Kansas home sales, values forecast higher in 2013

Associated Press Modified: October 11, 2012 at 8:00 am •  Published: October 11, 2012
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In other major Kansas cities, the report outlines a mixed recovery:

— Topeka, the state capital where ongoing budget cuts have had the most impact on employment, remains on track for a 4 percent rise in home sales this year although those sales are forecast to fall below 1 percent in 2013. Prices are stable and are expected to end next year at 2010 levels. New home construction is expected to hit the lowest level in Topeka on record next year.

— In Wichita, home to the state's aviation manufacturing industry, home sales are expected to rise by more than 7 percent this year and by another 4.2 percent next year. Prices were expected to appreciate by 1.3 percent in 2013. New home construction continues to languish, despite a program that offers property tax incentives for new home buyers, with construction permits at a record low. This situation is not expected to improve much next year.

— Manhattan's housing market is an anomaly in the state because expansion is limited by the city's boundaries — an army base, a river and a state park. Sales grew by almost 13 percent this year and are forecast to grow another 3 percent to hit a record high in 2013. New home construction should end the year up 26 percent but is anticipated to fall next year due to the limited number of desirable building lots available for sale. Home values are up 1.7 percent in 2012 with another 3.3 increase anticipated in 2013.

— Home sales in Lawrence rebounded this year by more than 13 percent and are expected to strengthen even more in 2013 with a nearly 16 percent increase. Prices have stabilized and are forecast to rise 2.1 percent next year. Construction of new homes was forecast to go up 3.1 percent, but financing constraints for new home construction are anticipated to prevent a full rebound.

Longhofer cautioned that the 2013 Kansas housing forecast does not account for major economic disruptions such as the concerns that the U.S. economy could fall off a "fiscal cliff" at the end of the year when tax increases and deep spending cuts will take effect unless Congress reaches a budget deal. A recession could follow.