KC area’s housing market was ‘ugly’ in 2007

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“I have never seen a market like this,” said Bollin, who works with Reece & Nichols in eastern Jackson County. “It’s been a great time for buyers.”

Some buyers ended up making, in real estate lingo, a steal of a deal last year. Consider:

In Independence, a 100-year-old Victorian was bought in 2004 for $30,000, then fixed up and priced at $130,000. But it sat on the market for more than a year before being snatched up for $77,200.

In Gladstone, a four-bedroom ranch went for $104,000 in 2004, was put up for sale two years later at $118,500, but ultimately was bought for $85,000.

West of the Country Club Plaza, a two-story stucco home sold for $171,500 in 2002, then recently resold for $162,000.

That home was caught up in a plague sweeping across the housing landscape — foreclosures, in which sellers defaulted on their loans and banks just wanted to get rid of the properties. The depressed price allowed Amy Rizzo, an artist, to buy her first home.

“I felt like I got an amazing deal,” Rizzo said.

No one officially keeps track of how many foreclosures filled the housing market last year. But several real estate agents across the area said foreclosures made up 10 percent to 20 percent of the homes they showed. In harder-hit urban neighborhoods, it was probably a higher percentage.

“They (foreclosures) are dragging down values a bit,” said David Van Noy Jr., an agent with Prudential Kansas City Realty.

Whether or not homes for sale last year were foreclosures, one type of real estate sign said it all: “Reduced.”

Sellers’ woes

Toward the other end of the real estate spectrum last year was Jeff North. He is a rehabber in Kansas City who hasn’t been able to sell three renovated homes. One is still sitting with $200,000 worth of upgrades he paid for.

“I’m starving,” North said. “It’s been brutal.”

The number of existing home sales was down across area ZIP codes, and some homes remained for sale for the entire year. For those sellers who did find a deal, prices were sometimes down to 2003 or 2004 levels.

Consider ZIP code 64050 covering historic, downtown Independence. The average resale price there dropped 11.5 percent last year to $72,951 — less than the area’s average price in 2003. The same thing happened in 64138 in southern Raytown and 64118 encompassing most of Gladstone.

In many other parts of the area, 2007 prices were below 2005 levels. That happened across Blue Springs, Liberty, Parkville and parts of northern and southern Overland Park.

“Part of what had been driving our market in the last few years was that lenders had gotten so lenient with their loans,” Re/Max agent Dolores Nixon said, referring to subprime and interest-only mortgages. “Those were buyers on the edge, and the edge toppled.”

In the economics of supply and demand, demand fell sharply and prices followed suit.

Actually, real estate took a beating all across the country. According to the National Association of Realtors, the median (or midpoint) price of existing homes nationwide declined last year for the first time since the Depression.

As usual with national trends, Kansas City didn’t stand out. Its housing slump last year was in the middle of the pack among similarly sized metropolitan areas.

According to the realtors association, the area performed better than St. Louis and Minneapolis, but worse than Charlotte, N.C., and Pittsburgh. Likewise, in a national index that is compiled by the federal government and tracks repeat sales of the same homes, Kansas City did better than Cincinnati and Columbus, Ohio, but worse than Nashville, Tenn., and San Antonio.

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To reach Jeffrey Spivak, call 816-234-4416 or send e-mail to jspivak@kcstar.com.