Wichita, KS metro area Real Estate and Business update, Feb. 2012

Wichita, KS metro area Real estate, Business and Financial update for February, 2012

Data from the South Central Kansas MLS shows that Home sales have stabilized in the last year and will increase in 2012. In 2011 there were 4.1% less existing home sales than 2010. The 1st month of 2012 shows a 18% increase in sales compared to January, 2011.

There were 12,759 new residential properties placed on the market in the MLS in 2011. This was 11% below the amount listed in 2010. In January of 2012 there were 1128 homes placed on the market, only 10 units more than a year ago.

Total existing homes available for sale at the end of 2011 was 3374 units, this was 9.7% less than a year before. In January there were 3450 existing homes for sale, a 8% drop from January 2011.

The big drop in inventory was in new homes available for sale. That number is down to 317 homes in January, 2012, a drop of 315 from a year ago. Builders were unwilling in 2011 to carry too much inventory/spec homes and banks were unwilling to fund those builds.

The average sales price of existing homes sold in January of 2012 was $106,989. The metro area showed the average Days on market (DOM) was 99, average sales to list price was 95.24% and 402 homes went under contract that month compared to the 1073 new existing listings.

In January there were 138 conventional loans, 131 cash sales, 86 FHA loans and 32 VA loans.

Interest rates for 30 year fixed rate loans hovered around 3.875% and 5/1 adjustable loans could be written at only 2.5% for a 5 year period.

Nationally, foreclosed homes made up 35% of all January sales. Investors accounted for 23% of all purchases last month.

How do national sales in 2011 compare to previous years. 2011 sales of existing homes increased 1.7% to 4.26 million compared to 4.19 million in 2010. Peak demand was 7.1 million in 2005 during the national housing boom.

Other business news for the Wichita Metro area

• Boeing Aircraft landed another record order with a 230 order for B-737 aircraft from Lion Air out of Indonesia. Lion Air also has options for 150 more. The value of this order is $22.4 billion. The good news for Wichita is that 80% of the fuselage is built by Spirit Aerospace in east Wichita.

• New homeowners to get a 5 year tax rebate. The city council of Wichita has approved the 1st reading of the tax rebate. The Wichita Builders Association Wichita are putting this program in place to stimulate the area housing market. Only certain developers/builders will be allowed to participate, there will be a limit on the number of homes in the program and there will be a short time limit on how long the program will be available.

• Good Sports of Kansas City has proposed a 53,000 sq ft multi-sport facility at K96 and Greenwich road in NE Wichita. The facility would be part of a 370 acre tourism and shopping district that includes the Cabella’s store set to open this spring. Good Sports is seeking a $50 million Star Bond district to help fund the project. The Wichita City Council has unanimously approved the district. Local and state sales taxes will be used to pay off the bonds.

The core of the field house would be 6 basketball courts to be used for national and regional tournaments. In addition there would be facilities for Archery, power lifting, boxing, cheerleading and volleyball on a regional and national level.

• In early February Inman news ranked the 10 top real estate markets expected to rebound in 2012. Wichita, KS was ranked #2 nationally based on the resurgence of the aircraft industry. The Top five markets for improvement were: #1 Raleigh, NC; Wichita, KS; Rochester, NY; Des Moines, IA & Chattanooga, TN.

• The Wichita area unemployment rate dropped to 6.9% (the lowest level in 3 years). This compares to the 8.3% national rate. The rate was 10% in October of 2009.

• Union Pacific railroad announced they will be adding around 4,000 to 5,000 jobs in 2012 and spending $3.6 Billion on infrastructure improvements in 2012. The Wichita/Newton area is a major grain transfer and track area for the railroad.

Wichita, KS economic and real estate update. December, 2011

Wichita, KS economic and real estate report for December, 2011

The last month and especially last week was good economic news for Wichita, KS.
The unemployment rate in November, 2011 dropped to 8.6% nationally and dropped to 7.2% for the Wichita metro area and 6.7% for Kansas. Jobless claims the middle of December, 2011 dropped to 366,000. A sustained rate of 375,000 or below shows a economic recovery in place.

Last week the average 30 year, fixed rate mortgage dropped to 3.94% matching the all time low in October, 2011.

Employment in the aircraft sector should increase significantly in early 2012, Spirit Aerospace who builds parts for every Boeing built aircraft and builds the entire fuselage-nose-tail cone of the B737 aircraft has received three record orders over the last month, 3each one breaking the record of the order before.

