January 13, 2011 Dr. Stanley D. Longhofer WSU Center for Real Estate.

Kansas Housing Markets2011 ForecastJanuary 13, 2011

Dr. Stanley D. LonghoferWSU Center for Real Estate

Our Partnership with You

In 2008, the WSU Center for real estate entered into a partnership with the Kansas Association of Realtors® and most of your local Realtor® or MLS boards to help provide comprehensive statistics and analysis of MLS data across the state

Our Partnership with You:Statewide Housing Market Data

2007-2010: Ripple Effects

The end of the subprime era (including piggyback loans)

Layoffs and job market turmoil An explosion of foreclosure activity Record low mortgage rates (for those

who can qualify) Homebuyer tax credits (times two)

Existing Home Sales Activity

3,000

4,000

5,000

6,000

7,000

U.S

. Sal

es in

1,0

00s

10

15

20

25

30

Kan

sas

Sal

es in

1,0

00s

2006 2007 2008 2009 2010

KansasU.S.

Sources: NAR and participating Kansas REALTOR MLS systemsNote: Data are seasonally-adjusted annual rates

Existing Home Sales by Month

500

1,000

1,500

2,000

2,500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

201020092008

Source: Participating Kansas REALTOR MLS systems

Units

Existing Home Inventories

0

2

4

6

8

10

12

2008 2009 2010

U.S.Kansas

Sources: NAR and participating Kansas REALTOR MLS systemsNote: U.S. data are seasonally adjusted; Kansas data are not

Months' Supply

U.S. New Home Activity

300

600

900

1,200

1,500

1,800

2,100

U.S

. Sin

gle-

Fam

ily B

uild

ing

Per

mits

200

400

600

800

1,000

1,200

1,400

U.S

. New

Hom

e S

ales

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

SalesPermits

Source: U.S. Bureau of the CensusData are seasonally-adjusted annual rates

New Home Sales Activity

200

400

600

800

1,000

1,200

U.S

. Sal

es in

1,0

00s

0

1,000

2,000

3,000

4,000

5,000

Kan

sas

Sal

es

2006 2007 2008 2009 2010

KansasU.S.

Sources: U.S. Census Bureau and participating Kansas REALTOR MLS systemsNote: Data are seasonally-adjusted annual rates

New Home Sales by Month

50

100

150

200

250

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

201020092008

Source: Participating Kansas REALTOR MLS systems

Units

New Home Inventories

0

5

10

15

20

2008 2009 2010

U.S.Kansas

Sources: U.S. Bureau of the Census and participating Kansas REALTOR MLS systemsNote: U.S. data are seasonally adjusted; Kansas data are not

Months' Supply

New Single-Family Building Permits

0

250

500

750

1,000

1,250

1,500

1,750

U.S

. S.F

. Per

mits

in 1

,000

s

0

2

4

6

8

10

12

14

Kan

sas

S.F

. Per

mits

in 1

,000

s

2006 2007 2008 2009 2010

KansasU.S.

Source: U.S. Bureau of the CensusData are seasonally adjusted annual rates

Home Price Appreciation

-10

-5

0

5

10

15

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

KansasU.S.

Source: Federal Housing Finance Agency (FHFA)

Percent

Home Price Appreciation

100.00

120.00

140.00

160.00

180.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

KansasU.S.

Source: Federal Housing Finance Agency (FHFA)

Index: 2000q1 = 100

Kansas Home Price Appreciation

95.00

100.00

105.00

110.00

115.00

2007 2008 2009 2010

Kansas City Lawrence ManhattanTopeka Wichita

Source: Federal Housing Finance Agency (FHFA)

Index: 2007q1 = 100

What Can We Expect for 2011?

2010 was a tumultuous yearHard to tell the current in the market with all the ripples

How fast markets recover depends in large part on the rest of the economy

Real GDP Growth since 2001

-10

-5

0

5

10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Source: Bureau of Economic Analysis

Percent

Total Non-Farm Employment

125,000

130,000

135,000

140,000

145,000

U.S

. Em

ploy

men

t in

1,00

0s

1,250

1,300

1,350

1,400

1,450

Kan

sas

Em

ploy

men

t in

1,00

0s

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

KansasU.S.

Source: U.S. Bureau of Labor StatisticsData are seasonally adjusted

Unemployment Rate

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

KansasU.S.

Source: U.S. Bureau of Labor StatisticsData are seasonally adjusted

Percent

Consumer Inflation

-4

-2

0

2

4

6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Consumer InflationCore Inflation

Source: U.S. Bureau of Labor Statistics

Percent

Mortgage Rates

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

30-year Fixed Rate1-year AdjustableMBA Forecast

Sources: Freddie Mac; Mortgage Bankers Association

Percent

Kansas Forecast

2009 Actual

2010 Forecast

2011 Forecast

Total Home Sales

30,650 units-5.8%

29,600 units-3.4%

30,850 units+4.2

Building Permits

3,660 units-21.9%

3,860 units+5.5%

3,910 units+1.3%

Home Price Appreciation

-0.4% -1.1% +0.2%

Sources: Participating Kansas REALTOR® MLS Systems; U.S. Bureau of the Census; Federal Housing Finance

Agency; WSU Center for Real Estate

2011 Housing Markets Forecast

Kansas City

Lawrence

Manhattan Topeka Wichita

Sales25,050 units

+2.5%

1,430 units

+9.2%

620 units+3.3%

2,700 units

+1.1%

8,680 units+6.6%

Permits

2,100 units

+1.9%

220 units

+10.0%

190 units-5.0%

310 units

+14.8%

1,080 units+0.9%

Home Prices -1.3% -0.5% +0.8% -0.5% +1.4%Sources: Heartland MLS; Lawrence Board of

REALTORS®; Manhattan Association of REALTORS®; Topeka Area Association of REALTORS®; South Central

Kansas MLS; U.S. Bureau of the Census; City of Manhattan; Federal Housing Finance Agency; WSU

Center for Real Estate

Laying a Foundation for Real Estate in Kansas

WSU Center for Real Estate