Wichita, KS real estate information

2009-07-10T16:31:00.000-07:00

Wichita was just rated the #2 metro area out of the top 90 in the U.S. for the least commute time for residents and least traffic delays.

McConnell AFB has added 15 air refueling tankers to the 31 tankers already based in Wichita. By October, 48 tankers will be based in the "Air Capital". With the additional people, and projects being completed to support the new planes there will be a $500 million dollar a year impact for the metro area. The KC-135 tankers arrived from bases in North Dakota, California and Georgia. Wichita is now home to one of the largest tanker bases in the USAF.

Cessna has formally cancelled the Columbus Wide Body Business jet. They are paying back $10 million in bonds already given to them by the city and the county. Cessna will revisit the concept once the Business jet market returns.

There have been approximately 12,000 lay offs announced or completed in the last year in the Aviation sector in Wichita since last summer. These lay offs are projected to last 15-18 months before call backs start.

The new 15,000 seat downtown arena is being completed faster than planned. It may be finished 3 months a head of schedule. The arena was fully paid for by a 30 month 1/2 cent increase to the local sales tax.

May Home sale data for Wichita, KS

2009-06-17T14:44:00.001-07:00

Wichita, KS metro homes sales
For
May, 2009

The Wichita Area Association of Realtors and the South Central Kansas MLS have released data for May, 2009 reference Wichita, KS metro home sales figures.

Existing home sales increased 10.5% in May compared to sales in April, 2009. Existing home sales were up to 650 units from 588 units. Sales are down 26% from last year based on May, 2008 data. The median sales price of existing homes in May increased .9% compared to the month before. This data is contrary to most sales figures of the other top 100 real estate markets.

New home sales were also up in May over April of 2009. They increased by 2.5%.. The median price of homes sold in May was up to $215,400 compared to $196,310 in April, 2009. Total sales in may were down 7.8% compared to one year ago.

Total re-sale home inventory was up 5.4% compared to last month. Total inventory is .6% lower than one year ago. New home inventory decreased slightly from April’s data and was 7.7% below one year ago.

Existing sold homes averaged 69 days on the market for May sold properties. The average list to sell price was 96.3%.

Absorption rates for various price ranges: Months of Inventory

Under $120,000 4.67 Months
$120,000 to $180,000 4.44 Months
$180,000 to $250,000 8.56 Months
$250,000 to $400,000 9.4 Months
$400,000 to $750,000 8 Months

April, 2009 MLS sales update.

2009-05-21T14:01:00.000-07:00

April real estate update
For 2009

Sales figures are in and April’s sales were 9.1% higher than March. They were still 27.5% below 2008’s numbers. Average sales price of existing homes in April was $113,445. The existing inventory of homes remained relatively stable from March to April this year and to April, 2008 figures. Total existing listings available for sale are 10% below 2008 levels.

The new home inventory dropped 7.9% from March’s levels and was 7% below April, 2008’s level. Average sales price was $254,000.

Absorption rates:

Homes priced below $120,000 have 4.5 months of inventory.

There are 5.2 months of inventory in the $120,000 to $180,000 price range.

$180,000 to $249,900 price range of homes is 9.67 months of homes for sale, down from 12.75 months in March.

$150,000 to $399,999 price range has 11 months of inventory and anything above 400,000 has 3 years of inventory.

1st quarter, market update, 2009

2009-05-12T13:54:00.001-07:00

Real Estate market update
For
1st Quarter, 2009

Kansas ranked #36 out of the 50 states in lowest foreclosure rates for 2008 at 0.51%.

Wichita ranked #92 out of the top 100 markets in lowest foreclosure rates at 0.67%

Average sales prices for the Wichita MLS have increased each of the last two years. Only 31 of the top 162 metro markets had an increase from 2007 to 2008.

With just 46 agents in 2008, RE/MAX Realty Professionals was ranked #374 out of the top 600 real estate offices nationally. The company was also the top company in units sold out of the top 5 companies in total sales for 2008.

The average sales price for existing homes for the 1st quarter was $114,115. Average days on the market (last listing) were 71 days at 96.08% of final list price.

77% of all real estate sales in the metro area were co-op sales. (listing and seller agent work at different companies)

The average sales price of new homes for the 1st quarter of 2009 was $249,797.

In March of 2009, the number of closed transactions was 32.5 % lower than a year before. For the 1st quarter the reduction was 32%.

Sales are down 43% from three years ago, the busiest year of sales in Wichita. Total listings on the market are about the same as a year ago. New home inventories are down 6%.

Absorption rates for different price ranges:
$0 to $119,999 is 4.5 months, a very good number.
$120,000 to 179,900 is 6.4 months
$180,000 to $249,999 is 12.75 months. Anything over 4-6 months becomes a buyer’s market.
$250,000 $399,999 is 14.5 months
$400,000 to $749,999 is 17 months. Only 11 homes out of 189 sold in this price range in March, 2009.

