Hopeful signs for housing market

The photo on the screen Friday at the Wichita Area Builders Association represented Wichita's housing market in 2010: one small blade of grass poking through a thick layer of ice.

That blade represents the first sign that the Wichita housing market is emerging from the recession, Stan Longhofer said Friday morning as he presented the 2010 Kansas housing forecast to about 75 people at WABA.

After the presentation, several of the players in the market agreed: Signs of a recovery are at hand, but it will be about 60 days before the 2010 picture clears.

A slow-but-steady recovery that began in January 2009 showed some momentum a year later, Longhofer told the group. As a result, he thinks Wichita area home sales will rise 5.1 percent this year, to 9,059 units — still below sales figures for 2001.

"In January, there were a lot of new listings added to the market," said Longhofer, director of Wichita State's Center for Real Estate.

"Sellers know about the tax credit, and they're now interested in selling. It represents a fundamental shift in the mentality of sellers in our market."

As a result, there's some cautious optimism among Wichita builders, suppliers and bankers.

But after winter weather that brought building and buying to a near halt, they're reluctant to proclaim 2010 the year of recovery — for about 60 days, at least.

"I think because of the weather we've had over the last four months and the fact we just finally hit 60 degrees for the first time since Nov. 28, there's going to be an opportunity for people to get back out on weekends and look at houses," said Gary Schmitt, who heads Intrust Bank's real estate lending department.

"That's going to give us a good sign whether activity will increase, or because of unemployment or consumer confidence they don't show up to buy."

Wess Galyon, WABA president and CEO, said his members are "optimistic, but in a cautious sense," about 2010.

"The feedback we're getting now is that there is an uptick in activity," Galyon said. "I do agree with Stan's numbers. Most of that is in the more-moderately-priced-range properties, and that makes sense given the tax credit that's still available. ...

"What we're doing is moving forward on an optimistic but cautious note, because we don't want to flood the markets with excess inventory."

Chris Goebel, chairman and CEO of Star Lumber, said his building materials business reflects Longhofer's forecast.

"The opportunity with the tax credit has resulted in an increase in activity, and I do think the first half of the year will be better than the second half, as Stan has shown," Goebel said. "We think 2010 will be almost a mirror image of 2009."

Goebel said he "agrees completely" with Schmitt about the importance of March and April to the short-term future of the Wichita housing market.

"We track our job folders, but if one of our contractors has several ahead that he hasn't been able to pull, we really don't know what the true numbers are going to be," he said.

"In about 60 days, then, we'll know where our spring will be, but our numbers thus far are tracking very similar to what Dr. Longhofer has said — a better first half."