A surge in the number of housing sales produced by lower home prices and government tax incentives isn't stabilizing markets in Kansas. The ailing housing markets are still deflating with few exceptions, and those that have any hope of inflating any time soon are barely moving.
Farming, manufacturing and retail are three of the largest sectors of employment in Kansas and all are suffering greatly in the financial crisis. Lay-offs in manufacturing and retail are adding to the glut of foreclosures on the market, which is having a damaging impact on the economy.
Although the midwest didn't experience double-digit rates of appreciation during the boom, markets are having difficulty adjusting to the lack of readily available financing in the financial crisis as bankers hold back on making loans except to the best of all credit worthy borrowers.
The plague of foreclosures on the Kansas City market began to erode towards the years end, but a new wave of foreclosures, projected to hit early in 2010 will have devastating consequences for the market. Home sales mainly improved from lower cost foreclosures. Adjustable rate mortgages that were resetting were the main source of foreclosed properties, but with values declining more fixed rate mortgages make up properties being foreclosed as homeowners lose confidence that the market will appreciate any time soon. Kansas City is forecast to see improving home sales in 2010, but with deflation that will average 7.8% for the year.
| City |
Forecast |
| Kansas City |
− 7.8% |
| Overland Park |
− 8.6% |
| Topeka |
− 7.4% |
| Wichita |
− 6.3% |
Nearby in Overland Park , the wave of foreclosures began to be swallowed up by eager investor buyers, but in Overland Park, which has been pinpointed as one of the best places to live in the country the sky-high prices are coming to a crash even as home sales improve. The plight of many of the new housing developments in the community is taking a financial beating as homeowners increasingly walk away from their homes. Overland Park is forecast to see average housing deflation of 8.6% in 2010.
In Wichita home sales volume has been slowed by destabilization of the jet manufacturing business. Jet orders took a dip with the recession and haven't yet made a return to the better. As a result, home sales have been off and are projected to only slightly improve in 2010 as the national economy suffers from a downturn. Wichita homes are forecast to deflate an average of 6.3% for the year.
In Topeka the market is showing stronger signs of strengthening over the coming year as unemployment improves and investors flock to the community to purchase bargain priced properties. The over-supply, however, of homes expected in the next wave of foreclosures will put pricing pressure on the rest of the market and send prices lower. Topeka is forecast to sustain deflation of a lesser 7.4% in 2010 on residential housing.
A new round of foreclosures could also produce a swarm of multiple offers on foreclosures intended by bankers to stimulate the marketplace and force home prices to rise.