Good and not-so Good news for the Wichita, KS area

2009-04-29T08:37:00.000-07:00

Good and not-so Good news for the Wichita, KS area
April, 2009

Peter Greenberg, the travel editor for “Today’s show” and the Newsmax Magazine, based in Florida, has named Wichita, KS the Number 1 city for Best American Values. Wichita ranked high in the following areas: Family friendliness, culture, wholesomeness, devotion to religion and community activities. Hospitality and friendly businesses came in next. We were rated lowest in scenic beauty (it is very flat here) and education (the new $300 million dollar bond issue) should help here.

Kansas City and Edmond, OK were the only other Midwest cities rated.

Investors are starting to re-enter the Wichita real estate market as they choose where to invest and ant a more stable market than stocks. Our team has defiantly seen this over the last two months as we sold 8 twin homes, 2 office builds and one strip center.

Kathleen Sabelius, KS Gov. was sworn in yesterday as Health and Human Services Secretary. Mark Parkinson the Lt. Gov. (a Republican turned Democrat) was sworn in as KS’s 45th Governor.

Siemens, a German Corporation, will decide this week if Hutchinson, KS (30 miles NW of Wichita) will be the home of its U.S. plant for building Wind Turbines.

Cessna Aircraft Company laid off 4,000 workers at the end of march and has just announced another 1,300 60 day notices to Wichita workers. Cessna is also suspending the building of a new plant for the $27 million Columbus business jet due to the erosion of the business jet market in the U.S. and overseas.

Wichita, KS is a highly ranked city.

2009-04-04T14:25:00.000-07:00

Wichita was a highly ranked city in 2008

Wichita, KS for most of 2008 outpaced the rest of the nation in the quality of its real estate market, job increases and local private and public building projects. The economy started catching up with Wichita in the 3rd quarter and buy the 1st quarter of 2009 lay-offs increased the local unemployment rate to 6% and there for slowed down real estate sales.

Before all that happened Wichita has received many accolades in 2008

U-haul ranked us the #1 city for inbound moves
Wichita is once again an All-American City Finalist
MSN.com ranked us one of the best cities to enjoy spring
One of top cities for Filmmakers to live
#11 in least congestion for the top 100 U.S. Cities
Veros Real Estate ranked us the #1 real estate market for 2008
Forbes.com ranked us the 2nd best city for jobs
Best city for bargain real estate by MSN
Wichita ranks high on wealth building survey by Salary.com.
Wichita, KS just ranked #6 on a survey of 69 cities for building personal wealth and Quality of life.
Wichita, KS just ranked #1 in MSN’s nine best, livable cities.
The cities had to have at least 500,000 population in the metro area. Wichita was ranked one of the most affordable in the Study. The high job growth, values of homes, quality of life, revitalization of the downtown and new Arena contributed to the ranking.

We are sure these ranking will fall in the next couple of years as Wichita recovers from the economic downturn but they are an indication of the inherent strength and desirability of Wichita and the Midwest.

Wichita, KS real estate and economic report

2009-04-03T08:21:00.000-07:00

1st Quarter, 2009
Real Estate & Economic report for the
Wichita, KS metro area

Another Round of lay offs in the aviation industry was announced this week in Wichita, KS. In addition, there will be two to three companies doing furloughs for two to three weeks this summer. Total lay offs in the Aviation industry announced or all ready done exceed 10,000 workers. This will be a total employment impact of 20,000 plus workers before the end of the year.

Before last fall, Wichita had seemed to be immune from the financial hardships of other areas of the country. But after 16 months of a recession, the negative job impact was bound to hit the local area.

Nationally, an upturn in the economy is projected in the 3rd to 4th quarter of 2009. Wichita will not see a local upturn until the following year. It’s just a reality that corporations do not go out and buy a $20,000,000 jet because they had one good quarter.

In contrast to what has happened in 2009, U-Haul has issued a report on metro areas that had more than 5,000 moves in or out. Wichita ranked #1 for % of inbound moves over outbound moves in 2008.
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Wichita, MLS data for the 1st two months of 2009

Wichita closed sales for the 1st two months of 2009 were down 32% from last year. Last years sales for the entire year were down 16% from 2007 sales data.

Total listings on the market compared to last year is only up 2% and total new listings added to the market is actually down 3% but the dramatic decrease in sales has pushed up the months of inventory in most price ranges.

The average sales price for the 1st two months has dropped from last year but it’s in line with the previous two years. Average days on the market of sold properties was 71 days (does not take in to account previous listings of the same property) and average list to sale price was 95.85%. These numbers are basically the same as last year. A significant piece of data is the 779 sold existing homes in the 1st two months compared to the 1,965 new listings, 2.5 times as much. This may be a fore warning of things to come over the next few months.

The absorption rate on inventory has increased since last fall’s report.

