Tag Archives: Leawood Real Estate

Getting A Home Under Contract Is Great But A Big Speed Bump Could Be Straight Ahead

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Checking The Pulse Of The Kansas City Real Estate Market

If you’re selling your home, it’s easy to get caught up in the euphoria once you get your home under contract. Same goes for home buyers. It’s understandable to feel a sense of accomplishment because you really have achieved a critical step in the real estate process. But while many sellers and buyers will already be envisioning the real estate closing, a real estate agent is focused on something much more pressing… the home inspections.

The inspection process can derail the process quicker than most people realize. That’s why we advise our sellers to hold off on the celebration until we’re through the 10 day inspection process. Our buyer’s agents advise our buyers to do the same. I’ve heard many agents over the years say they dread the inspection process because so many of their deals fall apart at that point. That surprises me because we very rarely have a deal fall apart at the inspection process. The process can be worked through methodically and a resolution achieved that is satisfactory to both buyer and seller.

The formula for success in getting through the inspection process will vary from transaction to transaction, but generally I find there’s 6 key components. The first is having a competent home inspector who is capable and willing to take the time to explain the defects put in their report. The second is having a reasonable buyer who understands that minor items can be fixed on their own. The third is having a good buyer’s agent who who will explain to the buyer that asking for trivial items could lead to winning the battle but losing the war. A buyer’s agent will also be a great resource to help a buyer locate professionals who can take care of minor issues after closing.

The fourth component is having a reasonable seller who understands a home inspector is going to look the home over with a critical eye that the buyer and buyer’s agent aren’t able to do and will uncover things that the seller had no idea was wrong with their home. The fifth competent is having a listing agent who explained to the seller that there WILL be items come up that have to be repaired. This needs explained to the seller BEFORE they sign the contract and go under contract. Otherwise the seller will now feel they are being beat down after the fact. A listing agent can also provide a seller with professionals who can handle repairs at a reasonable price.

The sixth component is having a home that’s in good condition. If the home is in terrible shape, the home inspection process could be very trying for everyone involved. Because even if a buyer limits their requested repairs to mechanical, structural, health and safety issues with the home, the list could get very long if the home is in poor condition and/or has had a lot of deferred maintenance over the years. But even those situations can be overcome in most cases and a satisfactory resolution achieved that keeps the transaction moving on towards the closing… which is what the buyer and seller really wanted when they went under contract.

Posted by Jason Brown

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Kansas Property Tax Collections Are Still Rising Despite Lower Property Values In Many Areas

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Checking The Pulse Of The Kansas City Real Estate Market

More than 1/3 of all property taxes collected in the state of Kansas come from property taxes. In 2010, property taxes accounted for 35% of the taxes collected overall by both state and local governments across Kansas. According to the KS Department of Revenue, taxes increased 94% between the late 1990’s to 2010. These taxes brought in $1.97 billion dollar in tax revenues in 1997 with that figure jumping to $3.8 billion in 2010. Check out the startling trend of rising property taxes compared to inflation rates.

Though the short-term trend in the chart shows more moderate property tax increases since 2008, the Kansas Association of Realtors is concerned that some sort of property tax reform will be required if we are to avoid a continuation of this troubling trend. Should we see a similar doubling of property taxes within the next decade or so, that trend would not benefit hopes for a housing rebound in the near future. It would certainly put more homeowner’s under water and the dream of homeownership out of reach for many more.


Posted by Jason Brown

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Kansas City Area Real Estate Market Stats: Comparing Our Current Market To 1 Year Ago

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Checking The Pulse Of The Kansas City Real Estate Market

In comparing September 2011’s market stats to September 2010, we find there’s fewer homes on the market and more homes are selling. This is great news for Kansas City homes sellers as we look to achieve a balanced real estate market not seen for several years in Kansas City. In September of 2010 there were 19,770 homes on the market, while this September that figure dropped to 17,550. In September 2010 there were 1,883 homes Sold (closed) while this September that figure improved to 2,105 homes Sold.


