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

Curacao, Chongqing, Bay of Bundy...Kansas City. 

Yes, that’s our town ranked by Frommer’s as a Top Ten Destination of 2012. As the only American city among a roster of decidedly exotic names--Fukuoka, Girona, and Ghana all made the list--we’re getting some much-deserved attention as a go-to spot for world travelers in search of culture. Citing the Kauffman Center, the one-of-a-kind National World War I Museum and the Bloch Building of the Nelson-Atkins, the prestigious travel guide gave kudos to Kansas City’s flourishing artistic and cultural scene.  That will come as no surprise to Kansas Citians, who have long enjoyed a life rich in the arts. From the Fringe Festival to Firewater, there’s something here to please everyone, visitors and locals alike. 

Now it turns out our fair city is getting a reputation for its culinary scene as well. On a recent episode of The Today Show, t.v.’s Top Chef Master judge and editor-in-chief of Saveur, James Oseland, proclaimed Kansas City the next great culinary destination of 2012. “Its high-end dining is on the rise,” he said. Giving a nod to Chef Debbie Gold’s American Restaurant, Oseland touted our area’s burgeoning fine-food scene. Restaurants like Julian in Brookside and Bluestem in Overland Park now share the limelight once reserved for Kansas City’s traditional favorites, the barbeque joints. Here’s a sampling of a few other restaurants that may whet your appetite:

Extra Virgin.  Helmed by James Beard Award Winning Chef Michael Smith, Extra Virgin is the companion restaurant to the more formal Michael Smith Restaurant next door. Serving southern-european style tapas in a lively setting at 1900 Main Street in the Crossroads District.

Blue Bird Bistro.  For upscale but affordable organic fare, head to this cozy Westside locale. Owner Jane Zieha has been serving locally-grown food since opening her doors eleven years ago. Located at 1700 Summit Street.

Tatsu’s French Restaurant. A genteel restaurant in an unprepossessing strip mall, Tatsu’s has been serving classic French fare since the early 80s. Located at 4603 W. 90th Street in Prairie Village.

The Rieger Hotel Grill and Exchange. The menu may feature sophisticated French and Italian dishes, but the atmosphere is anything but stuffy in this River Market eatery. Owners Howard Hanna and Ryan Maybee state their bold but simple mission on a wall of the restaurant: “beautiful food for the people.” Located at 1924 Main Street.

Justus Drugstore. Area fans of this Smithville restaurant deem it worth the 20-mile drive from downtown Kansas City. Recently hailed as a “destination restaurant” by Time Magazine, owner Jonathan Justus serves food made from scratch in a former pharmacy run by his parents. Located at 106 W. Main Street, Smithville, MO. 

Story. Fresh, local ingredients are the main characters in this Prairie Village eatery. Chef Carl Thorne-Thomsen parlayed a creative bent for writing fiction into cooking up edible masterpieces. Located at 3931 W. 69th Terrace.

Vote for Your Favorite Local Hotspots!

Click on this link and let me know your favorite places for culture and cuisine in Kansas City:

http://www.surveymonkey.com/s/3D989QL