There is 6 months of inventory below $120,000

8.25 months of inventory from $120,000 to $160,000

11.9 months of inventory from $160,000 to $200,000

20.25 months of inventory from $200,000 to $300,000

17.35 Months of inventory from $300,000 to $400,000

These inventory levels are based on sales for February, 2009 and total listings available.

mar., 2009, Economic update for Wichita, KS

2009-03-12T09:07:00.000-07:00

March 12, 2009
Wichita, KS Economic update

Wichita, KS city council members have voted to add another Bridge from the core area of Wichita to the Cities’ West side, the fastest growing area in the metro area. Presently there are only two accesses west and the new bridge will increase traffic flow by 50%.

Kansas will receive $1.75 billion of the federal stimulus package to rebuild roads, universities, help with education and the health care system.

Federal budget cuts could delay the replacing of the U.S.A.F.’s aging tanker fleet. A five year delay is being considered on the $100 billion dollar program that Boeing Military is bidding on. Should Boeing get the contract, all major modification of the aircraft will take place in Wichita.

A recent survey of area employers shows that 70% plan to no job cuts over the next three months. 15% of those surveyed plan to hire more employees and 11% plan to cut some employees.

Wichita, Kansas Real estate market update, 2-2009

2009-02-26T08:39:00.000-08:00

February, 2009 Market update
For
Wichita, KS

The Center for Real Estate at Wichita State University and the Wichita Board of Realtors reported sales activity for all of 2008 and January of 2009 this week.

Real estate sales forecast for 2009 shows existing home sales at around 7,500 units, 11% less than 2008. New home sales are expected to decline by 17% to 1,280 units. Building permits are also expected to decline 19% from 2008 levels.

No rebound in sales levels are expected until the 4th quarter of 2009. This date could be extended depending on how long the current recession lasts.

Housing prices are expected to rise by 3.2% in 2009. New homes on the market has continued to slow and keep pace with the decreased demand for housing which has kept the market values in the Wichita metro area stable for the last 12 moths and is projected to do the same for 2009.

Home appreciation for 2008 was 1.5% even though the average sales price of existing homes rose by over 13%. Prices rose the 1st quarter of 2008 .2%, the 2nd quarter 1.3%, declined the 3rd quarter 2.2% and rose the 4th quarter 2.2% for an over all gain of 1.5%.

The January sales decline was more severe than expected. Sales in January, 2009 declined 35% compared to December, 2008. New home sales declined 45% for the same period. It appears home buyers were setting on the side lines waiting to see what congress was planning with the stimulus package that was just passed. The $8,000 tax credit for 1st time buyers (no pay back required) and the continued low interest rates should get buyers back into the market. Of course, this all depends on additional lay-off notices that may still be issued by local industry.

Good news in the local foreclosure rates
And
State and city rankings.

Kansas ranked 36th in the nation in foreclosures for 2008. Kansas real estate prices never had the explosive growth over the last 5 years as did other areas in the country. So prices may have stabilized but have not fallen as they have in most of the country. Only ½% of all properties in Kansas are in foreclosure. Compare this to 4.5% in Florida, 4.5% in Arizona, 4% in California and 7.3% in Nevada.

Wichita, KS ranked 92nd among the top 100 metro markets in the U.S. in foreclosures. There were 1,698 properties with filings. This was .67% of all properties in the city. This low rate was 156% higher than the year before however and may show a and upward trend for 2009

$8,000, 1st time Buyer's tax credit

2009-02-24T13:26:00.000-08:00

Taking advantage of the new
$8,000, 1st Time buyers Tax Credit.

How would you like to own a new home for free?

Let’s say you are a renter paying $950 a month to rent a small home. I can sell you a $110,000 home with payments $125 below what you are paying for rent, give you a tax deduction on the interest and taxes you are paying and reimburse you your initial down payment and closing costs.

How is this possible?

The federal government is giving 1st time buyers or folks who have not claimed a MTG interest deduction for the last three years up to $8.000 off of the taxes they owe or will give them a refund for the difference if they owe less than Tax credit. 1st time buyers can deduct 10% of the purchase price of a new home up to $8,000 from their tax obligation.

Let’s say you bought a $110,000 home. Total down payment and closing costs on a FHA fixed rate loan would be around $7,000. The Tax credit to you would be $8,000 or $1,000 more than it cost you to buy the home. Payments would be at least $125 less than renting the same home plus you get additional tax deductions for the taxes and interest paid. Over $3,000 back the 1st year over costs paid.

Don’t want to wait till next year for the tax credit? Have your employer increase the amount of deductions you claim and get the money back each month for the 1st year.

Additional questions: Call me at 316-554-2831 or visit my web site at www.realtor-shorty.com

January, 2009 Wichita housing update.

2009-01-24T08:11:00.000-08:00

Wichita housing and economic update

Kansas ranked 6th in the nation for new jobs in 2008. Only 14 of the 50 states had an increase in total jobs with the majority being located in the central United States. Texas had the largest increase in jobs surpassing all increases in the other 13 states.

