Home Sales Fall, But Prices Rise in November

RISMEDIA, December 21, 2006-(MCT)-The market for new homes in metropolitan Kansas City slowed significantly in November, although prices for new homes were above those from a year ago.

New home sales were down 31% from last year, and the unsold supply grew to a 12.1 month supply.

In response to the slowdown, home builders continued braking construction activity by taking out 37% fewer permits for single-family houses last month, 609 compared with 969 issued in November 2005. So far this year, permit activity is down almost 20%, with 8,856 permits issued through November compared with 11,043 a year ago.

The November numbers were issued in separate reports by the Home Builders Association of Greater Kansas City and the Kansas City Regional Association of Realtors.

The Realtor association reported that existing home sales in November were down 4% from a year ago. The supply of unsold existing homes was at 6.5 months, fairly close to the six-month figure that suggests a balanced market between buyers and sellers.

The overall inventory of unsold homes in the area fell slightly. In November, 5,583 new homes and 13,005 existing homes were on the market, down a combined 5 percent from the previous month. But the overall inventory level was 13 percent more than November 2005.

Despite the surplus of new homes on the market, prices remained healthy for those that did sell. The average sales price of a new home was $281,532, up 4% from a year ago. The biggest increase in average sales price was 14% in Cass County. Miami County had the biggest drop, 14%.

For existing homes, the average sales price dropped 4 percent from a year ago to $152,093 in November, according to the Realtors. The largest decrease was in Jackson County, where the average sales price was off 12 percent. Platte County was the only metro county to report an increase in the average existing home sales price, up 7%.
Home builders also pointed to continued growth in the number of apartments and condominiums being built as a sign the industry remains healthy.

The association reported the multifamily construction market is on pace for its best performance in five years, with building permits for rental units up 130% and condo units up 109% from last year.

"There is little doubt that we are in a changing market," Tim Underwood, vice president and CEO of the Home Builders Association, said in a statement. "The rise in multifamily homes for both sale and rent underscores how diverse the local housing market is."

Kansas City leads in single-family home construction with 1,948 new units through November. The rest: Olathe, 780; Lee's Summit, 584; Overland Park, 462; Kansas City, Kan./Wyandotte County, 453; unincorporated Platte County, 326; Lenexa, 315; Belton, 307; Raymore, 280; and Independence, 278.

Distributed by McClatchy-Tribune Information Services.

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