Johnson County Area Real Estate Update
We sold more homes in 09 vs 08, but many were entry level
Johnson County in general is faring better than most parts of the country, it has good budget reserves and a coveted AAA bond rating, which only 36 counties in the US boast. Wall street has confidence in JoCo due to its diverse employment base, manageable debt, and a “modest” foreclosure rate of less than 200 homes a month.
A major factor impacting Johnson County Real Estate sales has been the government tax credits. The $8,000, home buyer tax credit, which was scheduled to expire on November 30, 2009, sparked an increased demand for homes under $250,000. Anyone considering buying a home, did. This created a spike in home sales in September and October and slightly lower sales in November and December. The cold and snow also kept buyers at home. The end result was that we sold more homes in 09 than in 08, 8001 vs 7891. The total dollar volume decreased 4.95%, mainly caused by selling more, lower priced, starter homes. Kansas City area Realtors were busy.
Lastly, the data shows average sale prices are increasing. My opinion is that it is driven more by “move up” buyers, selling their starter homes and buying bigger homes, than by actual home appreciation. There are a few areas of localized appreciation, especially on starter homes Prairie Village Ranches, but I have not seen it in the overall market.
The Outlook - The $8,000 tax credit has been extended until April 30, 2010 and expanded to include higher income individuals, (up to $125k for a single person and $225k for a married couple) and there is now a $6,500 for buyers that have lived in their homes for at least 5 years and buy another home.
For most agents, January and February have been unnaturally busy. It feels like the beginning of a strong spring market. Sellers are getting their homes ready and buyers are out searching. Interest rates are incredibly low hitting 4.75% on a 30 year fixed.
The general consensus is that the Real Estate market will remain strong until April 30, 2010. After that, it will depend on employment and the economy to carry us forward. The good news is that we have companies moving into Johnson County and employment seems to be stabilizing. Also, the US GDP grew at 5.7% based on 4th quarter estimates.
Another factor are foreclosures. The data suggests that there may be a significant number coming on the market this year. Previously, most were lower priced homes, now I am hearing there are more coming in the upper brackets. This could put pressure on the local market’s appreciation rate for at least the next year. Currently, they are not a major factor in Johnson County.
