These homes in the Summerfield Farm subdivision are representative of the 117 houses for sale in the Louisburg school district. (Doug Carder / dcarder@miconews.com)
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Real estate on the rebound?
Developers, realtors, bankers optimistic about housing market
By Doug Carder, dcarder@miconews.com
A San Diego developer is offering a buy-one, get-one-free deal to move his housing inventory. And closer to home, a Lee’s Summit, Mo., developer is giving away a pontoon boat with every house he sells.
But no such fire sales are taking place in Miami County to liquidate housing inventory in this sluggish economy.
“We’ve seen more activity in the last six months than we’ve seen in the past year and a half,” Paola developer Charlie Smith said of his involvement in Rockwood Estates, north of the Paola Country Club, and in Hidden Meadows, a secluded, wooded subdivision to be built near Paola Middle School.
“One of the builders at Rockwood, Elite Homes, sold two spec homes as soon as they were finished,” Smith said of the homes contractors build on the speculation that a buyer will be forthcoming. “We recently sold half of the eight twin-villa lots we had at Rockwood to a Johnson County developer.”
Reservations for seven lots at Hidden Meadows fuels Smith’s optimism that Miami County may be climbing out of the housing slump that has plagued the market for the past two or three years.
“The last two or three years have been tough. Construction is the backbone of this country, and when your back is broke, it’s hard to make it,” Smith said. “But we are definitely starting to see things pick back up here in Paola, and I’m cautiously optimistic the market is going to turn around.”
While some homebuyers continue to migrate south from the Kansas City metropolitan area to Louisburg, realtor Doug Busby said that growth has slowed considerably.
“New housing starts are way off what they were a couple of years ago,” Busby said. “I don’t want to sound all doom and gloom, because I do think we have bottomed out, and I think the market will start to pick back up. But it hasn’t happened yet. Traffic is still pretty slow.”
New-housing permits issued by the Louisburg Planning and Zoning Department bear out what the Keller-Williams realtor and owner of The Busby Team is seeing. Housing starts in Louisburg stood at a dozen through May and are on pace to fall short of 30 for the year — a pale comparison to the city’s 97 housing starts in 2007, 120 in 2006 and 133 in 2005.
Busby said most of the new housing inventory has been sold off in the Louisburg USD 416 school district, which encompasses most of the eastern third of Miami County. That movement is one reason he’s optimistic the market will improve.
“Last year, about half the inventory was new homes, but that’s not the case this year,” Busby said Monday morning.
Of the 117 homes for sale in the Louisburg school district, Busby said 79 are for resale.
“I think the $4 gas is hurting everyone’s budgets, and until that straightens out, it’s going to be hard for the market to recover,” he said.
The Louisburg real estate broker said escalating gas prices may be prompting some families to sell their homes and move closer to their jobs in order to cut down on expensive commutes. “We have one couple who has said that’s their motivation for selling.”
Tired of driving in circles to make ends meet, Jaime and Lisa Watts are ready to sell their rural Louisburg property and move back to the Olathe area, a little more than a year after they migrated south to Miami County. While it wasn’t the tipping point, costly fuel prices did play a role in the couple’s desire to move closer to their jobs.
“Gas prices have gone insane, just in the short time we’ve lived here,” Lisa Watts said. “My husband and I both work in Overland Park, and higher gas prices contributed to our decision to move.”
Busby said he’s also had potential buyers who started their home search south of Louisburg, but are now looking farther north to avoid long commutes.
“I think home values are off about 12 percent from where they were two years ago,” Busby said. “It’s a good time to buy.”
But the realtor was quick to avoid painting a bleak picture.
“It’s not as good as it was two years ago, but all-in-all it hasn’t been that bad of a year,” Busby said. “I think the media makes it sound a lot worse than it is.”
Chad Lewis, assistant vice president of First Option Bank, said this region is not seeing the wild swings in the real estate market that are taking place on the East and West coasts, where housing values have plummeted up to 50 and 60 percent in some locations.
“I was reading on the Internet that a builder in San Diego was offering a buy-one, get-one-free deal to move his inventory,” said Lewis, who manages the bank’s Spring Hill branch. “The deal was if you buy a home between $1.2 million and $1.6 million, you get a $400,000 home for free.
“Now $400,000 may only buy you a 1,000-square-foot home in San Diego, but it’s still a $400,000 house. That’s crazy,” Lewis chuckled. “We haven’t seen anything like the 30-, 40- and even 50-percent drop in home values they’ve seen in some parts of the country. I’d say it’s been more like a five- to 10-percent drop in values here.”
Lewis said Spring Hill realtors have told him homes are still selling, just at a slower pace.
“The interest rate on a 15-year loan is 5.75 percent and 6.25 percent on a 30-year loan, so the rate has crept up slightly, but that’s still very attractive,” he said. “It’s definitely a buyer’s market right now.”
Lewis is optimistic housing sales will pick up in the Spring Hill area.
“We are hoping that the Gardner intermodal project will drive some growth,” he said. “Time will tell on that.”
Paola developer Smith said the subprime lending collapse and subsequent foreclosures have hurt his industry and the independent subcontractors — electricians, plumbers and other specialized workers, some of whom have shuttered their own businesses and gone to work for other companies.
“We’re battling the foreclosures right now,” Smith said. “But I’m cautiously optimistic business will pick up and it will change from a buyer’s market to a seller’s market.”
