Wayne "SHORTY" Short

Wichita, KS economic and real estate report for December, 2011

The last month and especially last week was good economic news for Wichita, KS.

The unemployment rate in November, 2011 dropped to 8.6% nationally and dropped to 7.2% for the Wichita metro area and 6.7% for Kansas. Jobless claims the middle of December, 2011 dropped to 366,000. A sustained rate of 375,000 or below shows a economic recovery in place.

Last week the average 30 year, fixed rate mortgage dropped to 3.94% matching the all time low in October, 2011.

Employment in the aircraft sector should increase significantly in early 2012, Spirit Aerospace who builds parts for every Boeing built aircraft and builds the entire fuselage-nose-tail cone of the B737 aircraft has received three record orders over the last month, 3each one breaking the record of the order before.

Emirates Airlines ordered 50 B777 aircraft November, 14; Indonesia Airlines ordered 230 Boeing planes November 18. Many of these planes were the B737 model and December 14 Southwest Airlines ordered 208 B737 aircraft plus FedEx ordered 27 new B737 freighter aircraft. Spirit Aerospace, who is now working at almost full capacity, will have to hire many workers to help Boeing Seattle keep up with this increased demand. Look for a hiring announcement after the 1^st of the year. That’s my guess!

The South Central Kansas MLS releases November, 2011 area home sales figures.

Existing home sales decreased 3.6% between October and November, 2011 according to the latest figures, but increased 2.6% on a year over year basis. The median sales price of homes sold in November decreased 2.1% compared to October and decreased 4.4% on a year over year basis. This does not mean that any one particular home decreased or increased from last year.

Existing home inventory this month decreased to 3,607 homes in inventory compared to 3,911 last month. The existing home inventory this month is 6.4% lower than a year ago when it was 3,854 units.

Months of inventory for existing homes was 7.2 months in November. A balanced market is a 3-5 month supply of homes.

Again in October, 29% of all sales were cash. 36% were conventional loans and about 20% were FHA loans.

Inventories of New homes continue to drop as builders are not replacing sold inventory and banks are reluctant to loan on spec homes. YTD inventory is down 30% and down 58% from the end of 2008.

The average price of existing homes YTD for 2011 is $124,800. The average price of new homes increased to $255, 405.

A total of 6,839 new and existing homes have sold in the 1^st 11 months of 2011 with a total of 11,753 homes being listed for sale. Average list to sales price was 95.86% with the highest list to sale price in the city being the far west side at 97.01%. The highest list to sale in Sedgwick County was the SE area including Derby.

Wichita, KS home Sales and Market Update for

September, 2011

October, 14, 2011 Stan Longhofer, the director of the WSU Center for Real Estate held a industry meeting to discuss the Wichita area Housing market. His observations were:

1: This is the time to buy given the historically low interest rates plus pricing and supply of homes in the Wichita metro area.

2: Dan Jones with Capital Federal said we will see no better time in our lifetime to own and finance a new home

3: Wichita housing market has been showing a slow but growing number of sales over the last few months.

4: The housing forecast shows 2011 sales will end up down by 1.8% but 2012 sales should rise 8.8% in Kansas. Wichita sales are projected to rise 10% in 2012.

5: New home sales will see increases in sales in 2013. Longhofer says there is a lot of pent up demand and those who don’t act in the next year will be kicking themselves for not doing it.

The full report and power point can be found by going to www.kake.com

Rose hill has announced a home buyer incentive plan.

The plan is a 5-year tax incentive for new home construction and a 10 year grant program for the purchase of existing and spec homes. New home buyers will get a 95% tax abatement for 5 years. Both programs are open till Dec. 31, 2012.

This program is similar to one announced Earlier by Maize, KS. That program gives a 100% grant toward property taxes for the 1^st 3 years. The grant then reduces in steps to 40% by the tenth year. This program is a grant for new houses in the city limits of Maize, KS.

South Central Kansas MLS September, 2011 Area Home Report

Existing home sales decreased 5.3% between August and September of this year but increased 20.9% over the same period in 2010. The median sales price is 6.3% higher on a year over year basis. Total sales for the year are down 6% from 2010.

Existing home inventory continues to drop and is 6.9% lower than a year ago.

Months of inventory for existing homes were 6 months in September, 2011. This figure is at the edge of a buyer’s to seller’s market and total new listing taken YTD for 2011 are down 11% from the year before and available listing for sale are down 8% from last year at this time..

