Kansas City North Real Estate Blog

Housing Prices Likely to Turn Around in 2009?

by Charles North, Ph.D., Chris Pullig, Ph.D.,
Laura Indergard, M.B.A., Jacqueline Simpson, M.B.A. Candidate

Housing prices are likely to stop falling by the end of 2009, say nearly three-fourths of economists in a recent survey. In addition, life-cycle issues, such as needing a home, should determine when people buy homes, not investment considerations.

The online survey, conducted in July 2008 by researchers from the Keller Center at Baylor University's Hankamer School of Business, asked 840 economists their opinions on several matters related to the housing market. Topics addressed included expected future mortgage interest rates, reasons for buying and owning a home, and anticipated trends in future home prices and numbers of sales.

Housing Prices Likely to Stabilize

Since the first quarter of 2007, housing prices across the U.S. have fallen by about 6 percent. In many cities, the drop in home values has been even more dramatic. For example, from the second quarter of 2007 to the second quarter of 2008, housing prices fell by about 9-10 percent in the Orlando, Detroit, and Washington, D.C. metropolitan areas. For the same period, prices fell by about 13-14 percent in Los Angeles and Tampa/St. Petersburg, and by over 17 percent in Las Vegas and Sacramento.

Despite the dramatic decline in home prices, most of the economists surveyed expect the market to bottom out no later than next year. As Table 1 shows, almost three-fourths expect housing prices to stabilize by the end of 2009, with just under half of the respondents expecting the bottom to be reached by the end of the second quarter of 2009.

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Johnson Ridge

Johnson Ridge, “an oasis of peace and quiet,” is offering buyers some of the best lot prices for acreage in Clay County, said Carter Buschardt of Reece & Nichols.

Located just two miles north of the Kansas City city limits off of Missouri 291 and North Eastern Avenue, this growing community has it all, he said.

“We all need tranquility in this pressurized world. It’s so quiet out here you can hear a butterfly sneeze, and that’s no exaggeration,” Buschardt said. “Well, maybe a little.”

Prices for 1.1- to 1.5-acre lots are in the $70,000s and $80,000s, “and that is very close to what you’d pay for an upper-bracket postage-stamp-size lot,” he said. “The value is unmistakable.”

Johnson Ridge is a relatively new upper-bracket subdivision with homes priced from the $400,000s to $500,000s, and though technically within Smithville city limits, it is much closer to Liberty than Smithville, Buschardt said.

“We have built and maintain our own private sewer system,” said Mike Johnson, developer of Johnson Ridge. “We have five ponds right now and more are coming as we expand, and these offer serene views off the decks of many of the homes.”

Johnson Ridge is also one of the few conservation districts in Clay County, so wildlife, water features and natural grasses are abundant, as well as walking trails, several picnic areas and gazebos — with more of each planned for future development of the area.

The gently rolling hills offer “wonderful panoramic views” of the countryside, so much so, that people sometimes forget they are five minutes from the hustle and bustle of city life, Buschardt said. “We are a bit tucked away here and off the beaten path. Many people drive right past us every day and don’t even know it,” he said.

Johnson Ridge has four builders, including the Grand Award winner from the 2008 Spring Homes Tour. They will allow homebuyers the opportunity to bring in their own builders, with certain minimal restrictions. Available floor plans include reverse 1 1/2 -story and 1 1/2 -story plans. One featured home includes a see-through fireplace between the great room and the covered screened-in deck, which gives owners a chance to enjoy the outdoors on some of the warmer but still chilly winter months.

All of the homes in Johnson Ridge offer their own unique features, views and extras, Buschardt said.

Homeowners are five minutes from Liberty, 10 minutes from Kearney, 25 minutes from the sports complex, 15 minutes from Smithville Lake and 17 minutes from Kansas City International Airport.

■ Prices: Lots are priced in the $70,000s and $80,000s for 1.1 to 1.5 acres. Home prices are in the $400,000s to the $500,000s.

Silverbrooke in Kansas City North

One of the Kansas City Northlands newest communities, Silverbrooke, is ready for homebuyers to reserve a homesite. More than 20 lots have been reserved in the cul-de-sac community featuring rolling hills, scenic lakes and waterfalls.

Casa Bella Construction built the model home in the community. The 1 1/2 -story design is at 7605 N. Merrimac Ave. in Silverbrooke and will be open for touring from noon to 5 p.m. today and Sunday.

In addition to the model home under construction, several spec homes are also under way and available for viewing with a member of the Barth Real Estate team.

“It is a brand new, grand-award winning model,” said Russ Groshans of Casa Bella Construction. “This one-of-a-kind, 1 1/2 -story home features a library loft and home theater on the second floor. It also features a soaring gathering room with a two-story stone fireplace and arched wood beams.”

The model home in Silverbrooke is priced at $419,950.

John and David Barth, brothers and developers of Silverbrooke, said they have wanted to develop the Northland property since they worked in the neighboring subdivision several years ago. Prospective residents may make lot reservations in the 118-acre Silverbrooke community, while more than 20 lots have already been reserved out of an initial 70 homesites.

