The Kansas real estate market is currently being supported almost entirely by the fact that the state has maintained employment rates above the national average. Other economic factors are dismal, and the economic decline is expected to continue throughout the remainder of 2009, worsening the ailing housing market. See the following article from Housing Predictor for more.
Employment levels are some of the healthiest in the country in Kansas, but even as unemployment remains under the national average the Kansas housing market is sputtering, unable to start any sort of rebound from the financial crisis. Home sales are up marginally in some areas, while others still linger as markets experience housing deflation at increasing rates.
Kansas is one of the slowest growing states in the country as many residents migrate to more populated Sunbelt states. The state’s agricultural business is ailing. A sudden rise in home sales in Kansas City, spurred by bargain priced foreclosures and the federal government’s first time buyers’ tax credit was short lived. As the inventory of foreclosures rises, home values are damaged and are projected to see further erosion over the remainder of the year.
Option Arms and other adjustable rate mortgages are resetting with nearly 1 in 3 homeowners in Kansas City underwater with homes that are worth less than what they could get in today’s marketplace. An increasing number will walk away from mortgages that are too expensive to afford. The plight of the Kansas City housing market will take a long time to recover from. Kansas City is forecast by Housing Predictor to deflate an average of 15.9% in 2009.
Outside of Kansas City, the city of Overland Park boomed in the good times being selected by numerous publications as being one of the best places to live in the country. Home prices sky-rocked only to come slamming down when the credit crunch hit. The average home listed for sale on the market still hovers around $400,000, but the majority of sales are less than half that figure. Overland is forecast to see average home values deflate 16.7% in 2009.
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Local Kansas Housing Markets at a Glance
In Topeka a deflating home market brought in an onslaught of bargain hungry investors. But a round of multiple offers on foreclosures slowed the process for investors leery of the high number of vacant homes left abandoned by their owners. The pace of any sort of rebound coupled with mortgages that have been harder to obtain slowed as a result.
Topeka wasn’t a fast paced sort of market during the boom days, existing mainly on mom and pop buyers, who buy homes as a primary residence. But the financial crisis has impacted the community as home values drop, and are forecast to deflate another 12.9% on average in 2009.
Home sales in Wichita are also slow, lagging behind last year’s pace. But the inventory of homes on the market is near to reaching a balance with slightly more than five months worth on the market. Lay-offs in the airplane manufacturing business are hurting the marketplace. More expected job cuts will have a serious impact on the local economy, sending more homes into foreclosure.
Higher unemployment and the national financial crisis is creating fear in the local economy, which won’t improve until consumer confidence improves. The cycle is hurting home values, which are forecast to deflate an average of 10.6% on average this year. But as more homes are purchased by investors and others at lower prices, Wichita will see slow but steady improvement out of the negative cycle.
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.