Unemployment in November was 4.7% in the Wichita metro area. This rate is well below the national unemployment rate and well below the 2003 unemployment rate of 8.3% in 2003 caused by the 9/11 terrorist strike and subsequent reduction in commercial aircraft orders. The recent announcement of up to 2,000 additional layoffs should not have a serious impact on home sales in 2009 because Wichita consumers backed away from purchases in 2008, 16% below 2007 levels. These sales levels were lower than they should have been and were caused by a lack of confidence in the economy. Fortunately, in Wichita, listings were down 13% which caused the local market to remain balanced between sales and homes on the market. In fact, the average price of homes sold rose by over 10% in 2008 compared to 2007. The medium price rose by 5%. This increase was mostly caused by the inability of low end buyers to find cheap-minimum down loans rather than an over all increase in Wichita home values.

Home foreclosures rose 12% in 2008 but the Wichita, KS market remains well below levels in most other cities and states. Kansas had only 1.6 % of homes in foreclosure compared to 2.97% nationally. Wichita never had the huge increases in prices as other areas did nor were there excessive subprime mortgages used in the local area. In 2005 there were only 1,618 foreclosures in Sedgwick County. There were 2,066 in 2008.

2008 Wichita, KS MLS Statistics

2009-01-22T10:25:00.001-08:00

2008 MLS Stats for the Wichita, KS Metro area

The Wichita, KS metro area survived the 2008 housing meltdown better than most real estate markets. Home values in the 1st half were up 3.5% and were relatively flat for the 2nd half. The overall market in units sold declined 16% from the previous year which was the 2nd best year on record for the area. Volume sold for existing homes declined 13% but was the 2nd best year on record. New home sales were 1561 units which was the lowest since 2001.

The market was able to maintain a stable presence because new & existing listing added to the market actually declined 13%. This stabilized the market. Average days on the market of existing homes were 63 days and the average sold to list price was 96.74% for the 4 county areas. The number of existing homes for sale at the end of 2008 was 10% lower than 2007.

Surprisingly the Average sales price of existing homes rose 13% to $133,262. Median prices rose 5%. The average new home sold rose 10% in price. This does not mean all prices rose this amount but that folks were just buying more expensive homes. The large increase in existing homes had more to do with the elimination of sub-prime loans, larger down payment requirements and credit score levels.

Over 3/4ths of all existing sales were co-op and 2/3rds of new home sales were co-ops.

Absorption rates for existing single family homes at the end of 2008.

There was 4.5 months of inventory for homes under $100,000.
There was 4.7 months of inventory in the $100,000 to $159,999 range
There was 7.8 months of inventory in the $160,000 to $199,999 range.
There was 9.2 months of inventory in the $200,000 to $299,999 range
There was 9.8 months of inventory in the $300,000 to $499,999 range
There was 16 months of inventory in the ½ million plus range.

Wichita, KS real estate update for 2008

2009-01-19T15:43:00.000-08:00

Real Estate Update for 2008

2003 thru 2007, Wichita‘s average increase in home values rose 15.2%. 2008 values rose 3+% the first half of the year and were stable the second half. The Wichita, Kansas metro area was only one of 5 to 6 areas out of the top 100 metro areas that showed an increase in home values for 2008. There were areas in Florida, Arizona and Nevada that showed as much as a 30% drop in values during the same period.

Wichita real estate sales were down roughly 18% in 2008 compared to 2007 but a similar reduction in listing for sale tempered the reduction and created a balanced market for the metro area. 2008 sales were similar to 2003 sales which at that time was a record for the metro area.

The national unemployment rate has passed 7.2% and is projected to go close to 10% before the stimulus packages before congress take effect. Wichita’s rate is 2/3rd’s the national rate even with the latest round of lay offs in the aviation sector.

Interest rates have reached a 37 year low the end of 2008 and January, 2009. 30 year fixed rate mortgages can be found in the 4.875 to 5% range with no points or origination fees. Now is an excellent time to refinance your home or possibly buy that new home.

Below is an example of what these lower rates mean to you:

Original loan of $150,000 at 6.75% shows a P&I payment of $972.90.
Refinance at 4.875% the same $150,000 loan and get a $793.81 payment.
That’s almost a $175 monthly savings you can apply to the principal, pay off high interest rate credit cards or for the same original payment, buy a $33,500 higher priced home.

Final sales results have come in for 2008 and all the RE/MAX brokers in Wichita were again #1 in Listings sold for 2008 and #2 for total sales. RE/MAX Realty Professionals two offices were #1 in units sold per agent of the top 5 companies in total sales. All the RE/MAX Realtors were #1 in units sold per agent of all real estate brands. The two offices of RE/MAX Realty Professionals were #5 in the city in total sales last year and did this with 48 agents. The 4 companies who out produced us averaged 188 agents.

