Wichita home prices mark gains
9:40:40 AM CDT - Friday, September 24, 2004
By Amy Geiszler-Jones
A number of Wichita-area homeowners have seen the value of their homes go up in the past three years, by nearly twice the rate of inflation, according to an annual area housing study done by Wichita State's Center for Real Estate.
Single-family home prices in Sedgwick County have risen at an annual rate of 4.09 percent over the past three years, 2.11 percent faster than the overall inflation rate, said Stan Longhofer, the study's author and director of the Center for Real Estate. This is the second year the center compiled the Wichita Housing Market Forecast.
The centerpiece of the forecast is a newly revised WSU Home Price Index, which showed the gains most area homeowners are seeing. The forecast also says home prices in Sedgwick County will continue to appreciate – by 2.24 percent in 2004 and 2.88 percent in 2005.
For the study, the center divided the area into six sectors and developed individual home price indices. Homes west of the Big Ditch comprise the west sector. The east sector is made up of newer neighborhoods on the far east side of Wichita. The remaining four sectors divide the older parts of the city into quadrants separated by Kellogg and Broadway.
Not all homeowners have seen high gains. East-siders have seen no real appreciation in their homes, which remain the area's most expensive. Homeowners saw a 2.63 percent gain in 2003.
The Center for Real Estate forecasts that the east sector will show the strongest appreciation in the city in the months ahead, however, with home prices increasing by 4.41 percent in 2004 and 3.51 percent in 2005.
In 2003, the fastest appreciation growth was in southwest Wichita, where home prices increased by 5.65 percent. Other areas with healthy gains were the southeast and near-west sides.
When the center released its forecast last year, it showed home prices had fallen, but that conclusion was based on some inconsistencies in data that Longhofer had been unaware of at the time. As he continued to work with the data from the Wichita Area Association of Realtors, he realized there were inconsistencies in the way home size was being measured. Through the years, Realtors had started including finished basement space in home sizes, making the homes appear bigger but having the same price. The center had interpreted that as a loss in value.
This year's index and forecast was updated using new data from the Sedgwick County Appraiser's Office.
Other highlights of this year's forecast include:
• Existing home sales in the Wichita area continue their steady track upward, topping 9,000 units in 2005.
• New home sales will slow somewhat this year, but should rise again modestly in 2005 to more than 1,800 units.
• The median sale price of existing homes will remain below $100,000 for the foreseeable future. New home sale prices, however, will continue to rise.
• At last year's construction pace, there is currently 1.4 years' supply of lots in Sedgwick County that are platted with public water, sewer and paved streets.
• The pace of new home construction will taper off in 2005 as the impact of rising interest rates, while still low by historic standards, begins to be felt in the market.
A copy of the entire 2004 Wichita Housing Market Forecast is available at http://realestate.wichita.edu.
A home price appreciation table is available at http://www.wichita.edu/my/newsresource/housingstudy.asp.