ABC World News Features Kansas City Housing Market
Kansas City’s housing market was featured ABC’s World News with Charles Gibson Thursday night in a look at the housing market. Kansas City was focused as a Midwestern city where the new-home market has bucked national trends and began to show positive signs and the early markings of a recovery.“Locally, permits have been up over the last three months,” local home builder Kevin Enyeart of Gale Homes said in an interview with ABC News. “We just wrapped up the local Parade of Homes where we open up all the homes from all the builders metrowide. In our sales office we saw triple the traffic – over 150 car loads of families coming through sales office compared to 40 or 50 during a typical Parade of Homes.”
Enyeart explained that builders have significantly reduced their inventory of new of new homes and that homebuyers were realizing that opportunities to take advantage of competitive prices and low mortgage rates are dwindling.“They are wanting to jump in and take that last opportunity on a purchase before things start to hit that uptick on the bell curve,” he told ABC News.“The general consumer confidence seems positive right now,” Enyeart said. “They are watching the headlines; they are watching the credit tightening. I’ve seen folks coming in worried about where the credit tightening is going to and looking to either take advantage of it before things changes too dramatically or get locked in on rates as they are a little bit lower since there is some uncertainty over where rates are going to go.”While national new-home sales plunged 11.5 percent in August, Midwest sales activity rose more than 7 percent, according to the Census Bureau.“I say to my clients, ‘It’s a buyer’s market – why aren’t you buying?’ ” Chicago Realtor Jeanine Wheeler told ABC News. Despite tougher credit and lending standards, mortgage broker Ken Perlmutter explained that credit remained available for buyers in the new-home market.“There is a misconception out there that we aren’t lending money,” Perlmutter said. We are. We’re certainly eager to lend it to people who want to buy homes.
HOME BUILDERS ASSOCIATION OF GREATER KANSAS CITY600 E. 103rd Street · Kansas City, Missouri 64131-4300OFFICE (816) 942-8800 · FAX (816) 942-8367
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2008 Home Builders Association of Greater Kansas City
Friday, October 10, 2008
New Homes Forecast
Forecast Shows Housing Making Positive Transition in 2008Declining inventories show housing headed in the right direction
After back-to-back down years for both new-home starts and sales, the Kansas City housing market is showing a swing in a positive direction. That was the message from the 2008 Housing Forecast presented Thursday, Jan. 17 by the Home Builders Association of Greater Kansas City (HBA). More than 425 housing professionals attended the forecast event at the Westin Crown Center Hotel.
Related Articles
Dan Whitney Presentation
Tim Underwood Presentation
Kansas City Star coverage Adobe PDF of The Star's forecast coverage
New-home inventory levels are falling quickly and home sales are poised to rebound in 2008, suggesting a stronger, more balanced housing market is right around the corner, according to Dan Whitney, president of the housing market research firm Landmarketing based in Overland Park.
“The local new housing market is in a state of positive transition,” Whitney explained to attendees at the annual housing forecast. “Inventory levels have dropped for the fourth quarter in a row and have fallen 15.4 percent from their all-time high in January 2007.”
Whitney said inventories will continue to fall given the 51 percent decrease in housing starts and 32.6 percent drop in new-home building permits. His forecast calls for new-home permits to dip slightly in 2008 before beginning a steady recovery in 2009 to the pre-housing boom levels of the late 1990s.
“While these corrections are difficult for the building industry, they are necessary to bring the supply in line with the demand,” Whitney said. “The appropriate level of new-home inventory is approximately 1,500 fewer than the current 4,188 homes. The supply and demand balance favors the buyer right now but inventory levels will drop fast creating a more balanced market.”
There were 1,421 more closings than starts in 2007, with Johnson and Clay counties accounting for the bulk of the reduction in inventory. Johnson County posted 490 more closings than starts, while Clay County reduced inventory by 410 homes.
Excess inventory should continue to move quickly in 2008. Whitney’s forecast calls for new-home closings to rebound 18 percent following a 10 percent decline in 2007. That would allow net inventory levels to drop to more normal levels. As a result, Whitney expects the best opportunities for consumers to occur earlier in the year before excess inventories are fully absorbed by the market.
While all prices ranges across the metro have a modest buildup in new-home inventories, Whitney said the degree of concern differs from location to location and price range to price range. In terms of prices, the extremes of the market have been the best performing in terms of inventory levels, with homes priced under $175,000 posting the lowest monthly supply on the market. The second-best performing price range is for homes priced more than $925,000.
The biggest buildup in inventory is among homes priced $225,000 to $625,000, yet Whitney said there are locations where that price range is performing well, such as in southwestern Jackson County and southern Leavenworth County.
Whitney said a key factor impacting Kansas City’s housing market correction is clearing the backlog of existing homes on the market. “The number one reason new-home shoppers give for not being able to take advantage of the housing values now is they cannot sell their existing home. Existing-home sales have to increase to allow buyers to purchase new homes.
While instability in the mortgage market sparked by the turmoil in subprime lending is faulted in some markets nationwide, Whitney said Kansas City is fairing much better than average in terms of mortgage accessibility and availability of credit.“The local mortgage situation is in great shape compared to the highly publicized areas around the country, particularly Florida, California, Michigan and Nevada,” he said. “This national coverage continues to overshadow the local relatively stable conditions in Kansas City and the Midwest.”
