It’s hard to flip open a newspaper or visit an on-line news Web site without hearing something related to the housing market and mortgage issues — and most of the news doesn’t seem too encouraging.


This story first appeared in the Nov. 22 edition of the Kansan.

It’s hard to flip open a newspaper or visit an on-line news Web site without hearing something related to the housing market and mortgage issues — and most of the news doesn’t seem too encouraging.

But despite the national outlook, some are more optimistic about the Newton housing market and all its facets.

Connie Vajnar, a real estate agent and co-owner of Realty Connections in Newton, said the Newton area may be seeing a few effects of the national economy, but overall, it’s still looking good for the local housing market.

“I think describing the market as slower but steady is a good way to describe what is happening in the Newton area,” Vajnar said. “The market is typically slower at this time of year with the holiday season and changes in the weather coming.”

And while the number of sellers has been declining, Vajnar said people in the Newton area still are buying homes.

“I know the numbers are down somewhat from last year, but with all that is happening in the economy, we have still had a good market to work with,” she said.

Home sales

and builds

So far this year, 273 real estate transactions have occurred in Newton and North Newton, and there were 111 active listings and 31 listings pending/under contract as of Nov. 1, according to statistics compiled by the South Central Kansas Multiple Listing Service Inc.

Of those, five were in North Newton, 51 were in the two northern quadrants of Newton, and 86 were in the southern two quadrants of Newton.

Arlen Newell of Coldwell Banker said during the past four years, the Newton market typically has had about 140 to 150 active listings at any given point.

Some of the pending listings may be new builds that are not yet completed, Newell said.

At the same point last year, there had been 312 transactions, translating to a 12.5 percent drop this year. Arlen Newell of Coldwell Banker, Stucky and Associates in Newton, said he expects the year to wrap up with about a 10 percent sales drop.

But he also noted compared to many markets across the country, Newton and the Wichita metro area are doing well.

He said, typically, the Midwest is sheltered from recession, and the job market in the area is still strong.

He said the average time a Newton home sits on the market is about 3.6 months, while nationally it can average six to nine months.

Newell said the smaller number of transactions can be contributed to several factors. People may not be putting as many houses on the market, the economic slowdown and the lack of 100 percent financing that was previously available.

Nationally, total existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 5.04 million units in the third quarter, according to the National Association of Realtors. That’s a 2.6 percent increase from the second quarter, but a 7.7 percent drop from the third quarter of 2007.

Of the 273 homes sold this year in Newton and North Newton, 44 have been new builds. However, some new builds in Newton and North Newton may never be reflected in the system if they do not go through a realtor or are not recorded in the database, Newell said. As of Nov. 1 last year, the SCKMLS listed 48 new homes sold.

As of Oct. 31, the city of Newton has issued 32 single-family residential building permits this year. The city issued 63 single-family residential building permits in 2007.

Of the 142 active or pending homes on the market as of Nov. 1, 57 of those were priced at $100,000 or less. The median price for active listings was $133,735, and the median price of a home was $119,900. For new active and pending homes, the median price was $173,650, and the average price was $185,118.

For homes sold so far in 2008, the range has been $14,000 to $437,485, with the average price at $114,028 and the median price at $101,500. The range in new homes sold so far this year is $113,350 to $374,900, with that home still pending.

In 2007, the average price was $112,130, with a median price of $107,750.

According to the NAR’s Web site, www.realtor.org, the median home price for the Wichita metro area is up 3.5 percent from the second quarter to the third quarter and 5.5 percent from the third quarter last year. Nationally, the median price is down 9 percent from the third quarter last year. Some areas of the country have seen far more drastic drops than that. Some examples include the Riverside-San Bernadino-Ontario, Calif., metro area, which is down 39.4 percent; the Phoenix-Mesa-Scottsdale, Ariz., metro area, down 27.6 percent; the Las Vegas-Paradise, Nev., metro area down 28.4 percent; the Orlando, Fla., metro area down 20 percent; and the Lansing-East Lansing, Mich., metro area down 23.3 percent.

In the third quarter, 28 out of 152 metropolitan areas defined by the NAR showed increases in median existing single-family home prices for the same quarter in 2007. Four were unchanged, and 120 metros experienced declines, according to the NAR.

Distressed sales — foreclosures and short sales — accounted for 35 to 40 percent of national home transactions in the third quarter, pulling down the median existing single-family price to $200,500 from $220,300, according to the NAR, while a year ago, there were far fewer distressed sales.

According to CNNMoney.com, nearly 1.6 million borrowers are in jeopardy of foreclosure this year. In September, there were 265,968 foreclosures in the country.

Vajnar said this area has not seen the number of foreclosures reported elsewhere.

“We have had some and will probably have more, but nothing like the national figures,” she said

She also said negative media coverage has affected the market.

“I wonder what might happen if we start publishing figures on homeowners that are doing well with paying their mortgages and the buyers who are getting home loans, instead of only the negative information that’s out there,” she said.

Mortgage

availability

Another facet of the housing industry that has been making headlines is mortgages. Melvin Schadler, executive vice president of First Bank in Newton, said there is less demand for mortgages in this area, which he attributed to apprehension because of the media’s focus on economic and housing issues nationwide.

He said people are fearful of whether property will maintain its value and whether they can get a better price at a different time.

Schadler said program changes have eliminated some buyers. Banks typically sell mortgages and other long-term policies to secondary markets, and because of the current economy, those secondary markets are no longer interested in those with poor credit or no money down. However, Schadler said those who are “fundamentally sound and not putting themselves at financial risk” by being overextended should not be hesitant about home buying.

People need “a little more down and a little better credit, but loans are still available,” he said.

Schadler said this area hasn’t been as affected as other metropolitan areas because the Wichita metropolitan area, of which Newton is a part, tends to be more conservative in both borrowing and lending. Also, he said this area has not seen the home value inflation other areas have, which have resulted in sub-prime mortgages.

He said because First Bank is local, it may not be as affected as a nation-wide bank because those banks, which have outlets in more affected areas, may make across-the-board changes as a result of issues in other parts of the country. He also said local control means decisions are being made by those familiar with the local market.

The city’s role

in housing

While the city doesn’t go out and build houses, how the city plans for future growth has an effect on housing developments.

Tim Johnson, assistant city manager, said while the city does not develop, it does require development to occur in an “organized, methodical fashion.”

“If we don’t control it, we have junk,” he said

The city, through it’s comprehensive plan, maps out a Land Use Map, showing areas where development may occur. Then developers can request annexation if necessary, as well as a certain zoning classification through the city.

“Zoning is not the only, but it may be the most important, legal device used by communities to implement their comprehensive plans,” Johnson said.

City subdivision regulations include provisions for such things as efficient and orderly location of streets, dedication of land for open space, off-site and on-site public improvements like water sewer and drainage, public facilities like schools, flood protection, building lines and compatibility of design.

Zoning classifications are developed by the planning commission, which makes a recommendation to the city commission, which must approve the classification.

Once developer go through the process of receiving the appropriate zoning classification and is ready to develop, they submit a preliminary plat to the planning commission.

The planning commission reviews the plat and makes any necessary adjustments, and then authorizes preparation of a final plat, which goes back to the planning commission.

Once the final plat is approved by the planning commission, it is submitted to the city commission with a recommendation for approval.

Once approved by the city, the plat is filed with the county.

Once it has been filed, development may occur.

Suzanne Loomis, city public works director, said the city has 1,500 lots that have been platted but do not have anything built on them.

Most of those are in the south part of town.