Busby also sees a boost in homes sales on the horizon.
“I really think we’re going to start to see the market stabilize,” Busby said. “But it’s not going to be a quick turnaround. I think it will take four years to get back to where we were (before the housing slump).”
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But no such fire sales are taking place in Miami County to liquidate housing inventory in this sluggish economy.
“We’ve seen more activity in the last six months than we’ve seen in the past year and a half,” Paola developer Charlie Smith said of his involvement in Rockwood Estates, north of the Paola Country Club, and in Hidden Meadows, a secluded, wooded subdivision to be built near Paola Middle School.
“One of the builders at Rockwood, Elite Homes, sold two spec homes as soon as they were finished,” Smith said of the homes contractors build on the speculation that a buyer will be forthcoming. “We recently sold half of the eight twin-villa lots we had at Rockwood to a Johnson County developer.”
Reservations for seven lots at Hidden Meadows fuels Smith’s optimism that Miami County may be climbing out of the housing slump that has plagued the market for the past two or three years.
“The last two or three years have been tough. Construction is the backbone of this country, and when your back is broke, it’s hard to make it,” Smith said. “But we are definitely starting to see things pick back up here in Paola, and I’m cautiously optimistic the market is going to turn around.”
While some homebuyers continue to migrate south from the Kansas City metropolitan area to Louisburg, realtor Doug Busby said that growth has slowed considerably.
“New housing starts are way off what they were a couple of years ago,” Busby said. “I don’t want to sound all doom and gloom, because I do think we have bottomed out, and I think the market will start to pick back up. But it hasn’t happened yet. Traffic is still pretty slow.”
New-housing permits issued by the Louisburg Planning and Zoning Department bear out what the Keller-Williams realtor and owner of The Busby Team is seeing. Housing starts in Louisburg stood at a dozen through May and are on pace to fall short of 30 for the year — a pale comparison to the city’s 97 housing starts in 2007, 120 in 2006 and 133 in 2005.
Busby said most of the new housing inventory has been sold off in the Louisburg USD 416 school district, which encompasses most of the eastern third of Miami County. That movement is one reason he’s optimistic the market will improve.
“Last year, about half the inventory was new homes, but that’s not the case this year,” Busby said Monday morning.
Of the 117 homes for sale in the Louisburg school district, Busby said 79 are for resale.
“I think the $4 gas is hurting everyone’s budgets, and until that straightens out, it’s going to be hard for the market to recover,” he said.
The Louisburg real estate broker said escalating gas prices may be prompting some families to sell their homes and move closer to their jobs in order to cut down on expensive commutes. “We have one couple who has said that’s their motivation for selling.”
Tired of driving in circles to make ends meet, Jaime and Lisa Watts are ready to sell their rural Louisburg property and move back to the Olathe area, a little more than a year after they migrated south to Miami County. While it wasn’t the tipping point, costly fuel prices did play a role in the couple’s desire to move closer to their jobs.
“Gas prices have gone insane, just in the short time we’ve lived here,” Lisa Watts said. “My husband and I both work in Overland Park, and higher gas prices contributed to our decision to move.”
Busby said he’s also had potential buyers who started their home search south of Louisburg, but are now looking farther north to avoid long commutes.
“I think home values are off about 12 percent from where they were two years ago,” Busby said. “It’s a good time to buy.”
But the realtor was quick to avoid painting a bleak picture.
“It’s not as good as it was two years ago, but all-in-all it hasn’t been that bad of a year,” Busby said. “I think the media makes it sound a lot worse than it is.”
Chad Lewis, assistant vice president of First Option Bank, said this region is not seeing the wild swings in the real estate market that are taking place on the East and West coasts, where housing values have plummeted up to 50 and 60 percent in some locations.
“I was reading on the Internet that a builder in San Diego was offering a buy-one, get-one-free deal to move his inventory,” said Lewis, who manages the bank’s Spring Hill branch. “The deal was if you buy a home between $1.2 million and $1.6 million, you get a $400,000 home for free.
“Now $400,000 may only buy you a 1,000-square-foot home in San Diego, but it’s still a $400,000 house. That’s crazy,” Lewis chuckled. “We haven’t seen anything like the 30-, 40- and even 50-percent drop in home values they’ve seen in some parts of the country. I’d say it’s been more like a five- to 10-percent drop in values here.”
Lewis said Spring Hill realtors have told him homes are still selling, just at a slower pace.
“The interest rate on a 15-year loan is 5.75 percent and 6.25 percent on a 30-year loan, so the rate has crept up slightly, but that’s still very attractive,” he said. “It’s definitely a buyer’s market right now.”
Lewis is optimistic housing sales will pick up in the Spring Hill area.
“We are hoping that the Gardner intermodal project will drive some growth,” he said. “Time will tell on that.”
Paola developer Smith said the subprime lending collapse and subsequent foreclosures have hurt his industry and the independent subcontractors — electricians, plumbers and other specialized workers, some of whom have shuttered their own businesses and gone to work for other companies.
“We’re battling the foreclosures right now,” Smith said. “But I’m cautiously optimistic business will pick up and it will change from a buyer’s market to a seller’s market.”
Busby also sees a boost in homes sales on the horizon.
“I really think we’re going to start to see the market stabilize,” Busby said. “But it’s not going to be a quick turnaround. I think it will take four years to get back to where we were (before the housing slump).”