Wichita area home sales will rebound in 2011 after the effect of the homebuyer tax credits wears off, according to the 2011 Kansas Housing Markets Forecast released today by the Center for Real Estate at Wichita State University.
Local sales will rise by 6.6 percent in 2011, while new home construction activity will remain relatively flat, rising by 0.9 percent, said Stan Longhofer, director of the Center for Real Estate.
"One of the things we've seen is an extended hangover following the expiration of the tax credit in most markets across the state," Longhofer said.
"As a whole, home sales across the state appear on pace below 2009 figures, but we think we see the bottoming out of that; 2010 will be down a little bit, but we think there will begin a slow but measurable recovery in 2011."
That is, if aviation cooperates.
"Even if Hawker leaves quickly, the impact on our housing market depends on the individual choices of employees," Longhofer said.
"Do they move with the company? If so, that likely translates into an increase in home sales and depresses home prices. But if people decide Hawker's going and I'm staying, it will depress sales figures...."
Longhofer's forecast will be unveiled at 8:15 a.m. today at the Wichita Marriott. Its title is "Ripple Effects," reflecting how the tax credits forced much of 2010's home sales into the first six months of the year.
The study also includes a look at Kansas and several other areas, including Kansas City, Lawrence, Manhattan and Topeka.
Here are some highlights from the study:
* Wichita: Total sales will decline by 5.5 percent in 2010 to 8,140 units before rising in 2011 to 8,680 units.
New home construction will end 2010 down 14.8 percent before stabilizing next year with the slight increase. Home prices will be flat in 2010 before rising 1.4 percent next year.
* Kansas: Sales should end this year down 3.4 percent at 29,600 units before rebounding next year, up 4.2 percent to 30,850 units.
New home construction should rise 5.5 percent this year to 3,860 units, then rise more slowly next year to 3,910 units. Prices will end this year down 1.1 percent and then remain flat next year.
* Kansas City: Home sales will end the year down 5.1 percent at 24,450 units before rebounding by 2.5 percent next year to 25,050 units.
New home construction has bottomed out, with single-family permits increasing by 7.9 percent this year to 2,060 units. Permits should rise next year to 2,100 units. Home prices are stabilizing, but should fall by 2.2 percent this year and another 1.3 percent in 2011.
* Lawrence: Home sales will rise 4.6 percent this year to 1,310 units, accelerating next year by 9.2 percent to 1,430 units.
New home construction also is on the rebound, with single-family permits up 7 percent this year to 200 units, followed by a 10 percent increase next year to 220 units. Home prices, though, will end the year down 3 percent before stabilizing next year, down 0.5 percent.
* Manhattan: Home sales will remain unchanged this year at 600 units. Sales should rise 3.3 percent next year to 620 units.
New home construction has risen sharply this year, up 11.7 percent to 200 units. It should drop off slightly in 2011, down 5 percent to 190 units. Prices rose at a 6.8 percent rate during the first seven years of the past decade before flattening.
* Topeka: Home sales will end 2010 up 2 percent to 2,670 units. Sales should rise about 1.1 percent next year, to 2,700 units.
New home construction activity will continue to decline this year, dropping to 270 units before bouncing back next year to 310 units. Home prices will remain basically flat.