas City metropolitan area appears to have reached bottom, with single-family residential building permits poised to increase by 7.9 percent in 2010 to 2,060 units. This recovery should continue next year, with permits rising to 2,100 units.
 
• Home prices – Home prices in the Kansas City metropolitan area are beginning to stabilize, but should fall by 2.2 percent in 2010 and another 1.3 percent in 2011.
 
Lawrence market

• Home sales – Total home sales in the Lawrence area are on pace to rise by 4.6 percent this year to 1,310 units. Sales activity should accelerate in 2011, with sales rising by 9.2 percent to 1,430 units.
 
• Construction – New home construction in the Lawrence metropolitan area also appears to be on the rebound. Single-family residential building permits are set to increase by 7 percent to 200 units in 2010, followed by a 10 percent increase in 2011 to 220 units.
 
• Home prices – Home prices in the Lawrence metropolitan area have continued to fall in 2010 and should end the year down 3 percent. Prices should stabilize in 2011, falling by a negligible 0.5 percent.

Manhattan market

• Home sales – Total home sales in the city of Manhattan will remain essentially unchanged in 2010 at 600 units. Sales should rise by 3.3 percent in 2011 to 620 units.
 
• Construction – New home construction in the city of Manhattan has risen sharply this year, and the number of single-family residential building permits issued by the city in 2010 should rise 11.7 percent to 200 units. Construction activity will drop off slightly in 2011, falling 5 percent to 190 units.
 
• Home prices – Home prices in the Manhattan metropolitan area rose at an average annual rate of 6.8 percent during the first seven years of the past decade. Since then prices have remained essentially flat, defying the boom-bust trend of other hot markets across the country. Prices should end 2010 down 1.6 percent before rising by 0.8 percent in 2011.
 
Topeka market

• Home sales – Total home sales in the Topeka area should rise by 2 percent in 2010 to 2,670 units. Sales will rise to 2,700 units in 2011, a 1.1 percent increase.
 
• Construction – Topeka new home construction activity will continue to decline in 2010, with single-family residential building permits in the metropolitan area dropping to 270 units. Construction activity will rebound in 2011, rising by 14.8 percent to 310 units.
 
• Home prices – Home prices in the Topeka metropolitan area will remain flat in the coming year, dropping by 0.9 percent in 2010 and 0.5 percent in 2011.
 
Wichita market

• Home sales – Total home sales in the Wichita area will decline by 5.5 percent in 2010 to 8,140 units. Sales will rebound in 2011, rising by 6.6 percent to 8,680 units.

• Construction – New home construction activity in the Wichita area has continued to decline, and single-family residential building permits should end 2010 down 14.8 percent at 1,070 units. The market should stabilize in 2011, with permits rising by 0.9 percent to 1,080 units.

• Home prices – Home price appreciation in the Wichita metropolitan area will be essentially flat in 2010, down just 0.1 percent. Home prices will rise again in 2011 by 1.4 percent for the year.
 
For more information and a copy of the entire 2011 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.