These figures calculate to an improvement from 10.5 months of inventory on the market last year to 8.3 months of inventory on the market this September. 5 to 7 months of inventory is considered to be a balanced real estate market, not necessarily favoring Kansas City home buyers or home sellers. Shaving off more than two months of inventory the past year goes a long way towards stabilizing home prices.

Once the glut of distressed foreclosure and short sale listings slows, the months of inventory could get back below the 7 month range. When this happens, we’ll likely be well on our way to a real estate recovery and home buyers will find it unlikely to find the great deals available in today’s market and with today’s 30-year fixed interest rates that are in the 3’s.


Posted by Jason Brown

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Will Mortgage Interest Rates Not Seen Since The 1970’s Get Kansas City Home Buyers Off The Fence?

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Checking The Pulse Of The Kansas City Real Estate Market

Mortgage rates have now hit 40 year lows but many Kansas City home buyers are remaining cautious. Freddie Mac reports that the average 30-year fixed rate loan nationally had an interest rate of 4.22 percent — mortgage rates we haven’t seen since 1971. Low mortgage interest rates allow many home buyers to get into a home with a lower monthly payment or to buy a home larger than they otherwise would have been able to purchase. Despite low mortgage interest rates that most of our parents have never even enjoyed, other economic concerns have home buyers weighing their options. 


My group has many buyers sitting on the sidelines due to an uneasy feeling about the economy, many specifically questioning whether they’ll have their job a year down the road to continue making their mortgage payments. These buyers are pre-approved for a home loan but even their increased purchasing power due to today’s low interest rates isn’t enough to get some of them off the fence.

To ensure our home buyers have the info they need to make an informed real estate decision, we go over the implications of rising or falling interest rates. A buyer who waits a year could theoretically purchase a home for 5% less (if home prices fall) but that could be completely counteracted if mortgage rates rise 0.5% during the same time. Interest rates have a powerful effect on home buyers and should always be one of the most important factors considered when buying a home a home (assuming a buyer isn’t paying cash for the home). 


Posted by Jason Brown

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Conflicting Data: Falling Number Of Home Sales, Rising Median Home Sale Prices

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Checking The Pulse Of The Kansas City Real Estate Market

The Case-Schiller 20-city real estate index – which provides data on a sampling data on our national metro area real estate markets – shows that we’re nearing an all time low in the volume of home sales. It’s interesting that while home sales fell 1%, median sales prices rose an astounding 5.8% during the same period. Despite that rise in sales prices, the decline in the volume of home sales overall has the 20-city index nearing its lowest point since November 2009. Note how this graph shows us back at 2003 levels.


It’s noteworthy that the last several years shows the real estate market has been relatively stable. The  Case-Schiller 20-city index tells us that 80% of the cities experiencing monthly increases in sales prices but annually 19 of the 20 cities experienced lower sales prices.  Home sales overall are nearing their lowest point ever and if that trend continues it’s unlikely average home sales prices will continue to buck the trend.


Posted by Jason Brown

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Mixed Signals On What To Expect With Future Kansas City Real Estate Foreclosures

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Checking The Pulse Of The Kansas City Real Estate Market

I was surprised to hear the volume of foreclosures nationally has slowed significantly. These are credible year-over-year stats as reported by RealtyTrac. Indications are that foreclosure activity has dropped 1/3 May 2011 compared to May of last year. This puts foreclosures at a four-year low. In May, about 1 in 600 homeowners received some sort of foreclosure filing, which could include a default notification, scheduling of an auction date, finalized repossession, etc. 


Still, most experts agree there’s 2 to 3 years worth of distressed property inventory to eat up across the U.S. Additionally, I’ve seen estimates that for every current REO foreclosure listing, there’s two more listings yet to hit the market. If true, that’s going to significantly impact the promising reports of falling foreclosure activity nationally. I wonder if the build-up is due more to banks having trouble getting properties ready to go on the market, banks using discretion to not flood the real estate market with more distressed properties or if a lot of its to do with lenders being forced to change how they handle the process and thus having to re-start many foreclosure proceedings.


