Wichita housing market sizzles as weather warms

Spring is a time for new beginnings, which seems to align perfectly with Wichita’s robust housing market early in 2016.

As the redbuds bloom, buyers are looking and Realtors are busy, according to Tim Holt, president of the South Central Kansas Multiple Listing Service.

“Everybody I talk to is busy,” Holt said. “Basing it on the last month and a half, the Wichita housing market is the strongest I’ve seen in years, I would say since 2007 or 2008.”

In February, area home sales fell by 2.4 percent when compared with the same month in 2015, according to listing service numbers. But industry experts paint a different picture now.

“The market is getting stronger, there’s no question about that,” said Wess Galyon, president and CEO of the Wichita Area Builders Association. “The confidence level is better, and the market is more predictable.

“It’s not at the levels that we had prior to the last recession, but I don’t know that we’ll ever get back to those levels. The dynamics in those times were different than today in terms of financing and new jobs.”

A parade of buyers

Galyon said gauging new home construction is a good market indicator because it can show how comfortable people feel in their employment and financial situation.

The association’s latest available numbers show 237 new home starts in the Wichita area through March, Galyon said, which is about a 20 percent increase from last year’s numbers through March.

In Wichita, Galyon said 121 new home starts have occurred in 2016 through March, an increase of 23 from the same period in 2015.

“Moving forward, millennials are expected to have a very significant impact on the housing market,” Galyon said. “They’re just not buying yet. Many of them are living at home or in apartments, and they like the flexibility that gives them.

“That will be the next big impact, but it’s a few years away.”

Holt said that buyers are scooping up homes at a furious pace lately, adding that waiting until the weekend to see a property could be too late.

The spring Parade of Homes – an event that showcases more than 100 new homes in the area – runs this weekend and next, just in time to take advantage of the apparent seller’s market.

“Every broker or agent I’ve talked to lately has said the same thing,” Holt said. “New construction is doing really well, too. A lot of the spec homes are getting sold before they’re even finished. It’s been a long time since that’s happened.

“Big or small, every agent out there has as much work as they can handle. Our main problem is that inventory is still low.”

Dangling carrots

Many communities were so desperate to attract people and get contractors working following the recession, they offered incentives for building new homes. Some even offered perks for buying existing homes.

As the economy has rebounded, however, several cities – Wichita, Andover and Rose Hill among them – pulled back their programs. In several other communities, certain incentives to build a home remain, offering buyers additional goodies to pair with what are often cheap interest rates.

In Maize – a city northwest of Wichita with a population of about 4,000, according to the most recent U.S. Census numbers – a program that offers a five-year city tax break for new homes in certain areas expires in 2018.

Becky Bouska, deputy city administrator for Maize, said about 400 homes that went up in the community from 2009 through 2015 were tied to the program.

“It’s really a win-win,” Bouska said. “It helps to raise our tax base, and it has kept builders in business. It’s been very good for the city.”

In 2014 alone, Bouska said more than 100 incentivized homes went up in Maize. Bouska added that the program would save a buyer close to $250 per year in taxes on a $200,000 home.

Incentive programs vary from community to community.

Bob Scott, developer of the upscale Fiddler’s Cove at Prairie Pines community in Maize, said the incentive program has been a boon.

“Ultimately, these deferred taxes by the city (of Maize) are going to pay off big,” Scott said.

“It was a big help to get the Maize community developing. I think the community is strong enough now that incentives aren’t really needed.”

Scott said the time for buyers to strike is now.

“With the interest rates as low as they are, goodness sakes alive, it’s a great time to buy a house,” Scott said.

“You can get a home loan for about 3.5 percent. Fifty years ago, I bought a house on a GI loan at 4.25 percent. We had never seen anything close to that again until the last few years.”

This story was originally published April 15, 2016 at 8:08 PM with the headline "Wichita housing market sizzles as weather warms."