What Goes Up, Must Come Down

This holds true for airliners, bubbles, the heels of people in love, and the price of homes.  And while there may be no good way of drawing a trajectory to measure the average rise and fall of the first few items, solid statistics can help us predict the course of the housing market.

Studies show that the historical long-term rate of appreciation for houses is four percent. If average prices climb above that line, at some point they will drop below it. This is known as a course correction, and is as inevitable as rain falling from a swollen cloud. In the past decade, we’ve seen housing prices outstrip the four percent rate, and then we watched as the average sank below that trend line. There’s no way of knowing if those numbers have hit bottom yet, but research indicates that there is less than a five percent chance of home prices dropping significantly below today’s average. 

The Bottom Line

Right now we’re below the trend line. At some point, whether a few months or a few years in the future, prices will rise to meet the trend line. Take into consideration the cost of home mortgages, and you can see that paying less now makes sense. Interest rates on home mortgages are far more volatile than the prices of homes. A one percent decrease on a 30-year fixed rate mortgage is the equivalent of a ten percent reduction in the home price, yet we’re 20 times more likely to see interest rates climb a single percent than we are to see a ten percent change in average home values.  Where do you want interest rates to be when you buy your next home?

A Look Backward

Here are a few comparisons that might help you determine whether owning a home is a fiscally sound investment:

• In 1989, the average price for a loaf of bread was $0.67. Today, it’s $2.78.
• Then, a gallon of gas cost $0.97. Today, it’s above $3.50
• A new car then, $15,500. A new car now, $30,000.
• In 1989, a 10% mortgage payment on a $94,000 home cost $825 per month.
• That same house today would be worth roughly $166,000. With a 4.45% interest mortgage, you’d be paying $837 per month. 

Today, you’re paying four times more for a loaf of bread, three to four times more for a gallon of gas, twice as much for a new car, and $12 per month more for your home.

Like all investments, home ownership has its risks. By studying the historical trends, you arm yourself with the knowledge to make smart decisions.

Assessing Your Assessment

Like most things in life, the current state of the housing market is a mixed bag. Historically low interest rates and affordable choices make buying easier, but today’s sellers are often getting less than they might have gotten if they had sold their home five or six years ago. For those of you who aren’t currently in the market to buy or sell, seeing a slide in your home’s value can cause your spirits to sink as well. Values may be gaining traction, as we see in the recent uptick of home appreciation in the Kansas City region, but we’ve got a ways to go before we bounce back to the highs we saw a few years ago. In the meantime, keep in mind that if your home’s value has decreased, your property assessment should too. And that’s not likely to happen without a nudge from you. If you feel your property taxes are higher than they should be, you have the right to appeal.

Mistakes on Record

Your first step is to determine whether your home’s inflated valuation is the result of an error in the historical records used by the assessor. One way to do this is to compare a recent appraisal with the assessment. Is the square footage noted on the assessment larger than the actual size of the house? Does the assessment show too many bathrooms? If so, you may have solid grounds for appeal.

How I Can Help

If you’re satisfied with the records used by the assessor but believe the assessment value is still too high, start looking at comparable houses in your neighborhood. I can help by showing you the data on nearby homes similar in size and age. If they have a lower assessed value than your home, chances are yours should too. If, however, comparable houses have been recently renovated and yours has not, this may be artificially driving up the assessed value of your home. A few photographs might support your argument.

As much as 60 percent of the nation’s taxable property may be overassessed, reports MSNBC. If you want to get a fair shake when it comes time to pay your property tax, here are the steps you need to take. 

For Johnson County:

Once you receive your official Notice of Appraised Value in March, fill out the form on back within 30 days to schedule an informal hearing. Before your hearing, make sure to gather any documentation that bolsters your claim, such as a recent appraisal, photographs of structural damage, or data on recent sales of comparable homes in your area. 

An alternative to appealing the spring notice is to wait until your tax bill arrives in the fall. If  using the Payment Under Protest method, or PUP, contact the treasurer’s office for the appropriate form. You still need to mail in your payment with the appeal form; if you present a strong case at your informal hearing, you may receive a refund on the taxes you already paid. Check the website for deadlines if an escrow agent handles your taxes.

Appraiser

913-715-9000

Treasurer

913-715-2600

For Jackson County:

Your appeal must be filed before July 9, 2012. The forms are not available online, but you may request one by calling 816-881-3309 or by visiting the Kansas City Courthouse at 415 E. 12th Street, Room 102 or the Independence Courthouse at 308 W. Kansas.

For Wyandotte County:

913-573-8400

Like Johnson County, Wyandotte County offers taxpayers the opportunity to appeal their assessment when it is mailed in March, or to file a PUP after your tax bill arrives. For forms, click here.

Kansas City: A Top Ten Destination

Moving Toward a Balanced Market

Real estate gurus like to talk about the state of the market and whether it's balanced or not. If the total number of houses for sale is low, it's considered a seller's market. Too many houses on the market? Buyers have the advantage.

Several years ago we saw the cost of houses soar, making it difficult to buy. More recently, we've experienced a surge in the number of homes on the market, which made it more difficult to sell. Now, with the housing market swinging back toward neutral, the inflated inventory of houses has begun to shrink. With sales up compared to last year, it's clear that the real estate market is on the rise.

How does a balanced market benefit me?

When we talk about a balanced market, what we're really talking about is supply and demand. If you're in search of a new home, you want to have plenty to choose from. Too many, though, and prices tend to fall, which means you'll have a tougher time getting the money you want from the sale of your current home. The way experts measure supply in the housing market is by calculating the number of homes for sale versus the number of home-buyers. With a six or seven month supply of houses, we reach that golden state of a balanced market. In November of 2010, the supply of homes in the Kansas City region jumped to nearly 10.5 months. A year later, it dropped to an even 9. If the trend continues, as experts predict, we will continue moving toward a balanced market. If you're selling your current home with the hopes of buying a new one, this levels the playing field, allowing you to both sell and buy at a fair price.

