Brokers look forward to Parade of Homes

The Spring 2010 Parade of Homes kicks off today, with 182 homes ranging from $100,000 to $1.4 million.

Expectations are high, with Wichita-area sales on the uptick, fueled by first-time and repeat-buyer tax credits that are set to sunset April 30.

So while brokers expect to do some business with the monthlong parade, they're unsure what the second half of 2010 holds.

"Locally, now is a great, great time to buy a house," said Gary Schmitt, who heads the lending division of Intrust Bank. "It's springtime and people are looking. Construction costs are low on materials and labor. Some have sat on their houses longer so they're willing to negotiate. I'm not seeing a lot of steals out there. Some who might not have bought homes are doing so with the tax credit.

"But the concern I have is that by taking those folks and accelerating their purchase, does that put a hole in the market going forward?"

That was Gary Walker's original fear. Walker, the residential general manager for J.P.Weigand, said he thought last winter that his firm's entire 2010 business year would be tax-credit-driven, crammed into April, May and June closings.

That's a national concern as well, according to Colorado-based residential analyst Steve Murray of Real Trends.

In an e-mail this week, Murray said the market will inevitably retreat when the credits sunset this month — and after contracted business winds down in May and June.

"Interest rates on the 10 years (mortgages) went over 4 percent for the first time since last June (on Tuesday), so interest rates are heading higher," Murray wrote.

"Unemployment seems to have peaked, and it will be summertime. So perhaps the falloff won't be as worrisome as it was in the November-December 2009 period."

John McKenzie, president of Coldwell Banker Plaza Real Estate in Wichita, said he thinks that the worst of Wichita aviation layoffs are over and that consumer confidence should continue to increase.

"Our primary source of employment, aircraft, is showing some uptick in orders and production lines are starting to hum again," he said.

"I look for buyers to continue to search the market for good values, and I think there are plenty of opportunities for the credit-worthy borrower."

No arguments from Schmitt, but...

"Employment's not improving and our market is certainly driven by employment," he said.

"You hope people get out and look and that qualified buyers get out and buy, but the unemployment in our market and the uncertainty of the economy are going to continue to cause problems in the real estate market."

Walker said his agents are seeing a different customer.

"It's not just the people looking at the tax incentive who are out there buying," he said. "If that's the case, then the market here isn't totally driven by the tax credits. It's a good reason, I think, to be optimistic."