2008 board and agent Production stats
For the South Kansas MLS

The Wichita Board of Realtors ended the year with approximately 1769 agents and the South Kansas MLS finished with 1880 agents. Two years ago there were approximately 2300 MLS agents.

1880 agents in the MLS at the end of 2008. The year started with about 200 more.

1596 agents had at least one sale in 2008

677 agents or 35% had 2 or less sales.

Only 798 agents (42%) had at least a sale ever other month.

There were 20086 units sold by the 1880 agents, or an average of 10.86 sales per agent based on the end of the year #’s. Units sold are sides of the transaction.

The top 5% of the agents did 4681 units sold, 23% of the total. The average units sold per agent was 24.9.

The top 10% of the agents did 7410 units sold, 37% of the total. The average units sold per agent was 19.7.

Wichita, KS MLS Stats for October, 2008

2008-12-10T15:21:00.000-08:00

January 1, 2008 to October 31, 2008
MLS Statistics Komen Race Helpers
For Wichita, KS metro area MLS

The # of residential sales for October, 2008 was 822 homes. That is the 3rd lowest # for the year and 17.3% below October, 2007.

YTD closings of existing homes is 8,768 compared to 10,259 YTD for 2007. This is a 14.4% drop in closed homes for 2008.

New residential listings declined in October, 2008 to 1,115 units compared to 1,247 in October, 2007. YTD new listings were 13.2% below the total YTD for 2007.

The total number of existing listings available for sale at the end of October, 2007 was 4.6% less than a year ago. There were 10.2% less new homes available than 2007. Unlike other metro areas, listing inventories in the Wichita metro area have actually dropped which has helped the Wichita market actually have a positive increase in average sales price compared to 2007. Out of the top 100 metro markets in the U.S., Wichita ranked #4 in average value increase for 2008

Average DOM for existing home in 2008 was 64 with an average list to sales price of 97.01%.

West Wichita and SE suburban Sedgwick County had the tightest market. Zone 100 or West Wichita averaged 49 days on the market and 98.09% list to sales price. Zone 900 or SE Sedgwick County was 53 DOM and also 98.09% list to sales price. The average price of existing homes in October, 2008 was $123,412 and the average price of new construction was $235,564.

Absorption rates for various price ranges:

Price range Units sold Units on the market Months of inventory
Under $100 340 1411 4.15
$100-140 169 647 3.83
$140-200 174 821 4.72
$200-400 120 874 7.29

$400+ 17 210 12.35

2008-12-05T15:16:00.000-08:00

Wichita economic and real estate update:

Kansas is in the lead to get the new U.S. Bio-defense lab. It would be located in Junction City, KS-about 2 ½ hours NE of Wichita.
The $563 Million federal bio-defense lab is also wanted by Texas, Georgia, North Carolina and other states.
Should Kansas be chosen the construction of the lab would bring 1,600 temporary jobs with a payroll of $183 million to the state.

Wichita home prices continue to hold their own in a report just released by the U.S. Office of Federal Housing Enterprise Oversight. Wichita's prices grew by .8% from the third quarter of 2007 to the third quarter of 2008. Third quarter prices were 2.2 percent lower in the third quarter than in the second quarter of 2008 but show a gain for the year. There is 15% fewer listing on the market than a year ago with average days on the market at slightly more than 2 months.

Kansas banks, Credit Unions and Savings and Loans are all showing strong 3rd quarter results. All credit union's net worth climbed 5.7% compared to the 3rd quarter of 2007. Three Wichita area banks/savings and loans have declined funds from the federal bailout

Wichita, KS real estate and jobs update for November, 2008

2008-11-30T12:57:00.000-08:00

Wichita, KS employers (mostly aviation companies) have announced 1,500 proposed Lay-offs for the next few months. The majority of these companies are taking a pro-active approach to tightening up their staff in the chance that they will have fewer sales in the next year and may lose some of the record orders they now have. Another view was giving the companies an opportunity to get rid of some Dead Wood ( weak employees) that they no longer needed.

Because of these lay offs and the down turn in the national economy, Wichita State university has revised their 2009 Jobs forecast downward but at the same time they are still projecting an increase in jobs for 2009. The projection now is 1,650 additional jobs with half being in the aviation field.

The WSU leading index has declined but stil remains only slightly below it's all time high of 128. The index signals change to the Wichita economy six months in the future.

Existing home sales fell by 9% in October in the Midwest. The median price fell by 6.7% to $149,400. The Average home price fell in all 9 major cities tracked by the index but rose in two smaller cites; Wichita, KS and Omaha, NE. The report showed a 10% increase in the average sales price in Wichita to $127,000. Part of the reason for this large increase was the lessor numbers on buyers in the lower price ranges and the very stable market that Wichita has had over the last 5-7 years. Wichita prices in the preceding 5 years went up only 15.3% compared to double digit gains every month in many parts of the country. Over all sales are down in Wichita approaching the 20% range but the dramatic drop in interest rates just before Thanksgiving may reverse this trend.