Why NOW is the Time to Buy or Sell

Common wisdom has it that spring is the best time to buy or sell a house. But in today’s topsy-turvy economy, that wisdom gets turned on its head. Bargain-basement interest rates now are just one reason you shouldn’t wait to buy or sell your home. Here are a few others.

1. Winter weather shrinks your competition pool. Most people won’t have the foresight to trump the tradition of a springtime listing. While others are waiting for their dogwoods to bloom before they put their house up for sale, you’ll be taking advantage of a leaner market. With fewer houses listed, buyers will notice yours.
2. Sell before the shadow market casts its gloom. The lag time between a homeowner defaulting on a loan and the bank foreclosing on that property is referred to as the shadow market. Indicators now point to a glut of foreclosures by early next year. By putting your house up for sale now, you’ll avoid the competition of these underpriced properties.
3. Enjoy fewer showings. We all want as many showings as possible, right? Wrong! By listing now, you eliminate disruptions from house-hunter hobbyists. Not only will you get fewer of those dreaded dinnertime calls to vacate the house for a prospective buyer’s visit, the visitors who do come to see your home will be motivated buyers. When you leave your house for a showing, you’ll know it’s for good reason. Which leads to the next reason to list now...
4. Just like people, houses look prettier when dressed up for the holidays! Whether it’s a cornucopia of gourds and pumpkins, the twined roping of fragrant pine, or the soft glow of a menorah in the window, the season’s decorations give your home an added touch of beauty that buyers will instinctively respond to.

For buyers, there are just as many compelling reasons to start your home search now, instead of waiting for winter’s thaw.

1. While the real estate market has begun showing signs of recovery, homes are still more affordable than ever before. Deflated prices combined with the best interest rates in decades mean that it now costs less to buy than to rent. This is good news not only for buyers savvy enough to strike while conditions are hot, but it also means...
2. Now is the ideal time to buy investment property. Rents are rising across the Kansas City region. With a favorable ratio of money spent on a mortgage to money earned from rent, cautious and bold investors alike are turning to real estate as a way to expand their investment portfolios. By buying now, you’ll not only reap the benefits of low prices and low interest rates, you’ll also be jumping the competition in finding renters to pay your mortgage.
3. Some things never change. Whether you’re buying a home or an investment property, real estate still offers one of the best tax deductions available.

Things to DO in Kansas City

Things to DO in Kansas City

Whether you are looking for a DATE NIGHT… or for a FUN ACTIVITY with the KIDS… you’ll find LOADS of options right here in the METRO!

FUN WITH KIDS . . . (and grown-ups, too)!

The Polar Bear Passage is now open at the Kansas City ZOO – Your opportunity to see the world’s array of animal species by enjoying a leisurely walk or a SKY HIGH safari!

WORLD’s of FUN & OCEAN’s of FUN provide the whole family with a SPLASH of fun at our local amusement park and water park.

Take me out to the BALLGAME – catch a professional baseball game or football game at the Truman Sports Complex – cheer on the Kansas City Royals & the Kansas City Chiefs!

Powell Gardens or the Overland Park Arboretum & Botanical Gardens offers events and activities for everyone looking to enjoy a little natural respite.

And… for the cultural experience – visit the Nelson-Atkins Museum or the Kemper Museum of Contemporary Art boasting ART & Architecture

Spend the DAY and the NIGHT in KC, KS – at the Great Wolf Lodge – kids love a good water park… with endless shopping nearby – PLUS the Kansas Speedway, Schlitterbahn, Sporting KC (professional SOCCER) or catch a Kansas City T-Bones Baseball game!

DATE NIGHT

Discover Kansas City culture at First Fridays Art Openings! On the FIRST FRIDAY of each month… the locals arrive to check out the latest in ART and fun people-watching J

The Country Club Plaza is known as the premier entertainment district – loaded with shops, fine dining and entertainment.

NIGHTLIFE abounds… from the Power & Light District… to Westport… to Martini Corner…OPEN late for the NIGHT OWLs!

Catch a SHOW at one of the local venues… the New Theatre Restaurant, the American Heartland Theatre, the Kansas City Repertory Theatre, the Starlight Theatre, Theatre in the Park, the Uptown Theater or the Midland… and BRAND NEW– the Kauffman Center for the Performing Arts!

Check for the latest event at the SPRINT CENTER – hosting everything from Basketball & Hockey to the hottest CONCERT tours, Circus or Cirque du Soleil!


UPCOMING EVENTS & ACTIVITIES around the METRO

• American ROYAL
  From a world class BBQ contest (9/29-10/2) to Rodeos, Horse Shows or Livestock Shows – there’s plenty TO DO at the American Royal!
• Renaissance Festival - A Step back in time
  OPEN through October 15th – Weekends ONLY
• Grunauer Oktoberfest at Crown Center (9/30-10/2/2011)
• Longview Art & World Music Festival (9/30-10/2/2011)
• Parktoberfest Flood Relief Festival (10/1/2011)
• 2011 Ciderfest – Louisburg Cider Mill (10/1-10/2/2011)
• Weston Applefest – Weston, MO (10/1-10/2/2011)
• Svensk Hyllningsfest – Lindsborg, KS (10/8/2011)
  • Take a day trip for some Swedish Culture!
• Rhythm & Ribs Jazz & Blues Festival – American Jazz Museum (10/8/2011)
• Harvest Moon American Indian Festival – Crown Center (10/15/2011)
• Weston Irish Fest (10/14-10/16/2011)
• Haunted Houses
  • Visit the West Bottoms for a scary time!