Tag Archives: Leawood Real Estate

National Home Prices Take Huge Dip Back To 2002 Levels

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Checking The Pulse Of The Kansas City Real Estate Market

The U.S. accused Saddam Hussein of developing chemical, biological and nuclear weapons. An arrest was made in the D.C. sniper gun attacks. Enron happened. That was a long time ago… 9 years to be exact. And the value of the average U.S. home today is now equivalent to the average home price at the time of those events, according to the S&P/Case-Shiller price index. The downward trend is likely to continue until the volume of new foreclosure listings slows. Nearly 40% of U.S. homes sold last month were foreclosures or Short Sales (upside down homeowners praying their lender will accept a payoff lower than the borrower’s loan amount).


The conditions present today make it tough for many typical home sellers to catch a break. Some sellers become nervous when their homes don’t sell quickly. Many will make a knee-jerk reaction to drastically lower their prices as they work to gain market acceptance. This erodes values of surrounding homes and becomes a vicious cycle in some cases. To break the cycle, I believe we’re going to need an extended run of positive economic news (should create more buyer demand in the market) and a sizable reduction in the volume of foreclosure listings hitting the market (less supply of distressed homes will increase the demand for typical resale homes).

Some people predict we’ll never again see the real estate appreciation rates we saw for years in our country. While that may be true, to say that the housing market isn’t going to rebound would be bucking history.  Real estate has always rebounded and the pride of homeownership is one of the things that makes our country great. I am amazed when I hear the occasional person say that it’s crazy to own a home. I always tell them, someone is going to own the home they live in. Would they rather it be a landlord making the decisions for them the rest of their lives? I’ve yet to hear a plausible response to the question.  Real estate is also a LOCAL phenomena and the numbers reported nationally are drug down drastically by the real estate bubbles that burst in portions of California, Florida, Colorado and Arizona.


Posted by Jason A. Brown

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Kansas City Mortgage Interest Rates Fall For Third Straight Week

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Checking The Pulse Of The Kansas City Real Estate Market

Mortgage rates were inching higher around the new year but we’ve seen them in a downward trend recently and have actually seen rates drop for a third consecutive week. This is an amazing benefit to buying in today’s real estate market and it’s likely 20 years from now we’ll look back in amazement on the interests rates some of us were able to secure. If you’re considering buying a home, the average national 30-year fixed interest is hovering around 4.75%. Most experts believe interest rates will hold steady for at least the next few weeks.

This week I’ve received notifications from Bank of America advertising 30-year fixed rates at 4.625% and from Wells Fargo advertising 4.875%. Mortgage rates with most lenders change daily and some even update their quoted rates twice a day. So take any interest rate quote you see with a grain of salt because they probably will have changed – possibly up or down – by the time you contact the lender. When buying a home, contact your lender and lock in your rate. If you have a contract, you can lock in the current interest rate for free. If you’re just starting the Kansas City home buying process, you can often pay around $150 to lock in the current interest rate for 60 days. Once you’ve locked in your interest rate, it doesn’t matter if interest goes up during the lock period, because your rate is guaranteed.

Posted by Jason A. Brown

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Leawood Kansas Real Estate Update – February 2011

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Checking The Pulse Of The Kansas City Real Estate Market
Real Estate Info for The City of Leawood Kansas
Recent 15 Days of Leawood KS Market Activity

After calculating the absorption rate during the past 15 days in Leawood Kansas, I find there’s currently 15.8 months of real estate inventory on the market. This is very high, as you’d expect with only 9 total homes Sold (closed) in the past 15 days in the city of Leawood. The number of homes that went under contract over the same period was just slightly better. The homes that sold took more than 7 months to do so.

Type

#

Average $

Avg DOM

Listings Past 15 Days

 28 $515,579

–

Total Active Listings

 285

–

–

Newest Contracts Written

 11 $416,555 169

Newest Sold (Closed)

 9 $400,050 215

* The Average $ of Newest Contracts considers the price the homes were listed at when they went under contract. Data pulled from Heartland MLS and deemed reliable but not guaranteed. Low samplings in any category can skew results. Stats may not be an exact 15 days from date of this post. DOM = Days On Market.

It’s noteworthy that the 28 homes that came on the market the past 15 days were listed more than $100,000 higher on average than the 9 homes that sold over the same period. Analyzing absorption rates, months of inventory and sales prices helps our clients better understand the prevalent market conditions. If your real estate objectives involve buying or selling a home in Leawood or the surrounding area, please contact me to discuss your buying or selling situation.