Top U.S. Housing Markets

2008-11-25T10:19:00.000-08:00

STRONGEST HOUSING MARKETS

National Association of Realtors strongest housing markets, by price appreciation, for third quarter 2008:
City Median price % change
1. Elmira, N.Y. $105,000 +12.5%
2. Decatur, Ill. $83,400 +8.7%
3. Bloomington, Ill. $168,400 +8.1%
4. Wichita $125,300 +5.5%
5. Tulsa $139,800 +5.1%
6. Amarillo, Texas $128,300 +4.2%
6. Trenton, N.J. $342,500 +4.2%
8. New Orleans $166,800 +4.1%
9. Charleston, W.Va. $127,700 +3.5%
10. Buffalo, N.Y. $114,200 +3.2%

Source: National Association of Realtors

Steady but slow appreciation is the hallmark of the Wichita, KS metro housing market which in the 3rd quarter of 2008, propelled it to the fourth-best market in the United States in Average home appreciation.

The Strongest price gains were affordable markets with healthy economies. A number of Mid-American cities meet these criteria.

Sales are down in the Wichita area but that is tempered by an equal drop in active properties on the market.

Foreclosures and "Short" sales

2008-11-23T11:56:00.000-08:00

November 20, 2008 Meeting with
Regional VP of Countrywide Home Loans and staff.

The following is notes and observations from a very frank meeting about the economy, short sales and foreclosures with representatives of the Mortgage industry, Title officers and top Wichita real estate agents.

90% of all foreclosures were caused by job loss, divorce and health issues.

The Huge LTV loans gave no wiggle room to borrowers when they got in trouble.

90% of all requests for short sales have at least one issue of Fraud connected to them. This is why the lenders are taking so long to approve these cases. Most lenders will wait till the loan is in default at least 90 days before taking any action. 50% of lenders will not process short sales at all.

8 out of 10 short sales that are written will not close. It takes from 2-6 months to do a short sale if only one lender is involved, double that time if there is a 2nd or 3rd lien against the property.

Prior to 1960 only 4% of all loans were by investors. From 1960 to 2000 that number doubled, in the next 6 years it doubled again. Now the number is approaching 26%.

1.5 trillion has been invested by foreign investors to buy homes in the U.S.

Immigrant buyers have some of the lowest default ratios of home loans.

The greatest defaults in home loans are loans issued in the last two years.

Sub Prime loans were originally started as a way for less the qualified buyers to own real estate. It was thought that after they cleaned up their credit that they would re-finance the loans to “A” paper loans. In fact less than 5% of these loans were ever upgraded. Maybe if a person has a poor payment history, this does not change with time…..

Buy and Bail: This was a practice where a person knew they could not sell a home or were so upside down that they would have a huge loss if they did sale. The buyer bought a new home in their local market or where they were transferred to and leased their present home. Once the loan closed on their new home they stopped making payments on the old home and let it go back to the bank. There were a number of web sites promoting this along with some mortgage lenders and Realtors. Now the new lenders will not count as income the lease payment on the old home.

40% of all sales in the U.S. in the past few months have been of Foreclosed or “Short” sale home.

Over 1 trillion in homes value has been lost in the last year. 2.6 trillion in stock values just since the Presidential election.

Good news: Wichita, KS has the 4th best value increase of homes in the United States so far in 2008 with average values going up from $118,800 to $125,300. We did not have a housing bubble. Average increase in values for the previous 5 years was 15.3%.

Bank of America and Countrywide have committed to a 8.5 billion re-write of home loans.

In the 1900’s most home loans were a 40% LTV, it took 50 years to go to a 52%LTV, 40 more years to go to a 89% LTV and 10 years to go to almost a 100% LTV. Now equity in the home….This is where the problem started.

Wichita, KS city and economic update

2008-11-14T12:03:00.000-08:00

Wichita, Economic and city update

The United Way of the Plains has raised its highest total of funds via pledges in the history of the Charity. Over $16,000,000 has been pledged to the United Way Campaign. This is another indication of the strength of the Wichita and Central Kansas economy.

Wichita teacher, Vanessa Martinez was one of 80 educators across the United States honored by the Milken Family Foundation as top educators and teachers for 2008. Martinez was awarded a check for $25,000 for her excellent work in an Elementary school.

The Wichita school system Bond Campaign passed during the November elections. Over $350 million was approved for improving schools, recreation facilities, swimming pools, tennis courts in the Wichita area. This bond issue is on top of a previous Quarter Million Bond issue that was passed over 6 years ago to improve schools and build new elementary and Secondary schools. Wichita schools will now be able to compete with the suburban school districts that had been the beneficiary of the growth in small towns and suburban areas adjacent to Wichita.

