Hands On The Heartland
Checking The Pulse Of The Kansas City Real Estate Market

Late this summer it was good to see the Case-Shiller national index report a month of rising home prices. But when that was followed up with another month of rising home prices, I was as giddy as a school girl. When it happened again we had an official housing winning streak that had me ready to party like it’s 2005. Doesn’t have the same ring as Prince, does it?  In all seriousness, I took a step back and wondered how long it had been since we’d had a housing winning streak. Whether a fluke, a bail-out based rebound, tax credit based rebound or otherwise, it was good to see. The next question is will it last? I’m betting we do make it four months in a row but after that things could get interesting. The $8,000 tax credit expires December 1st and what happens to homes sales and home prices after that is anyone’s guess. I’m cautiously optimistic a rebound will continue but we must also consider that we’re about to head into the traditionally slowest time of year for real estate sales.

S&P Case-Shiller

Supporting a continue rebound could be the low 15-year and 30-year mortgage rates that we’re seeing, which are both at or near all-time lows. I read the other day that 15-year mortgage rates were at an ALL-TIME low and that the average 15-year fixed rate was below 4.5%! That’s so attractive it has me thinking about refinancing again. Be sure to take a close look at the graph above (courtesy of Standard & Poors Case-Shiller) as there are several noteworthy items. First of all, you can see home prices peaked in 2005. I’ve heard many in the industry still stating that we’ve dropped back to 2005 home prices but the fact is, 2005 was the last year we saw INCREASES. We’ve actually dropped back to 2002 home prices nationally. Do keep in mind this is a national average based on what the S&P Case-Shiller determines to be the 20 most noteworthy markets in the country to track (Kansas City isn’t one of those 20 cities). It also just so happens that Kansas City didn’t see the huge increases in the boom, so our bust is smaller (no pun intended) here in Kansas City, than in California for example (OK, pun intended). Of course, also note the right side of the graph showing the past three months of increasing home pricing. Here’s to a fourth one.

Posted by Jason A. Brown

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