Study: Local home prices will start to inch back up

Home prices in Wichita have bottomed out and are on the way back up, according to a study released this month by the National Association of Realtors.

But a local analyst cautions that home price appreciation is going to be minimal at best in 2011 in the Wichita market, which is flooded with inventory.

And early sales results bear that out, with January sales and inventory figures flat, according to the South Central Kansas Multiple Listing Service and the Wichita Area Association of Realtors.

The median price of an existing single-family home in the Wichita area bottomed out at $114,600 in the third quarter of 2009 before ending the year at $117,800, the NAR reports.

That puts Wichita in the middle of what the NAR calls a fourth-quarter rebound in home sales in 49 states.

According to the NAR, 78 metro areas, or about half of the markets the national advocacy group studies, saw home prices rise from a year ago.

Lawrence Yun, the NAR's chief economist, said the stabilizing price trends are encouraging.

"Home sales clearly recovered in the latter part of 2010 and are helping to absorb the inventory, including many distressed properties," he said in a statement.

"Even with foreclosures continuing to enter the inventory pipeline, they've been selling well and housing supplies have trended down."

But Stan Longhofer, director of Wichita State's Center for Real Estate, said he's sticking by his forecast of last fall — little or no home appreciation in 2011.

"While median prices are true measures of price appreciation over the long term, they're not as correlated over the short term," he said. "My expectation for 2011 is that home prices will be flat to a modest decline."

Longhofer said the area's new and existing home inventories remain high at about 10 months of supply, four months higher than when the recession began in the fall of 2008, indicating that the pressure to sell remains high in the area.

In January, new- and existing-home inventory remained almost static at 4,213, up six from December but up 269 from January 2010.

A total of 344 houses were sold last month, down two from the 346 sold in January 2010 and down 246 from the 590 sold in December.

New-home sales dropped to 31 units in January; 313 existing homes were sold.

Many local brokers think that February sales figures will be even worse, driven downward by two snowstorms in the first half of the month.