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Town Center Plaza In Leawood Kansas
Posted by Jason A. Brown

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Any Way You Slice It, Shadow Inventory Will Have A Lingering Effect On Kansas City Real Estate Values

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Checking The Pulse Of The Kansas City Real Estate Market

If you’re not familiar with the term Shadow Inventory, it means homes that are NOT on the market but will be in the near future. This includes bank owned properties that are not yet listed but also includes homes where the owners are significantly behind on payments — and that are likely to be bank-owned properties in the near future. At the slow sales pace being seen nationally, the Wall Street Journal has done some analysis and found there’s more than EIGHT YEARS of Shadow Inventory to be absorbed.


That number is staggering. Of course, it calculates matters using current sales rates. But even if home sales DOUBLED over, say, the next six months, that would reduce the Shadow Inventory to FOUR YEARS. Taking this painful excercise a step further, home sales would need to octuple to get it down to just ONE YEAR of REO shadow inventory we’re faced with today.

A high amount of Shadow Inventory leads to lower prices on bank properties as banks look to move them. Lower prices on bank properties bring down values of the stable homes in a community. That hurts even more homeowners and causes otherwise solid borrowers to be upside down on their homes. This leads to more Short Sales, which are half as bad for a community as a foreclosure but hurtful none-the-less. This leads to lower sales prices for solid borrowers in the area. Which leads to… me being depressed discussing Shadow Inventory.

Now you could also run with Standard & Poor’s estimate that there’s “just” four years of Shadow inventory on the market. Or, if your cup is half full, you could trust that my National Association of Realtors is correct with its assessment that only two percent of the nations properties should be considered Shadow Inventory.


Posted by Jason A. Brown

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December’s Real Estate Stats Indicate Home Sale Prices Are Increasing In The State Of Kansas

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Checking The Pulse Of The Kansas City Real Estate Market

The Kansas Association of Realtors (KAR) report for December indicates the real estate market in the state of Kansas is stabilizing. After seeing five consecutive months of declining numbers, the number of homes sold (closed) in December 2010 was virtually identical to the number of sales in December of 2009.  This is even more impressive when you consider the previous year’s stats were compiled while we were still in the midst of the home buyer tax credit. The Kansas figures were also much better than the average national stats, which saw the volume of home sales drop 2.9% in December.

The amount of inventory on the market in Kansas stood at 8.8 months in December. In this case, the months of inventory was calculated using the number of December home sales and dividing that figure into the number of homes for sale when the report came out. Just as promising, the average sales in Kansas rose from $151,952 in December 2009 to $158,628 this December. That’s a very significant jump.

Looking closely at our local market, in Johnson County Kansas 521 homes were sold (closed) in  December. This was up from the 460 homes that sold in Johnson County in December 2009. Comparing this December’s sales rate to the amount of inventory  currently on the market indicates there’s 6.6 months of inventory on the market. This amount of inventory indicates a stable real estate market in Johnson County Kansas.

Posted by Jason A. Brown

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Comparing Real Estate Markets From Kansas City To Overland Park To Olathe…

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Checking The Pulse Of The Kansas City Real Estate Market

Many major real estate markets that I keep tabs on are in a buyer’s market. But a few market’s are still in what the “experts” consider a stable market. Most experts generally agree that a buyer’s market is when there’s between 5 to 7 months of inventory on the market. Less than  5 months of inventory is a Seller’s market and more than 7 months of inventory is a buyer’s market.

I usually take a snap shot look at one city or one subdivision at a time, so today I thought it would be interesting to take a look at several of our major metro cities for comparison purposes. The following chart uses the absorption rate over the past 6 months in each city to calculate the months of inventory. As expected, Overland Park is seeing a “stable” real estate market and is followed closely by Prairie Village Kansas and Olathe Kansas…

City

Active Listings

Months of Inventory
Overland Park KS 1,081 5.7
Prairie Village KS 183 6.2
Olathe KS 933 6.5
Shawnee KS 390 7.1
Leawood KS 321 7.2
Lenexa KS 297 7.6
Lee’s Summit MO 832 8.3
Kansas City MO 5,176 9.0

Posted by Jason A. Brown

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I PITI The Fool Who Doesn’t Know What This Acronym Means When Buying A Home

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Checking The Pulse Of The Kansas City Real Estate Market

When getting Pre-Approved for a home loan, there’s more to the process than just rushing to get the Pre-Approval Letter in hand. Yes, that letter tells you the lender is willing to give you a loan.  But what it doesn’t tell you is how much your monthly mortgage payments are going to be. And, if you ask me, that’s the most important aspect of getting Pre-Approved. Of course closing costs are very important too, but it’s the monthly payments that you could be faced with making for 5, 10, 15 years…

So be sure you consider each component that makes up your monthly mortgage payment. PITI is an easy acronym to remember for the four core aspects of a monthly mortgage payment. They stand for Principal, Interest, Taxes and Insurance. The Principal is the portion of each monthly payment that’s being deducted off the total amount you still own on the home. In other words, if you’re selling your home later and $5,000 of your monthly payments over the years have gone towards principal, that’s $5,000 in equity you’ve built up by way of your monthly payments.