Emirates Airlines ordered 50 B777 aircraft November, 14; Indonesia Airlines ordered 230 Boeing planes November 18. Many of these planes were the B737 model and December 14 Southwest Airlines ordered 208 B737 aircraft plus FedEx ordered 27 new B737 freighter aircraft. Spirit Aerospace, who is now working at almost full capacity, will have to hire many workers to help Boeing Seattle keep up with this increased demand. Look for a hiring announcement after the 1st of the year. That’s my guess!

The South Central Kansas MLS releases November, 2011 area home sales figures.

Existing home sales decreased 3.6% between October and November, 2011 according to the latest figures, but increased 2.6% on a year over year basis. The median sales price of homes sold in November decreased 2.1% compared to October and decreased 4.4% on a year over year basis. This does not mean that any one particular home decreased or increased from last year.

Existing home inventory this month decreased to 3,607 homes in inventory compared to 3,911 last month. The existing home inventory this month is 6.4% lower than a year ago when it was 3,854 units.

Months of inventory for existing homes was 7.2 months in November. A balanced market is a 3-5 month supply of homes.

Again in October, 29% of all sales were cash. 36% were conventional loans and about 20% were FHA loans.

Inventories of New homes continue to drop as builders are not replacing sold inventory and banks are reluctant to loan on spec homes. YTD inventory is down 30% and down 58% from the end of 2008.

The average price of existing homes YTD for 2011 is $124,800. The average price of new homes increased to $255, 405.

A total of 6,839 new and existing homes have sold in the 1st 11 months of 2011 with a total of 11,753 homes being listed for sale. Average list to sales price was 95.86% with the highest list to sale price in the city being the far west side at 97.01%. The highest list to sale in Sedgwick County was the SE area including Derby.

Why Wichita will be the place to be.......

Why Wichita?

Friday, November 4th, 2011 I attended a seminar put on by the Wichita Area Association of Realtors. The Professionals Development committee invited several people “in the know” about Wichita and its future to address Realtors about the future of the Area.

Speakers were:
Lavonta Williams, Vice Mayor of Wichita, KS
Pat George, Kansas Secretary of Commerce
John Rolde, CEO of Go Wichita and Visitors Bureau
Susie Ahlstrand, Interim President, Great Wichita Economic Development Coalition
Jack Pelton, Retired Chairman, President and CEO Cessna
Ron Whiting, Wichita Business Coalition on Health Care
Jeff Fluhr, Wichita Downtown Development Corporation.

Below are high points on what is happening in the Wichita Metro area and why the tough economic times should be behind us and 2012 will be a much better year.
Downtown Wichita: 6 floors of the Petroleum building were just bought by a local investment group.

A full block of downtown Wichita is getting redeveloped. The Kansas health Foundation is building a $7-$9 million meeting venue next to its headquarters on East Douglas. In addition, plans for the block include a urban park, parking garage and the new Ambassador Hotel.

Other downtown projects just completed or now in progress or the planning stage include the $25 million Drury Hotel just completed, Cargill’s Innovation Center, 2 new projects on St. Francis, purchase of the 100 S. Market and the The Board of Trade Building. The new Airport Terminal starts in 2012.

There are projected to be around 4,000 new jobs created in the Wichita area in 2012.

Pat George, Kansas Secretary of Commerce said that business’s (local and overseas) are starting to recognize that Kansas workers are team Players and have a high work ethic.

One of the largest wind farms in the world has just been announced to be built West of Kingman and out to Greensburg, KS. The Project is expected to cost at least $700 million and does not include the millions needed to move addition transmission lines to the area.

Did you know that the Kansas cost of living index is 9% below the U.S. Average?

Jack Pelton, Former President of Cessna Aircraft probably had the best news for Realtors looking for more business. He said the increase in orders for Boeing aircraft will have Spirit gearing up to build planes at historic rates. Boeing just announced a new engine for the B737 and they have received almost 600 orders. That production line may double in the number of planes built every month. Production lines for the B787 and the B747X are also expected to increase. Spirit Aerospace is already working at pretty much full capacity and will have to do major hiring to satisfy Boeing's requirements.

Mr. Pelton said many of the Wichita area suppliers have gotten increased business from other sources and the Aircraft business will max them out and require substantial additional hiring. In addition to Spirit, Cessna has announced two new jets and the local business jet market should start improving in 2012 and 2013. Continuing the good aircraft related news is the new U.S. Tanker to be built in Seattle but converted to the Tanker mode in Wichita at Boeing Military starting in 2014. Hiring for this should start in 2013.

