Wichita Housing Market Looking Promising in ‘07

Speaking at the annual J.P. Weigand & Sons Inc. forecast Tuesday with an outlook of the 2007 real estate market, both nationally and in Wichita, Ks., Mark Dotzour outlined the statistics and trends on the absorption of inventory and property values and how that would affect the industry.

While he was positive on Wichita housing growth - and noted that investors are more likely to put their money into real estate instead of stocks - he expressed concern on several levels.

Specifically, that low long-term mortgage rates could result in a national recession.

Weigand Realtor Bradley Tidemann spoke in greater detail about the Wichita housing market, saying that he expected nearly every real estate sector to be up in 2007.

The commercial real estate market, he said, will continually be sparked by more activity in the northeast quadrant - especially the Waterfront - and the Central Business District, which will grow with activity at the WaterWalk and by Minnesota group Real Development.

Retail, meanwhile, was good in 2006, but slow compared to previous years when consumer spending was much greater. Tidemann said that’s because of slower expansion from national retailers.

The industrial market in 2006 was the best Tidemann has seen in nine years, with the lowest vacancy rates - a strong 10.2 percent - since 2000. The local market should continue to stay strong in 2007, with construction of build-to-suit projects showing the greatest growth.

Over the long haul, investment in Wichita real estate is also looking up as Kansas mortgage demand increases in this part of the state.

“Our market is as good as I’ve seen it,” Tidemann says.

He expects out-of-town investors to continue to put money into Wichita and at a higher pace than local investors. Low home loan rates are continuing to spark demand in Kansas and throughout Middle America.

The farm and ranch segment is also doing well, with prices increasing and more people looking for recreational land to build on.

As for the residential real estate market, the multi-family home sector is now constantly improving, with an 8.5 percent vacancy rate in 2006, the lowest it’s been since 1997. B

ut with rent continuing to stabilize, don’t look for as many new housing starts here in 2007, Tidemann says.

Kansas home sales reached record high 3 percent increase in 2006, defying national trends. If the economy continues to be good, expect more new housing starts and an increase in home values, he says.

SOURCE: Wichita Business Journal