Checking The Pulse Of The Kansas City Real Estate Market
I’ve spoken with many upper bracket Kansas City home sellers who are holding out for a market rebound so they can sell their homes. But we just aren’t seeing signs of that happening. Most upper bracket sellers who purchased their homes in the last 5 years are faced with losing money, if nothing else then on the real estate commission, title insurance and other costs associated with selling a home. I remember back around 2005 home sellers were NOT happy if they couldn’t sell their homes 2 years after buying, make enough to cover the costs of selling AND still profit $10,000+ on the home sale.
Ah, the good old days of skyrocketing real estate appreciation. Well, those days are gone and the reality is that I don’t see home prices rebounding like the gains made back in the stock market – at least not for several years. Even though real estate isn’t what it used to be it is still one of the safest investments in our unstable economy and, eventually, Sellers will get back to earning a modest yearly appreciation on their investments. I know, I know… try telling that to the homeowners facing foreclosure. Caution is certainly advised but not getting back into real estate could be a serious mistake. Real estate has historically been one of the safest investment strategies around and since we all need a place to live, real estate will remain the investment choice of many.
In fact, a Fannie Mae survey done just this year asked Americans what they viewed as a safe investment. The results may surprise you… 70% felt putting their savings in their home was a safe investment, second only to the old favorite money markets – which 74% found safe. You may be surprised – I wasn’t – that only 17% viewed stocks as safe. Seeing as just about everyone lost 50% of their stock portfolios, that is certainly a risky place to invest.
Being an upper bracket home seller in our current real estate market can be downright nerve-racking. I didn’t have to do an in-depth study to know it’s a struggle out there. But I wanted some facts, so I decided to take a 10 year look at home prices in 10 random upper bracket home communities. I only wanted to consider subdivisions that were in existence 10 years ago and I jotted down the following subdivision names… Falcon Ridge, Nottingham By The Green, Nottingham St Andrews, Pavilions, Royse, Windsor Hills, Whitehorse, The Hills Of Ironhorse, Nottingham Forest South and Fairway Hills. Here’s the results for all these subdivisions combined into one…
Combined Average Sales Price By Year
(total number sold in parenthesis):
2000 = $421,000 (465)
2001 = $444,000 (400)
2002 = $451,000 (346)
2003 = $456,000 (362)
2004 = $478,000 (376)
2005 = $511,000 (369)
2006 = $535,000 (258)
2007 = $503,000 (150)
2008 = $478,000 (171)
2009 = $472,000 (144)
2010 (partial year) = $453,000 (41)
Even before getting to the average sale’s prices, I was caught by surprise by just how far the raw number of home sales is falling each year. There were 2/3 less sales in 2009 when compared to 2000. That’s astounding really. The average sales prices also provide an interesting look inside our real estate market over the last 10 years. Home prices continued to increase until 2006 and then began a free-fall over the next couple years. It was promising to see the average home prices held their own in 2009 (compared to 2008) but with only 144 total homes sold in these 10 Kansas City home communities, I have a feeling there’s going to be a lot more Kansas City home sellers standing pat for the time being.
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