“We want to complement the landscape with homes specifically designed for Silverbrooke’s distinctive topography,” David Barth said.

Amenities of the neighborhood will include a decorative fountain, waterfall entrance adorned by what the developers describe as fantastic landscaping, lakes and a future pool and cabana overlooking the second lake.

Silverbrooke is in its first phase, with homes planned from $300,000 to $500,000 along cul-de-sac lots and lake lots.

“Of all the pieces of land we’ve wanted to buy, we’ve had our eyes on this the longest,” Barth said.

Other communities by Barth Development Group are Highland Meadows, Montebella, Seven Bridges and Thousand Oaks.

■ Prices: $300,000s to $500,000s.

Staley Farms Communites Brand NEW Model Homes

The models are in Shadow Woods, one of the newest neighborhoods within the Northland master-planned community of Staley Farms. The model homes builders are Koehler Building Co. Inc., Suma Design & Construction, Provence Homes Inc. and Distinctive Homes by J and K Properties Inc.

Home seekers will find the models near the three-quarter acre landscaped island fountain, which is nearing completion. Mark Simpson, who with Saul Ellis is developer for Staley Farms, said the two-tier fountain will feature an up-spray on the upper-level pond with a striking waterfall down to the lower level with sitting and picnic areas surrounding the two ponds.

Another amenity for Shadow Woods residents will be the community play park with a natural grass playfield for pick-up soccer or baseball games and an adjacent family picnic area. Homes in the first and second phases of Shadow Woods will overlook the community play park.

Shadow Woods offers 56 homesites and Simpson said about one-third have already sold. Walk-out homesites are available starting in the $60,000s and luxury homes start in the upper $300,000s.

Staley Farms residents have use of a variety of amenities throughout the community, situated around the 18-hole Staley Farms golf course. The course features 7,028 yards from the longest tees for a par of 72, featuring excellent conditioning and clever routing, according to the marketing team.

Family memories are also created daily at the 32,000-square-foot Staley Farms Golf & Country Club Clubhouse, where residents gather for community activities, private parties, banquets and weddings. Featuring five fireplaces, fine woodwork and what the marketing team described as a rustic elegance that befits a mountain lodge, the dining area offers a panoramic view of the golf course with seating on the patio that ensures a “relaxed and sumptuous experience.”

Residents of Staley Farms are social members of the golf club and enjoy access to the restaurant, the meeting rooms and special get-togethers, such as the Fourth of July celebration, adult and children’s Halloween parties, and Mother’s Day and Easter brunches.

The Sports and Recreation Club is home to a 4,000-square-foot zero-entry swimming pool with a whirlpool and a waterslide. There is a basketball court and gym, fitness center, tennis courts, sand volleyball, outdoor spa and a playground featuring equipment selected for its safety as well as its contribution to the physical development of children. Beginning in 2009, families will enjoy wildlife and wildflowers along the walking trail or a ride down the bike path that meanders along Shoal Creek Parkway.

Staley Farms is minutes from downtown and close to Zona Rosa shopping, restaurants and Kansas City International Airport.

Staley Farms includes a number of neighborhoods and offers a wide variety of price ranges and home styles, from single-family to estate homes, as well as maintenance-provided. The preferred builders are Kevin Green Homes, Premier Custom Homes Inc., Harrington Development Inc., Koehler Building Co. Inc., Walthall Building Co. Inc., Lambie-Geer Homes, C & M Builders Inc., Aristocrat Homes Inc., Suma Design & Construction, Provence Homes Inc., John Shilt Homes Inc. and Distinctive Homes by J and K Properties Inc.

Area schools offer technology-rich classrooms, the only International Baccalaureate Diploma in the Northland, an A-plus designated state program and an abundance of teachers with master’s degrees or higher. The district includes Northview Elementary School, New Mark Middle School and Oak Park High School. New this year are Staley High School and the Northland Sports Complex. The adjoining Bell Prairie Elementary School will open in 2009.

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Staley Farms

■ Prices:

$300,000s to $1 million-plus.

Top Ten Cities with Foreclosures

Kansas and Missouri did not fall into the top ten states to see the highest number of October foreclosures. But a check of August foreclosure rates shows both states saw more foreclosures than the same month in 2007. In Missouri, RealtyTrac Inc. reports 1025 foreclosures in Missouri in August, up almost 22% over August, 2007. Kansas had 341 foreclosures in August, nearly 70% higher than the same month last year. But the RealtyTrac website states that Kansas number may be higher due to data collection changes. 

James J. Saccacio, chief executive officer of RealtyTrac, said new laws requiring delays in the foreclosure process have reduced the volume of foreclosure filings in several states. In California, lenders are now required to contact borrowers at least 30 days before filing a default notice. A similar law in North Carolina gives borrowers an extra 45 days.

Here is a list of the top ten cities with foreclosures: 
1) Las Vegas, NV 
2) Cape Coral-Fort Myers, FL 
3) Miami, FL
4) Stockton, CA 
5) Merced, CA
6) Phoenix, AZ
7) Riverside-San Bernardino, CA
8) Fort Lauderdale, FL
9) Modesto, CA 
10) Orlando, FL