Fri June 8, 2012
Kansas City Home Sales On The Rise, But It's A Different Market
Like many young couples, Jeremy and Elizabeth Bixby want kids, more space and a better neighborhood. So a year ago last March, they decided to sell their 40-year-old duplex in northern Overland Park, near Shawnee Mission Drive and Metcalf.
They priced it to sell quickly, but things didn’t work out as planned.
“Needless to say by July 1st, I was starting to wonder if it would ever sell,” said Elizabeth Bixby. “We had thought when we bought that the market had hit bottom, and we realized that it hadn’t," she said.
Nobody even came to their open houses. Meantime the Bixbys delayed having children and even passed up job opportunities because they couldn’t move. They cut the price several times, and finally took their duplex off the market.
But when they put it back on this spring, it sold in two weeks.
It’s a Different Market
Sellers, realtors and even buyers noticed that the Kansas City housing market had changed. Across the metropolitan area, pending home sales climbed 13 percent over spring 2011. For Johnson County alone, the jump was 26 percent.
Some real-estate agencies broke sales records in April.
Prices climbed too, by a little over five percent metro-wide.
Kansas City area homebuilders got to work as well, posting a 50 percent jump in home construction permits over the first four months of 2011.
Shifting from a buyer’s market to a seller’s market?
Home sellers haven’t been the only ones effected by the rebound. Bryan Tamke and his fiancée, both of whom work at Cerner, started looking for a two-bedroom house in a nice neighborhood this spring. “I think we both kind of went thinking, oh, this is still a buyer’s market, we’re going to be able to get a great deal, we’re going to be able to go back and forth on negotiations,” said Tamke. But, as he notes, “Wasn’t like that.”
Tamke and his fiancée offered full price on a house in Brookside, as soon as it hit the market. Their efforts fell short.
“Now we have an offer on a new place, and it’s over asking price, which I didn’t think we would ever do,” said Tamke. “I think we realize the value in getting it now, and what it could potentially become as the market keeps rebounding,” he said.
The house they’re buying was in foreclosure. It’s been vacant for a year, but it’s in Armour Hills, another popular neighborhood in Kansas City. Prairie Village, Leawood and Mission are some of the other hot areas.
Other parts of the market have remained relatively flat. Dan Whitney is president of a company called LandMarketing. He tracks local real estate, especially new construction.
“We are not in high gear certainly, maybe not even in gear, by historical standards,” said Whitney.“But we are certainly above last year.”
2011 was, some realtors say, likely the bottom of the housing market here. It was a particularly bad year for home construction. Even with the 50 percent jump in housing starts this year, Whitney says the number is still only one-fifth as many permits as were being issued in at the peak in Kansas City. Prices have risen, but not to pre-recession levels, when there were 13,400 permits in a single year.
The Beige Gage
Whitney says the current trends are hopeful. He expects a surge in homebuilding to catch up with pent-up demand. However, he does not believe that the Kansas City housing market is yet in full recovery. The signal for that, he says will be when young couples once again start buying homes in what he calls “oatmeal suburbia." These are houses that, unlike those in the hot markets of Brookside, Prairie Village and Leawood, are not “destination properties,” not the type of place a person would treasure, just a sensible alternative to renting and a good place to raise a family, and they tend to be painted beige. Whitney says his “Beige Gauge” is not moving, and that it won’t until young couples like the Bixbys have easier access to loans, and, perhaps more importantly, the confidence to dive back into the housing market.
"I think now actually is a very good time to buy," Elizabeth Bixby said. "We just need some time to recover from the stress of selling the home, because it took us over a year to do that. It’s an extremely stressful situation, we’ve never done it before and we don’t particularly want to do it again. So when we buy a home this time, we want to be there for quite some time."
Real estate agents say the recession has shaped a generation of buyers. The ones they’re seeing now are better organized, more clear-headed and analytical than those of past years. So while much of the Kansas City-area housing market is still subdued, the sales going through tend to be a lot less risky, a lot more viable, than those that preceded the downturn.