23% of all sales in September were Cash sales, 38% were Conventional loans and 25% were FHA loans.

The average sales price of existing homes was $125,973 with sellers receiving an average of 96.2% of their last advertised price. Average days to sale for the last listing on these homes were 92 days for the entire metro area. West Wichita averaged 72 days, NE Wichita average 119 days and Butler County averaged 95 days.

New homes closed last month had an average price of $224,750. New home inventories are down 31% from the same time last year.

Wichita, KS real estate report for April, 2011

The South Central Kansas MLS reported just data for the 1^st quarter of 2011. Existing sales increased 46% from February of 2011 but were 7% behind last year's #'s. The average sales price Year to date for existing sales was $112,243. Existing homes closings for the 1^st quarter of 2011 were down 12% from a year ago and 38% below 2008 levels.

New home sales increased 17.9% over February and were 11.9% higher than a year ago. The year to date average sales price of new homes was $264,278 for the 1^st quarter of 2011.

Existing home inventory rose 3.6% from one month ago and 5% from one year ago. YTD the total homes on the market are 5% over the 1^st quarter of 2010 and 21% from 2008. The total # of new listings added to the market YTD over last year is actually down 16%. This along with increased sales should continue to shore up prices in the metro area.

New home inventory YTD is 20% below last year and about 50% below 2008 levels. Builders are not being allowed many specs by the banks and are continuing to wait on orders before building new properties.

YTD the average days on the market for existing homes was 106 days. Average sales price to list price was 95.82% of last asking price. This Number does not take into consideration any other seller concessions.

Months of Inventory is determined by dividing the number of homes on the market by the sales last month. A "Balanced Market" is considered to be 4-6 months. Months of inventory fell to 7.1 months in March compared to 10 months last month. New home inventory dropped to 12.5 month compared to 15.7 months in February, 2011. This number could dramatically drop with any serious increase in new home buyer activity.

West Wichita has 530 homes for sale and a 7.7 month supply based on sales in the 1^st quarter of 2011.

#'s for the individual zones are: SW Wichita, 265 sales and a 6.1 month supply, NW Wichita at 337 homes for sale and 6.5 months of homes, NE Wichita with 776 homes for sale and a 8.3 month supply, SE Wichita with 610 homes and a 8.7 month supply, Derby, KS with 203 homes for sale and a 6.9 month supply and finally, Andover with 153 homes on the market and a 5.2 month supply.

December, 2010, Financial and real estate update for the

Wichita, KS metro area.

Up to five Dollar General stores are being built or in the planning stages for the Wichita Market area.

Spirit shows off the 1^st composite fuselage for the Sikorsky Helicopter used by the U.S. Marine Corps. This is the first of up to 200 units to be built for the Corps. More are expected to be bought by other service branches and countries. This is a move by Spirit to not just be a supplier of aircraft parts for Boeing aircraft

Spirit Aerospace has been told to expect to ramp up production of the 737 models it builds in Wichita. Current production of 33 units a month may go as high as 41 units in the next couple of years. Spirit builds about 70% of the model for Boeing and builds parts for all other Boeing aircraft. They are expected to ramp up production for the B787 and B747x aircrafts in 20100 and 2012.

Depending on the report you read, Wichita's unemployment rate went up .2% or remained stable over the last month. Unemployment claims were stable but there were fewer employees in full time jobs. The rate was 8% to 8.4% compared to a national unemployment rate of 9.8%. The Kansas unemployment rate was 6.7% and Manhattan had the lowest rate of 5.2% I the state. The jobless recovery continues.

Retail and new car sales in November and December are up in the Wichita metro area as well as nationally. Retail sales rose for the 5^th straight month according to the U.S. Commerce department, over .8% for the month.

Long term interest rates have bottomed out and are now holding around 5% for a 30 year fixed rate mortgage.

Mulvane, KS in Summer County seems to be the big Winner for the Next Kansas State Cansino. This week the Kansas Gaming commission choose one of two sites in Mulvane (just south of Wichita) as the future home of a $220+ Million dollar facility. Work is supposed to start early next year on a temporary facility. The entire project is expected to take 4 years to complete.

A private research company said future Economic activity rose 1.1% last month. This is the fastest rise since March of 2010. 9 of the 10 measures that make up the index rose in this report.

Airbus has just come out with a report on Airliner demand and has increased their projection over the next 20 years. Demand in China and the Far East was attributed to this. Boeing continues to estimate a lesser demand but still solid growth.

