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It’s called a buyer’s market, and this is how good it got last year for one such home buyer.
Susan Glenn found a seven-year-old house in Blue Springs with everything she and her husband wanted: four bedrooms, lots of windows, big backyard. It was appraised at $350,000, but it wasn’t selling. So they snapped it up for less than $270,000.
“We felt like we got a real good deal,” Susan said.
Indeed, 2007 was the year of some really good deals on housing. But it was far from good for sellers, investors or even homeowners who consider their homes an investment. For them, 2007’s housing market was, in the words of several real estate agents, “ugly,” despite another strong showing in traditional hot spots.
Each year The Kansas City Star, in cooperation with the Kansas City Regional Association of Realtors, tracks sale prices of existing homes in 94 ZIP codes across the metropolitan area. In 2007, average home prices fell in 60 percent of those metro ZIP codes. That contrasts with the go-go years of housing appreciation earlier this decade, when average home prices rose in almost all area ZIP codes.
How bad was 2007 for sellers and homeowners? Consider:
•An array of close-in suburbs — Independence, Raytown, Grandview, Gladstone, Parkville, Mission and Merriam — suffered declines in prices. Independence and Grandview, in particular, were down 10 percent.
•Some wealthier sections of Johnson County were not immune. Average resale prices fell across southern Overland Park, southern Leawood and western Lenexa.
•The hardest-hit part of the area was Kansas City’s East Side neighborhoods. There, from Northeast to Swope Parkway-Elmwood, prices plunged more than 20 percent.
Overall, the average resale price across the nine-county area declined 1 percent last year. And 2007’s downturn followed 2006’s smaller slump, resulting in a two-year slide in prices. That made it a true buyer’s market.
All these declines were caused by a three-headed monster of local and national market conditions: a weakening economy, an oversupply of newly built homes, and a collapsing subprime mortgage market leading to a rash of foreclosures typically priced below market value.
“This is probably the first time in all my years that I had to keep reducing prices until we found buyers,” said Judy J. Miller, a real estate agent with Prudential Kansas City Realty in Johnson County. “We’ve had so many banner years, I think the market was adjusting in 2007.”
A few pockets of the area bucked the trend — particularly all nine ZIP codes along the state line from the Missouri River to Interstate 435, covering areas such as downtown, Brookside and old Leawood. Among those, downtown led the way with a 13.6 percent jump in average condominium resale prices.
Over a longer period, housing appreciation has made solid gains in many parts of the area. Since 2003, according to The Star’s analysis, average home values have risen faster than the inflation rate in more than half of area ZIP codes.
“If you bought a house in 2006 and had to sell it in 2007, you’re not doing well,” said Diane Ruggiero, chief executive of the regional realtors association. “But people who’ve owned their homes for a long time are doing well.”
Good deals
Real estate agent Jane Bollin had never handled a home sale in which the buyer paid less than the seller had paid years before. Never, that is, until last year. Then it happened a few times.
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