A National Association of Realtors study underscores a longtime local theme: Home ownership in Wichita is a can't-lose financial proposition if you hold onto the home for at least five years.
NAR's third annual Metro Area Housing Equity Report shows the first effects of the housing bubble on short-term homeowners, particularly on the coasts, said NAR economist Danielle Hale.
But it also shows that longer-term owners survive any economic blips and still accumulate significant equity in their homes.
In Wichita, equity accumulation is even more significant thanks to steady home price appreciation and the lack of speculators in the market, said Stan Longhofer, director of Wichita State's Center for Real Estate.
Here are the study's purchase dates and estimated equity accumulated by 2009 in Wichita:
* 2004 — $22,395
* 1999 — $39,837
* 1994 — $62,003
* 1989 — $77,769
Contrast that to Arizona, Hale said, where short-term owners have lost thousands off the purchase price of their homes as the market collapsed.
"We see Wichita as very typical of the middle of the country, but you have seen prices come down slightly, maybe 3 to 4 percent," Hale said.
"You didn't have the big run-up that the coasts had, though, so what the report shows is that people who live five, 10, 15 and 20 years in a home will still manage to build up a substantial amount of equity."
Hale's study is built on several assumptions: 100 percent financing for the home, no home equity loans, and a 30-year fixed-rate mortgage.
The bottom line in Wichita: Live in a home you buy for five to seven years, and you're going to make money, Longhofer said.
But live there because it's your home, not because you love the house as an investment.
"Home ownership in Wichita isn't a very risky proposition," Longhofer said. "If you can hold onto the home long enough to offset your transaction costs, you'll make money.
"If your goal, though, is earning a return on your investment, then focus that independently of where you live.
"Once you've made your living decision, then you do have a question of the potential risk on the back end and the answer in Wichita is that if you hold onto your home long enough, generally five years or more, you're going to make money."