The next aspect is Interest. We all know what this is. It’s how the lender profits by loaning you the money to buy the home. If the principal and interest portion of your monthly mortgage payment is $1,000 per month, possibly $950 of each payment is going to interest. This is certainly the case in the first several years of a mortgage loan because mortgage loans have the earliest payments front loaded with interest.  This is how mortgage loans have been done for decades and essentially your monthly mortgage payments are being recalculated each month based on the new loan balance (after taking your previous month’s payment into consideration). In case you’re wondering at what point would the principal pay-down portion of a monthly mortgage payment equal the interest portion, I belive it’s somewhere around year 20 on a 30 year mortgage loan.

The next aspect is Insurance. By insurance we mean Homeowner’s Insurance – a.k.a. Hazard Insurance. If you’re home burns down, Homeowner’s Insurance is what’s going to rebuild the home. Why do lenders require this be included in your monthly payments (if you have less than a 20% down payment)?  Well, for a buyer who has just a 5% down payment, it would mean the bank actually “owns” 95% of the risk in your home. So, if it burns down, the borrower lost 5% of the asset but the lender would be losing 95%! If a borrower has more than a 20% down payment, most lenders feel the borrower has such a big interest in making sure the home has insurance in place that they don’t require it be included in the borrower’s monthly mortgage payments.

The next aspect of the mortgage payment is Taxes. By taxes we mean County Property Taxes.  Your lender doesn’t want a lien placed on your home by the government in the event you don’t stay current on your property taxes. So, if you have less than a 20% down payment, the lender will collect your property taxes in your monthly payment. This portion of your monthly payments goes into an escrow account so the money is there when the property taxes actually come due.  This is important to the lender because if they have to foreclose on you in the future, they won’t have to worry about the government standing ahead of them in line with an interest in the property.

But wait… there’s more. Although PITI are the four main aspects of a monthly mortgage payment, if you have less than a 20% down payment you can also expect to add a fifth critical item to the equation — Mortgage Insurance. Borrowers with less than a 20% down payment are considered higher risk loans. To cover this risk, lenders will require the borrower to pay for Mortgage Insurance, which means the borrower is paying for insurance that guards against possible losses the lender might incur from the borrower defaulting on the loan. Also, some condo and townhome association dues are collected as part of the borrower’s monthly mortgage payment, thus adding a sixth component to the monthly mortgage payment for some borrowers.


Posted by Jason A. Brown

Leawood Kansas Real Estate Update – March 2010

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Checking The Pulse Of The Kansas City Real Estate Market
Real Estate Info for The City of Leawood KS
Recent 15 Days of Leawood Kansas Market Activity

Using the past 15 days of market stats to figure the absorption rate in Leawood Kansas, there’s 4.9 months of inventory currently on the market. This is the best I can recall seeing in the city of Leawood in more than a year. An average of 60+ closings per months really is an excellent rate over the past couple of weeks. Keep in mind this just a snap shot of Leawood Kansas activity. Also, although the months of inventory is a good sign, the average sale price were seeing ($374,606) is well off the pace of what recent sellers are hoping to get out of their homes in Leawood ($423,577). The average sales price of the homes that went under contract during the past 15 days is solid and very close to the sales price of the 51 homes that recently came on the market.

Type
#
Average $
Avg DOM
Listings Past 15 Days
 51 $423,577
–
Total Active Listings
 307
–
–
Newest Contracts Written
 25 $429,636 162
Newest Sold (Closed)
 31 $374,606 84

* The Average $ of Newest Contracts considers the price the homes were listed at when they went under contract. Data pulled from Heartland MLS and deemed reliable but not guaranteed. Low samplings in any category can skew results. Stats may not be an exact 15 days from date of this post. DOM = Days On Market.

If you’re considering selling or buying a home in Leawood Kansas, you’ll need more than just 15 days of market stats.  You’ll want 6 months or more worth of stats and you’ll want them on the community that interests you most.  As your local Leawood Kansas Realtor, I look forward to assisting you.

View Past Real Estate Stats On Leawood Kansas

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Johnson County Library In The City Of Leawood KS

Posted by Jason A. Brown