Posted by Jason Brown

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Potential FHA Loan Changes Would Have A Drastic Effect On Kansas City Home Buyers… And Home Sellers

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Checking The Pulse Of The Kansas City Real Estate Market

Mortgage industry consultant Brian Chappelle estimates that FORTY PERCENT of home buyers would fall out of the market-place if FHA raises the minimum down payment requirement from 3.5% to 5%. I just don’t see how we can afford to implement these types of drastic changes with a real estate market – and economy – already on edge. The lack of buyer demand is already harming property values across the country and imagine what would happen if 40% of home buyers disappeared due to sweeping FHA mortgage changes.


Increasing the minimum down payment from 3.5% to 5% on a $200,000 Johnson County Kansas home, would increase the home buyer’s down payment from $7,000 to $10,000. That’s a very significant THREE THOUSAND dollars and anyone thinking the potential FHA changes would be insignificant should think again.  $3,000 is guaranteed to run many home buyers we’re working with right now out of buying home. That will mean less demand for area home sellers and we all know what that means — lower sales prices.  These changes are very likely to happen though as we work to lessen the government’s involvement in the housing market. I hope there’s someone with a good head on their shoulders suggesting they SLOWLY (incrementally?) implement these types of changes. If not, it’s going to be a bumpy ride. 


Posted by Jason Brown

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Most Believe A Real Estate Market Recovery Is At Least A Couple Of Years Away

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Checking The Pulse Of The Kansas City Real Estate Market

A collaborative report by Trulia.com and RealtyTrac.com finds that 54% of a random 2,000+ people surveyed believe the soonest the housing market will recover is 2014. Perception is reality and for more than half of the people surveyed to believe that, we’re in for a long road ahead. Just six months ago a similar poll found 34% of respondents believed the soonest the housing market would recover would be in 2014. To find that 20% more people feel this way just six months later won’t come as a surprise to many home sellers out there and the path to a successful home sale is clearly ever-changing.

Just 18% of those polled felt the real estate market would improve in 2012 or sooner. It’s possible that things can change that quickly. Truly though, I believe NO ONE can predict just how fast things may improve. Once enough home buyers start jumping back into the market (in anticipation we’re on our way up), it’s anyone’s guess how much affect that will have on home prices.  It could depend whether foreclosures are rising or falling when we get to that point and, again, NO ONE can predict the timing of that either.


Posted by Jason Brown

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A Year Of Real Estate Market Stats Covering the Entire Kansas City Metro Area

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Checking The Pulse Of The Kansas City Real Estate Market

Here’s a look at the real estate stats for the entire Kansas City metro MLS area. This includes  Johnson County Kansas, Overland Park, Olathe, Leawood, Lenexa, Shawnee, Prairie Village, Lee’s Summit, Independence, Blue Springs, Grandview, Liberty, KCK and every listing in between that reports to the MLS. The graph below is a look at the past 14 months of real estate activity. You’ll see in the light green area that there was a significant dip in the volume of homes on the market in January and February. Since that time, the spring real estate market has brought the typical jump in the number of Kansas City homes for sale. But we’re still below the volume of homes that were on the market this time last year and that’s a good sign.

We won’t compare April’s sales rate to last April’s because you can see last year’s stats were grossly inflated by the home buyer tax credit that was still in effect. Looking at just the past few months, sales in both March and April (individually) were better than and other month since the tax credit ended (with the exception of July last year).

Posted by Jason A. Brown

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Taking A Look At The National Housing Stats As We Head Into The Prime Selling Season

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Checking The Pulse Of The Kansas City Real Estate Market

My National Association or Realtors (NAR) reports that existing home sales in March rose 3.7% over February’s stats. The numbers were down 6.3% however when compared to March of last year. But we were still in the tax credit era at that time, so it’s not a real fair comparison to gauge last March against today’s real estate market. Comparing March stats to February’s however does bring better news to Kansas City home sellers as we head into the prime home selling season.


Existing home sales have in fact risen in all but 2 of the last 8 months. That’s great news. A NAR survey shows that 33% of homes purchased in March were bought by First Time Home Buyers. NAR also reports the average existing home price in March was just under $160,000 — an almost 6% drop from March of 2010 – and an astounding 40% of total sales were distressed properties, such as bank foreclosures and short sales.


Posted by Jason A. Brown

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