7/31/2010
By DAVID CLOUSTON | Salina Journal

Salina's housing market has been challenged of late, but elsewhere in Kansas, the financial challenges affecting the single-family home market have been broader and more negative.

In Emporia, there's a two- to three-year inventory of existing homes for sale, and real estate agent Jeff Williams thinks that supply will have grown larger by the end of the year.

Emporia's economy has been rocked in recent years by the loss of 1,500 jobs at the Tyson Foods beef-packing plant.

Also, another major employer, Dolly Madison bakery, saw its parent company, Interstate Bakeries Corp., file for Chapter 11 bankruptcy.

The result has been that the rate of homes either being foreclosed upon by lenders or sold for less than what the homeowners owed is inching close to 30 percent, said Williams, president of the Emporia Board of Realtors.

In the past three years, the average home price has dropped as much as 10 percent, averaging about $97,000 now, he said.

Each day, on average, for every home that sells, two to three more come on the market, Williams said. And it's harder for good customers to get a mortgage loan, with loan regulations becoming more strict, he said.

His employer, Ek Real Estate, is the city's No. 1 selling agency. Normally at this time of year there would be at least 50 single-family home sales pending, meaning homes that are under contract but not actually closed, Williams said.

"Right now, within our entire Multi-Listing Service system, which covers a five-county area, there's only 30," he said.

While the foreclosure process runs its legal course, the homes financed through national-based lenders often sit vacant, developing plumbing, mold and other problems that will have to be corrected before they can be lived in again, Williams said.

"This is going to take a few years for all of this to bleed through," he said.

In Hays, the market is far less severe, but the difficult financial times still serve to hold down sales, said real estate agent Dave Moody, past president of the Hays Board of Realtors.

He said many owners are refinancing homes they already own and others are taking advantage of low interest rates to commence remodeling projects.

Moody estimated the average sales price at about $145,000.

New homes continue to be built on the city's east and northwest edges.

"Two hundred thousand for a new one is probably low end, anymore," he said. "You can't build much for $150,000, $175,000 anymore, just due to the cost of labor and materials. And that's not even talking about the lot."

Hays currently has about 91 single-family homes on the market. A year or two ago, that was down as low as 70 or 80, but as few as eight years ago Moody remembers there were as many as 200 on the market at one time.

He said the city's home inventory is tightening.

"Something is put on the market and it's priced right, it's picked up fairly quick," he said.

He said Hays has a strong single-family home market ordinarily and prices for homes have held up. Unemployment in the city is low, due partly to the stability offered by its No. 1 employer, Fort Hays State University, and the Hays Medical Center.

n Reporter David Clouston can be reached at 822-1403 or by e-mail at dclouston@salina.com.

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