October, 2011 Housing report, Wichita, KS

Wichita, KS home Sales and Market Update for
October, 2011

October, 14, 2011 Stan Longhofer, the director of the WSU Center for Real Estate held a industry meeting to discuss the Wichita area Housing market. His observations were:

1: This is the time to buy given the historically low interest rates plus pricing and supply of homes in the Wichita metro area.

2: Dan Jones with Capital Federal said we will see no better time in our lifetime to own and finance a new home

3: Wichita housing market has been showing a slow but growing number of sales over the last few months.

4: The housing forecast shows 2011 sales will end up down by 1.8% but 2012 sales should rise 8.8% in Kansas. Wichita sales are projected to rise 10% in 2012.

5: New home sales will see increases in sales in 2013. Longhofer says there is a lot of pent up demand and those who don’t act in the next year will be kicking themselves for not doing it.

The full report and power point can be found by going to www.kake.com

Rose hill has announced a home buyer incentive plan.

The plan is a 5-year tax incentive for new home construction and a 10 year grant program for the purchase of existing and spec homes. New home buyers will get a 95% tax abatement for 5 years. Both programs are open till Dec. 31, 2012.
This program is similar to one announced Earlier by Maize, KS. That program gives a 100% grant toward property taxes for the 1st 3 years. The grant then reduces in steps to 40% by the tenth year. This program is a grant for new houses in the city limits of Maize, KS.

South Central Kansas MLS September, 2011 Area Home Report

Existing home sales decreased 5.3% between August and September of this year but increased 20.9% over the same period in 2010. The median sales price is 6.3% higher on a year over year basis. Total sales for the year are down 6% from 2010.

Existing home inventory continues to drop and is 6.9% lower than a year ago.
Months of inventory for existing homes were 6 months in September, 2011. This figure is at the edge of a buyer’s to seller’s market and total new listing taken YTD for 2011 are down 11% from the year before and available listing for sale are down 8% from last year at this time..

23% of all sales in September were Cash sales, 38% were Conventional loans and 25% were FHA loans.

The average sales price of existing homes was $125,973 with sellers receiving an average of 96.2% of their last advertised price. Average days to sale for the last listing on these homes were 92 days for the entire metro area. West Wichita averaged 72 days, NE Wichita average 119 days and Butler County averaged 95 days.

New homes closed last month had an average price of $224,750. New home inventories are down 31% from the same time last year.

September, 2011 Real Estate report for Wichita, KS

Wichita Real estate Market is Stabilizing
September, 2011 Report

The South Central Kansas MLS has released data for 20100 real estate sales thru August, 2011. Existing home sales increased 2.6% between July and August and increased 32.2% on a year over year basis. The median sales price of sold homes was up 8.5% from july and 21.6% from a year ago.

New home sales are still lethargic with only 50 new homes selling in August. With an average price of $227,005, new home sales are down 19.9% from a year ago.
Existing home inventory dropped slightly to 4,056 units in August, 2011. The inventory level is 7.4% lower than it was a year ago.

Months of inventory is starting to enter the area for a balanced market between buyers and sellers. Existing home inventory was 5.8 months and new home inventory was 6.7 months despite the overall low level of spec homes available for sale.

At the end of August, 2011 there were 5,016 residential sales compared to 5,493 a year ago. Total monthly sales in 2011 have exceeded the sales of a year ago the last two months. We expect this trend to continue the rest of the year.
There were only 4,056 existing homes for sale at the end of August, 2011 compared to 4,378 a year ago.

The average price of an existing home sold YTD for 2011 is $125,388. The average home sold for 95.90 % of the last listed price and took 106 days to sell. So far this year, a total of 9,031 homes have been listed for sale with 4,660 closing and 622 under contract. The average price of new homes sold in 2011 is $257,698.
Needing real estate asistance?

Call me at 316-554-2831 or 1-8--779-SOLD. You can visit me at a few of our web sites: www.move2ks.com, www.realtor-shorty.com and www.wichita-homes.com.

Wichita Real estate and Economic news for August, 2011

Wichita Real estate and Economic news for August, 2011

Existing home sales in the Wichita metro area increased .3% from June 2011 to July 2011 but increased 32.3% on a year over year basis. The median sales price increased 3.6% compared to June and increased 12% on a year over year basis. Total sales for the year still lag 2010 YTD sales 13% because of the Large Tax credit available last year. This should balance out by the end of the year.

