Existing home sales should rebound in 2009 as fears about the national housing market problems subside and first-time homebuyers adjust to tighter underwriting guidelines. So says the 2009 Wichita Housing Market Forecast published today by the 麻豆传媒 Center for Real Estate.
鈥淪ales of both new and existing homes have fallen sharply over the past year,鈥� said Stan Longhofer, director of the 麻豆传媒 Center for Real Estate. 鈥淏ut the inventory of homes available for sale remains fairly tight. The decline in sales appears to be driven by two factors. First, some first-time homebuyers have been squeezed out of the market as zero down payment mortgages have disappeared. More important, however, many potential buyers and sellers appear to be staying out of the market because of fears induced by reports about problems in other markets across the country. As these fears subside, home sales should begin to rise again.鈥�
Longhofer will present the forecast during the Wichita Area Association of Realtors annual meeting on Friday, Sept. 12, at the Wichita Area Association of Realtors building in the WaterWalk development. He will be available for interviews after the meeting at about 2 p.m.
The 2009 Wichita Housing Market Forecast reviews current housing market conditions in the Wichita area and forecasts housing market activity through the end of 2009. The title of this year鈥檚 forecast is 鈥淗ouse of Illusions,鈥� and it highlights how much of what is perceived about housing markets in general does not reflect the reality of Wichita鈥檚 market.
Highlights of the 2009 Wichita Housing Market Forecast include:
Existing home sales 鈭� Existing home sales in the Wichita area have fallen sharply in the first half of this year, off 15.6 percent from the first six months of 2007. In contrast to other parts of the country, however, the inventory of unsold homes remains quite low, and homes on the market are selling fairly quickly. The decline in home sales is likely the result of reduced availability of financing for first-time homebuyers and fears induced by stories about the 鈥渘ational housing market crisis.鈥�
Existing home sales should continue to fall through the first quarter of 2009, and then rise through the remainder of next year. Total existing home sales in 2008 are forecasted to be 8,537 units, down 15.7 percent from 2007. Sales in 2009 should rise by 6.5 percent, to 9,092 units.
New home sales and construction 鈭� New home sales continued to fall in the first half of 2008. Because new home construction has fallen at the same time, inventories of unsold homes remains at a relatively-low five-to-six months鈥� supply. As a result, Wichita should not experience the long-term overhang problems that will be felt in some markets across the U.S.
The pace of new home sales should stabilize in the last half of 2008. Because of declines in the first part of the year, however, total sales in 2008 are forecasted to be 1,700 units, down 6.2 percent from 2007. New home sales should be essentially flat in 2009, rising to 1,715 units.
New home construction should continue to fall until sales begin to rebound. Total single-family building permits in the Wichita area are forecasted to be 2,162 units in 2008, down 6.3 percent from 2007. Construction should fall another 8.3 percent in 2009, to 1,983 units. Construction growth will resume once sales begin to pick up again, likely in early 2010.
Home prices 鈭� Home prices in Sedgwick County continue to rise, as a stable local economy and tight inventories combine to put upward pressure on home prices. Sedgwick County home prices rose by 3.3 percent between the second quarters of 2007 and 2008. Area home prices are forecasted to rise by a total of 4.1 percent for the entire year, and then rise another 3.0 percent in 2009.
Mortgage Markets 鈥� First-time homebuyers have been squeezed over the past year as mortgage lenders have tightened their credit standards. Zero down payment mortgages have nearly disappeared from the market, and lenders have returned to more traditional income and creditworthiness guidelines. Nevertheless, mortgage rates remain relatively low, and credit is generally available to buyers with good credit and money for a down payment.
For more information and a copy of the entire 2009 Wichita Housing Market Forecast, visit the Center for Real Estate Web site at http://realestate.wichita.edu, or contact Stanley D. Longhofer, director, Center for Real Estate at (316) 978-7120 or .