As the housing market begins its recovery, questions abound about what the new and improved housing market will look like. Underwood said focusing on the development of new housing choices and better connections between housing and transportation will allow residential construction to maintain its role as an economic engine for the region.
“We need to take a closer look at the demographic trends of our metro and establish a regional vision for housing choices that meet the needs and demands of local families,” Underwood said. “Housing affordability, employment, transportation and the economy are critical issues impacting today’s market. We need to address all of these concerns to ensure that we are building strong, vibrant neighborhoods for Kansas City new-home buyers.”
Whitney agreed with Underwood’s assessment that new housing choices driven by changing demographics and the housing needs of local families is critical to future success.
“There’s too much relying on crystal balls instead of market trends and facts,” Whitney said.
The Home Builders Association (HBA) of Greater Kansas City is the voice of the housing industry and the source for housing information. Comprising more than 1,000 member companies, the HBA represents an industry that contributes approximately $2.5 billion to the Kansas City economy, and supports more than 36,000 jobs in the Greater Kansas City metropolitan area.
After back-to-back down years for both new-home starts and sales, the Kansas City housing market is showing a swing in a positive direction. That was the message from the 2008 Housing Forecast presented Thursday, Jan. 17 by the Home Builders Association of Greater Kansas City (HBA). More than 425 housing professionals attended the forecast event at the Westin Crown Center Hotel.
Related Articles
Dan Whitney Presentation
Tim Underwood Presentation
Kansas City Star coverage Adobe PDF of The Star's forecast coverage
New-home inventory levels are falling quickly and home sales are poised to rebound in 2008, suggesting a stronger, more balanced housing market is right around the corner, according to Dan Whitney, president of the housing market research firm Landmarketing based in Overland Park.
“The local new housing market is in a state of positive transition,” Whitney explained to attendees at the annual housing forecast. “Inventory levels have dropped for the fourth quarter in a row and have fallen 15.4 percent from their all-time high in January 2007.”
Whitney said inventories will continue to fall given the 51 percent decrease in housing starts and 32.6 percent drop in new-home building permits. His forecast calls for new-home permits to dip slightly in 2008 before beginning a steady recovery in 2009 to the pre-housing boom levels of the late 1990s.
“While these corrections are difficult for the building industry, they are necessary to bring the supply in line with the demand,” Whitney said. “The appropriate level of new-home inventory is approximately 1,500 fewer than the current 4,188 homes. The supply and demand balance favors the buyer right now but inventory levels will drop fast creating a more balanced market.”
There were 1,421 more closings than starts in 2007, with Johnson and Clay counties accounting for the bulk of the reduction in inventory. Johnson County posted 490 more closings than starts, while Clay County reduced inventory by 410 homes.
Excess inventory should continue to move quickly in 2008. Whitney’s forecast calls for new-home closings to rebound 18 percent following a 10 percent decline in 2007. That would allow net inventory levels to drop to more normal levels. As a result, Whitney expects the best opportunities for consumers to occur earlier in the year before excess inventories are fully absorbed by the market.
While all prices ranges across the metro have a modest buildup in new-home inventories, Whitney said the degree of concern differs from location to location and price range to price range. In terms of prices, the extremes of the market have been the best performing in terms of inventory levels, with homes priced under $175,000 posting the lowest monthly supply on the market. The second-best performing price range is for homes priced more than $925,000.
The biggest buildup in inventory is among homes priced $225,000 to $625,000, yet Whitney said there are locations where that price range is performing well, such as in southwestern Jackson County and southern Leavenworth County.
Whitney said a key factor impacting Kansas City’s housing market correction is clearing the backlog of existing homes on the market. “The number one reason new-home shoppers give for not being able to take advantage of the housing values now is they cannot sell their existing home. Existing-home sales have to increase to allow buyers to purchase new homes.
While instability in the mortgage market sparked by the turmoil in subprime lending is faulted in some markets nationwide, Whitney said Kansas City is fairing much better than average in terms of mortgage accessibility and availability of credit.“The local mortgage situation is in great shape compared to the highly publicized areas around the country, particularly Florida, California, Michigan and Nevada,” he said. “This national coverage continues to overshadow the local relatively stable conditions in Kansas City and the Midwest.”
As the housing market begins its recovery, questions abound about what the new and improved housing market will look like. Underwood said focusing on the development of new housing choices and better connections between housing and transportation will allow residential construction to maintain its role as an economic engine for the region.
“We need to take a closer look at the demographic trends of our metro and establish a regional vision for housing choices that meet the needs and demands of local families,” Underwood said. “Housing affordability, employment, transportation and the economy are critical issues impacting today’s market. We need to address all of these concerns to ensure that we are building strong, vibrant neighborhoods for Kansas City new-home buyers.”
Whitney agreed with Underwood’s assessment that new housing choices driven by changing demographics and the housing needs of local families is critical to future success.
“There’s too much relying on crystal balls instead of market trends and facts,” Whitney said.
The Home Builders Association (HBA) of Greater Kansas City is the voice of the housing industry and the source for housing information. Comprising more than 1,000 member companies, the HBA represents an industry that contributes approximately $2.5 billion to the Kansas City economy, and supports more than 36,000 jobs in the Greater Kansas City metropolitan area.
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