The Wichita Police department’s crackdown on gangs in the last couple of years is bearing fruit. Gang related homicides have dropped 40% from a year ago and aggravated assaults are down 31%. In the last year almost 200 gang members have been arrested and charged with over 360 crimes. Wichita police plan to continue the crackdown the rest of this year and in to 2009.

Economic data for the 1st week in November, 2008

2008-11-10T08:33:00.000-08:00

The Labor Department reported that 240,000 jobs were lost in October, which was worse than the expected loss of 200,000 jobs. In addition, the Unemployment Rate jumped to 6.5%, up from last month's read of 6.1% and reaching the highest unemployment rate since 1994. And if the current numbers weren't bad enough, there were heavy downward revisions to August and September numbers, which erased an additional 179,000 jobs. So far in 2008, a total of 1.18 million jobs have been lost, with 651,000 job losses coming in just the past three months. Look for things to get worse before they get better, as the unemployment rate will likely top 7% soon.
Friday's Jobs Report was brutal and would typically nudge the Fed to cut their benchmark rates in an effort to spur on the economy. But with the Fed Funds Rate already at 1%, the Fed doesn't have much more room to cut. This means that Stocks, which worsen on poor economic news, will likely continue to struggle as a result.
Speaking of rate cuts, the Bank of England, the European Central Bank and a few other countries central banks all lowered interest rates last week to help their economies. The good news is that these cuts should have a positive effect on the US Dollar - and therefore will also help Dollar denominated oil prices stay near present levels.
With some of the negative economic news, Bonds did manage a huge, three-day 160bp rally in the middle part of last week, and Bonds and home loan rates were able to hang on to much of this improvement on Friday. As a result, Bonds and home loan rates ended the week nearly .25% better than where they began.
THE WEEKEND IS THE PERFECT TIME TO ENJOY SPENDING SOME OF YOUR HARD EARNED MONEY, BUT DID YOU KNOW THAT A SAFE DEPOSIT BOX MAY NOT BE THE BEST PLACE TO STASH YOUR TREASURES AND VALUABLES? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW TO LEARN MORE.
Forecast for the Week
Just like last week, Friday will again be this week's big day for economic reports, as the Retail Sales Report will be released. The Retail Sales Report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. This report is the most-timely indicator of broad consumer spending patterns, and given the current economic climate, it could be very ugly. Retailers are already anticipating one of the worst Christmas seasons in a long time, so it will be important to see where things currently stand as we head into the holidays. But the dismal retail situation could spell bargains for those who are still shopping.
Remember, when Bond prices move higher, home loan rates improve. And as you can see in the chart below, Bonds did enjoy a huge rally last week on the heels of heavy losses from a few weeks ago. I will continue to be watching closely to see if Bonds can break through overhead technical resistance and help home loan rates to continue improving.
Chart: Fannie Mae 6.0% Mortgage Bond (Friday Nov 07, 2008)
The Mortgage Market View...
Are Safe Deposit Boxes Actually Safe?
We all have important documents and valuables in our homes that we want to protect from theft and disaster. For many people, safe deposit boxes at banks provide a safe place to store those valuables outside of the home. After all, file cabinets and even fire-resistant cases in your house are still susceptible to intense fires, water damage, and even theft.
But, did you know that safe deposit boxes may be susceptible as well? In fact, during the attack on the World Trade Center and Hurricane Katrina hundreds of bank vaults were damaged or destroyed. Worse yet, valuables stored in a safe deposit box aren't insured by the bank if damage or theft occurs.
And if you use a safe deposit box to sock away cash for an emergency, you may be surprised to know that a safe deposit box isn't completely protected. Law enforcement officers can get a court order to raid your safe deposit box, and if the IRS ever freezes your assets, that freeze includes your cash and valuables in a safe deposit box.
All this doesn't mean that you should hide valuables and cash in your closet or drawer...but it does mean you should take precautions and specific steps to make sure your valuables are protected if you put them in a safe deposit box. If you have a safe deposit box or are considering getting one, the following steps can help you make sure your documents and valuables are protected:
Call your homeowners insurance company to make sure the contents are covered, especially when placing jewelry or collectibles of value in the safe deposit box.
Put important documents such as marriage licenses, car titles, insurance policies and family records in airtight plastic bags or sealed containers to help protect them from water damage.
Make copies of your important documents and store them at home or with your attorney, so you can access your information if something does happen to the originals. Remember, important legal documents such as wills and power of attorney documents should always stay with your attorney. You can place copies in your safe deposit box or keep them at home, if you want to have access to the information. But leave the originals at the attorney's office.
Make an inventory list of everything in your safe deposit box and keep the list in a safe place at home or in another location. You may even want to take pictures or a videotape of the contents just in case you need to show more proof if something happens.Finally, make sure you inform your family members and your attorney about your safe deposit box! Otherwise, the contents may revert to the state when you pass away.