22.5% of all Mortgages by Americans are more than the clients homes are worth. (A total of 10.8 million) This number has fallen for the 3^rd straight quarter. In a health market only 5% of mortgages are greater than the value of the homes.

Home prices defy predictions; remain stable, National report by RE/MAX

In recent months, the real estate market has been impacted by several outside forces that have resulted in some uncertainty. While the Tax Credit has expired and some lenders are still working their way out of a foreclosure moratorium the market is struggling to find secure footing. A monthly survey of 54 metropolitan areas indicates that sales were 4.9% below those in September and 25.9% below sales in November 2009. However, sales declines appear to be headed in the right direction, with much smaller losses than were recorded last month. Housing inventory continues a trend of single digit declines, while home prices only fell 1.7% from last year.

"While home sales usually decline in the winter months, we are seeing a larger than normal correction this winter due to several artificial factors like the expired tax credit," said Margaret Kelly, CEO of RE/MAX, LLC. "Despite predictions about falling home prices, they appear to be remaining stable with several markets reporting significant price increases over last year."

Wichita real estate sales in November were up 2 units from last month but the 509 sales were 36% less than the 801 sales in November, 2009 ( these sales were fueled by the then ending of the federal tax credit). Sales across the Midwest were down 30.6% compared to 2009 numbers. Good news: inventories are down, avg. prices are up 7.9% and it appears that hiring for jobs will increase next year which should increase home sales.

November, 2010 Housing report for the

Wichita, KS metro area.

Existing home sales declined 8.9% between September and October according to information released by the South Central Kansas MLS. 501 existing homes were sold in October with a median sales price .6% higher than the previous month but 3.2% lower than a year ago.

Existing inventory was done 5.6% from the previous month but still up 22.6% from the previous year.

Months of supply of existing inventory increased to 8.1 months. A balanced market is in the 4-5 month range.

West Wichita had 62 existing homes close plus 6 new homes. NE Wichita had 86 existing homes close plus 11 new homes.

Compared to 2007, Wichita's best sales year, residential sales are down 39%. Existing homes for sale are up 21%. In a bit of good news, Builders are continuing to get rid of excess inventory. There were only 464 homes for sale in the 5 county areas compared to 873 homes in October, 2007.

Year to date 12,189 existing homes were placed on the market with 5,941 homes closing. The average price in the metro area was $124,391 (this number has remained virtually stable), days on the market were 82 and the seller's realized 96.41 of their last asking price. This number does not take into consideration concessions paid by the seller to get the home sold.

Year to date 930 new homes have been listed with 676 sales. The average price of a new home YTD is $227,330.

28% of all homes sold in October, 2010 sold for cash. 36% sold with a conventional loan. 28% sold with an FHA loan. And 6% sold with a VA loan.

Additional Financial and employment news.

Somewhere between 3 and 5 million American will max out their 99 extended weeks of unemployment aid and fall off the roles starting in November 2010.

GDP growth: 1.7% the 2^nd quarter of 2010 and 2% the 3^rd quarter. You need 3.5% GDP growth to start cutting unemployment rates.

The Beacon's Home affordability Index is at the best rate for consumers in 40 years.

New home starts nationally are running 70% below 5 years ago and are running below rates needed to replace aging homes.

Wichita, KS is #1 in the nation in Exports as a percentage of Gross area sales. The aircraft manufacturing industry drives this number along with food & grain exports.

Nationally, Home sales are 20.6% below September, 2009 levels.

Wichita's foreclosure rate starting the 3^rd quarter of 2010 was 1.51% of outstanding mortgages. This compares to 3.2% nationally. 4.27% of Wichita area homes are at least 90 late on Mortgage payments compared to 7.79% nationally.

In 2010, over 10% of owners with mortgages have been late at least once over 30 days.

Did you know that more that ¼ of all U.S. homes are free and clear........

U.S. Household formations are at their lowest level since 1947. Between 2002 and 2007, Household formations averaged 1.3 million a year. During the last year, only 357,000 formations took place. A normal economy would produce at least 1.2 million formations.

During normal times builders need to be adding 1.7 million units to keep up with new household formations and to replace aging homes and provide 2^nd homes for those wanting them.

The sharp drop in Household formations is one reason the glut of unsold homes nationally remains high. Census data shows that 14.5% of all homes were vacant during the last census. That along with marriages declining about 20% as a percentage of population since 2000, Immigration declining plus divorces falling about 15% are other contributing factors.