Housing market hopes to build on gains made in 2014

New-home sales should continue to climb in the Wichita area this year as homeowners look to customize and upgrade the place they call home.

“In the last three years, since 2012, we’ve climbed up every year,” said Wess Galyon, president and CEO of the Wichita Area Builders Association. “It’s not a huge increase, but the bottom line is there’s been continuous increase.”

In January, Wichita State University’s Center for Real Estate projected that the area would see 990 housing starts in 2015, a 5.3 percent increase over last year (and the biggest percentage rise of metro areas in Kansas).

Galyon said the major reason for the growth is an increase in consumer confidence, a product of more stability in the area’s job market. “People are not afraid that they’re going to lose their employment.”

Another factor is the willingness of lenders to “take a little more risk and loan to builders, so they can stand a spec home or two.”

“We’ve seen continued confidence not only on the part of the public but on the part of builders and developers in the area,” Galyon said.

Having an inventory of new homes to show potential home buyers definitely increases the possibility of sales, he said. That said, much of the work being done is in homes built to customers’ orders.

“As of late, in the last several years, there’s been an orientation more toward custom building,” Galyon said. “No. 1, it’s a sure thing” for the builder.

Wichita’s low cost of living, compared to many areas of the country, means that new homeowners “are getting a real bang for their buck,” he said. The area’s number of small builders conveys another advantage.

“Wichita is still continuing a long trend of small-volume builders. People get more value in a market like this.”

The one area in which the housing market has not recovered from the bust of nearly eight years ago is at the less-expensive end.

“Entry level is still pretty soft,” Galyon said. “It’s harder to qualify if you’ve never been a homeowner before.”

Richelle Knotts, who is in new-home sales for J.P. Weigand, echoed Galyon, saying the company “finished 2014 really strong” and sees further gains for 2015.

“The economy seems to be getting better,” she said. “The job outlook is better.”

Most new-home sales are for $250,000 and up, she said.

“I’ve got areas all over doing well – northeast, west, Bel Aire. If they’re in good locations, they’re doing well. The outskirts have been a little slow to come back, but we’re seeing a little uptick in that.”

Cherie Nies Cowgill of Nies Homes, a custom builder, said more volume means more variety in the local market, too.

“Just the newest, latest, greatest things out there,” she said of what people are looking for in their new homes. “People are wanting something new and different.”

This story was originally published February 27, 2015 at 7:00 AM with the headline "Housing market hopes to build on gains made in 2014."