Data was provided by my Loan officers, Mark Kincel and Denise Harley with Countrywide Home Loans in Wichita, KS. Denise can be reached at 316-554-2839

Wichita, KS real estate update

2008-10-30T08:58:00.000-07:00

The “Old Town” entertainment district in Downtown Wichita was just voted one of the “top ten neighborhoods” for revitalizing and cleaning up polluted areas in America’s cities.

The Wichita City council has approved $25 million in industrial revenue bonds to be used to purchase the Broadview hotel in down town Wichita and completely renovate the property down to its studs. The Hotel was purchased by the Drury hotel company and will be open for one year before closing for a year to completely renovate the property.

In October, 2008, Wichita was rated by the RE/MAX-AP report on U.S. Housing as one of the very few markets where the average sales price actually rose from the same period in 2007. The report showed a 3.5% gain in average prices in the Wichita metro area. Sales activity, however, was down over 18% from the previous year. DOM was virtually the same because housing inventories dropped around 15% during the same time period.

September, 2008, Wichita MLS information

2008-10-17T08:10:00.000-07:00

Wichita, KS metro Area
Real estate report, September, 2008

Existing home sales fell 15.6% from the same period in 2007. New home sales were down 15.1%. Total existing sales dropped from 831 to 701 units. Median # of days on the market increased slightly from 27 to 39 days. Average price remained stable at $105,000. New and existing home inventories remained stable in the Wichita market compared to the large increases nationally in real estate inventory.

Mortgage rates have risen ½ to ¾% over the last month but are still in the 6 to 6.5% range.

Next year the Wichita job market is expected to grow by over 6,000 jobs. That and the high occupancy and high rates for rentals & the stabilization of the credit and financial markets should substantially increase 2009 sales over 2008 sales.

October, 2008 Economic Update for the Wichita, KS MSA

2008-10-10T12:27:00.000-07:00

October, 2008 Economic Update for the
Wichita, KS MSA

Local plane makers at the NBAA convention in Orlando Florida are continuing to see orders grow for business jets made in Wichita. This year over 70% of all new jet orders have come from over seas. Cessna Aircraft has now over 900 Cessna Citation jets in Europe and is building their second service center in Spain.

Bombardier Learjet is expanding their production facilities in Wichita and Mexico because of the introduction of the Learjet 85. Bombardier will hire almost 100 new engineers for the Wichita facility and will hire an additional 500 to 750 employees in Wichita by 2015 when the program is in full production.

Flight Safety International will add an additional 250 to 320 jobs in the Wichita area as it adds more aircraft simulators to it’s Hawker Beechcraft, Learjet and Cessna Training centers. Flight Safety trains pilots and maintenance personnel from across the world in its Wichita centers. Flight Safety employs around 450 people now.

“Good News for the Local Economy”
The annual business forecast for the Wichita area was just completed and 2009’s job growth is projected at 6,100 new jobs in Wichita. Jobs in the Aircraft sector, education and healthcare, local government and the Professional and business services will be growing. Several factors contributed to the good report: The multibillion-dollar backlog of aircraft orders will keep tens of thousands of highly paid workers on the job, the steady appreciation in the local housing market and there is plenty of credit for local businesses

The “Old Town” entertainment district in Downtown Wichita was just voted one of the “top ten neighborhoods” for revitalizing and cleaning up polluted areas in America’s cities.

The Wichita City council has approved $25 million in industrial revenue bonds to be used to purchase the Broadview hotel in down town Wichita and completely renovate the property down to its studs. The Hotel was purchased by the Drury hotel company and will be open for one year before closing for a year to completely renovate the property.

Wichita real estate conditions.

2008-09-17T09:32:00.000-07:00

Wichita's real estate market is not near as bad as other cities and states but the slowdown has difinitely reached the "Air Capital".

August closings compared to August, 2007 were down 16.5% for existing homes but volume of sales was up 5.2%. New home sales were down 27.9% according to Wichita MLS data just released. YTD sales for new homes were down 11.9%.

The median sales price of Existing homes was up in August compared to a year ago and the WSU (Wichita State University) Center for Real Estate has projected a 4% rise in home values for 2008 and a 2+% for 2009.

The Center believes that a turn around in real estate sales will take place the 2nd quarter of 2009.

Milken Institute report raking Wichita, Kansas

2008-09-11T09:35:00.000-07:00

More Good Economic News for
Wichita, Kansas, September, 2008

The Milken Institute, A think Tank from California ranked Wichita, KS the 3rd fastest improving city in the country on it’s list of “Best Performing” cities in the country. Wichita’s rank overall improved from 114th to 45th of the top 200 large city markets. The Milken report looks at cities and ranks them for creating and keeping jobs in the area.

Wichita, Kansas ranked 12th in GDP growth (wealth building) and 12th in High tech GDP growth. The Aerospace industry, with it’s huge growth and continuing job openings, helped the city in this arena.

Wichita also ranked 11th in one-year wage growth and 23rd in one-year job growth.