Nationally homes sales declined 12.7% in July after rising the previous two months. Home sale were up 13.1% on a year over year basis.

Existing home inventory remained steady June to July, 2011 and was 2% lower than a year ago. New home inventory was 29.3% lower than a year ago. There have been 12% fewer residential homes listed in 2011 that the same time period in 2010

Nationally there was 7.2 months of inventory. Inventories were down 17.1% from June, 2010 and continue a 13 month drop in supply of homes. Locally there was 6.1 months of inventory in the Wichita metro area in July, 2011

Days on the market nationally are down to 88 from a high in March, 2011 of 105 days.
Nationally the Federal Housing Finance Administration is reassessing the government’s refinance programs. Too few borrows have taken advantage of this program to refinance and try to avoid foreclosure.

Consumers had to have a 80 to 125% loan to value ratio to qualify. The government is looking at expanding this ratio because so many home owners are under water. It is estimated that the average family could save at least $2,000 a year if they could refinance with the favorable interest rates now available.
FHFA said they need to review the HARP program and find ways to get more homeowners to participate.

Several new announcements came from the aviation sector that should help Wichita’s job picture in the next few months.

• Boeing’s 747-8 Freighter has received Federal Certification. Boeing has 114 orders for the freighter and 56 orders for the larger passenger version.

• Wichita aviation suppliers are gearing up for the increased production of all Boeing aircraft. This along with the work local companies are doing for the Gulfsteam G650, Bombardiers c Series and Airbus’ A350 should increase hiring at all of these suppliers.

• Boeing has just completed flight testing for the Rolls Royce engines for the B787 Dreamliner. Boeings is still flight testing the B787 with GE Engines.

• Bombardier’s Learjet 85 will be delivered in 2013. The fractional ownership company, Flexjet, has already started its sales program of the new larger jets to their corporate clients. This program will support 600 workers at the Wichita plant.

July, 2011 Housing report for the Wichita, KS metro area.

July, 2011 Housing report for the Wichita, KS metro area.

Existing home sales increased from May to June, 2011 according to data released by the South Central Kansas MLS. Existing sales decreased 10.8% on a year over year basis. Existing and new sales decreased 22% during this same time period.

Median sales price of existing homes sold increased in June 0.4% over May but were down 3.2% from 2010’s numbers. Only 43 new homes were sold in June but the median home price was 35.1% higher than a year ago.

New and Existing homes YTD were down 22% from 2010, 215 lower than 2009 and 32% lower than 2008 when the massive layoffs started in the Wichita MSA.
Some good news:
Existing home inventory was down .3% from May. Total new listings added to the market YTD were also down 11% from the same time last year.

Slower sales have increased the total number of homes available for sale at the end of June, 2011. There were 4,197 existing homes and 367 new homes available for sale. Existing home inventory is up 2% from 2010, 18% from 2009 and 20% from 2008. New home inventories are down 28% from last year’s levels. It looks like builders/lenders have got the message and are waiting for the market to turn before building more spec. properties. Based on June sales there is 6.1 months of inventory of existing homes. A balanced market is closer to 4-5 months.

New foreclosure filings have dropped over 25% from last year’s levels. This drop may have more to do with the banks reluctance to add any more properties to the ones they must maintain than more owners being current with their loans.

Internet activity on real estate web sites is increasing which may hold well for the coming months. Buyers seem ready to start buying at a healthy pace once they get clearer signals of how the economy and job market will be. For now, they are fence sitting waiting for something to stir them to action.

Other Local economic news…….

Mortgage interest rates continue to be very favorable for home buyers. FHA/VA rates are 4.25% for 30 year fixed rate loans and 3.5% for 15 year fixed rate loans.
Conventional 30 year fixed rate loans are in the 4.625% range and you can get a 5/1 adjustable loan for 3.25%. This is a great program for corporate buyers or others who expect to move up in price range with in a 5-6 year period.

Downtown Wichita got a serious boost when it was announced that three new projects or renovations were going to take place. One group of investors have bought the “hole in the ground” on East Douglas and plan to build a new building. The Dockum Drug Building was bought and there are plans to build a Boutique hotel with 117 rooms. Another group of investors have purchased another downtown Douglas building and plan to convert it to apartments.

The Kansas Lottery commission announced that the Kansas Star Casino being built in Mulvane has already contacted them with early expansion plans. More space is now planned to the proposed gaming floor, hotel and RV Park.