After years of running too hot or too cold, the Wichita housing market is nearly back to just right.
Wichita home sales will rise 5.1 percent and home prices 3.5 percent in 2017, according to the 2017 Wichita Housing Forecast published by the Wichita State University Center for Real Estate.
Stan Longhofer, director of the center, presented the forecast Tuesday at the Kansas Association of Realtors Annual Conference and Expo at the Wichita Marriott hotel.
In Wichita, it will be the sixth straight year of growth, following the housing bubble and the housing bust.
It has taken six years for imbalances to work themselves out, Longhofer said. The last couple of pieces were still out of kilter this year.
While there has been good demand for houses, there is a dramatic shortage of houses for buyers to buy. In August, half of houses on the market sold in less than 22 days. A balanced market is closer to 180 days.
As a result, Longhofer expects prices to rise 5.8 percent this year, and slightly more than half of that next year.
People aren’t putting their houses on the market for a couple of reasons: They don’t expect to find much to buy in the Wichita market, and there are still buyers who are upside down on their homes they bought a decade ago.
“The rise in home prices should loosen that up a bit,” Longhofer said.
As their homes rise in value, more people will want to take advantage of the price increases by putting their homes on the market, and more underwater homes will rise into positive territory.
The other factor that still hasn’t recovered fully is new home construction.
New home construction will be about 900 in 2017, down slightly from 2016, but not out of the normal range, he said.
“At the end of the day, we’re still in a situation where we don’t have lot of employment growth or population growth,” Longhofer said.
“It’s not like we’re bursting at the seams from a lack of housing. It’s really that the housing we have is tied up.”
Predictions for Kansas markets in 2017
% increase in home sales
% increase in home prices
Source: Center for Real Estate, Wichita State University