Don Eusey
April 17, 2008
Emporia real estate broker and president of the Emporia Real Estate Association Don Eusey will answer your questions about Emporia's real estate market. If you have questions about buying or selling a home - submit your questions now.
Moderator: The recent job losses at Tyson Fresh Meats have changed the Emporia real estate market. Emporia real estate broker Don Eusey is president of the Emporia Real Estate Association. He is here at The Gazette today to answer questions about the housing market in Emporia and what people looking to sell or buy a house can expect in the weeks and months to come. Our first questioner asks for an "unvatnished assessment" of the housing market in Emporia. Don't forget to hit the refresh button often to keep up with the discussion.
netloafer: An AP-AOL national poll published today is showing that 60% of Americans are saying they will not be in the market to buy a new home in the next two years, partly because loan requrements are tightening and partly because they would have to sell the homes they're in and there is no equity or negative equity in what they have. Here locally, more and more houses are going on the market. This past Saturday I spoke with a couple of people involved in real estate and they said that the number of new foreclosures here in Emporia is going up - now averaging ten or more a month. This is not a rosy picture. I'd apprI expect there will be lots of talk of "this is a great time to buy" or "the market is just great." But, I think we need an honest, unvarnished assesment of where we are and how we can dig out of the hole. Our poverty rates are on the rise, median home values are going down, the city's major employer has laid off over 2/3d's of its workforce. What's the unvarnished plan on the housing front?
Moderator: This question came in three days ago. Because it is so long and complex, Don prepared an answer in advance to save time for later questions.
Don Eusey : As much as I’d like to say that the Emporia Board of Realtors has a plan for solving the nations housing crisis, we really don’t. But we do want to promote homeownership in our community. We are well aware of the challenges that face our community; however the causes are often beyond our control. Although we typically avoid the extremes of the housing (and other economic) markets on the east and west coast, our local market has been impacted by a major layoff by our largest employer. The last time something of this magnitude happened was in 1986. At that time, the country was dealing with the savings and loan crisis and locally we saw construction cease at Wolf Creek and Santa Fe terminate its Emporia operations. I don’t think we can expect not to have some challenges ahead of us. However, if we follow a similar pattern as happened in the 80’s, we will find that housing prices will be depressed for a time, but values will soon increase and overcome any decreases that resulted from the financial downturn. While I don’t think anyone could seriously say that the market is “great”, nevertheless, people who are not dependant upon getting huge equity gains from their current home (first time buyers or investors, for example) may find that this is an advantageous time to purchase real estate. Savy buyers may be able to find an excellent value, financed with long term low interest loans that will see solid appreciation in value in the near future.
poacher: How do Emporia's housing stats compare to last year at this time. How many homes are for sale and how many have been sold?
Don Eusey : Currently there are 245 homes listed for sale in Emporia. While the market in 2007 was excellent, the first quarter of 2008 has shown quite a bit of softness. Even though we listed 60 more houses in the first quarter of this year compared to last year, (probably caused by the Tyson layoff) the number of sales have decreased by this year by 40% (attributable to tightening credit and losing a large part of our move-up market – Tyson employees.) One bright spot is that the average sales price for the quarter is up by $30,000.
poacher: Is it better to be buying or selling a house right now?
Don Eusey : To answer that question we often look at inventory levels. We typically say that 3 or 4 months of inventory is good for sellers and more than that is favorable for buyers. Currently we have 8 months of inventory in the Emporia market. Buyers should be happy, since this means they have a good selection of high quality homes from which to choose.
popular: How much has the housing values decreased in the last 10 months? Is there a difference between houses in town vs. rural houses with land?
Don Eusey : The Board of Realtors does not do the type of statistical analysis needed to determine increases or decreases in housing values. This is something that the County Appraiser can do, based upon the sales validation questionnaires that are provided to his office for every property that is sold. Realtors provide sales information to homeowners to help them compare their house to similar houses which have recently sold. We don’t base our determination on statistical values, but by comparing a property to similar sales within the previous 6 to 12 months. Our calculations involve specific properties, not general trends. To answer your second question, supply of and demand for rural property fluctuates as do other properties in our market but it is too early to tell if the Tyson layoff is effecting rural properties differently than properties within the city limits.
rmbcollege: What are the certain first home buyer grants or other programs that a first time home buyer needs to know about?
Don Eusey : As far as I know, there are two first time homebuyer grants that are available for qualified individuals. The first is the City of Emporia FTHG which is a block grant from the State of Kansas and is administered by the City of Emporia. Information can be obtained directly from the city offices. The second is Kansas Housing Resources Corporation program. Information about this program is available from your local lender. These programs provide from $3 to $5K in assistance for FTH which can be used to help with closing costs and a down payment.
rmbcollege: What is the first thing that first time homebuyers should do when thinking about buying a house?
Don Eusey : The purchase of a home is one of the biggest steps a person can take to become a stable contributor to our community as well as to achieve his or her financial goals. Needless to say, most first time homebuyers do not have the resources to purchase a home outright. Obviously, what makes homeownership possible for the majority of buyers is our country’s sophisticated mortgage lending system. First time homebuyers should carefully research financing options by speaking with one or more knowledgeable loan officers who can guide them through the mortgage process. Once he or she has selected a lender, a buyer is well served to obtain a letter of pre-approval from their loan officer. This letter will help determine the price range of the housing search, along with serving as an inducement to a seller to negotiate an offer quickly.
mrdennis: I'm a professional from Lawrence who will need to stay over in Emporia a few nights a week. Can you recommend a complex or source of nice yet inexpensive apartments?
Don Eusey : This chat is not a appropriate forum to make a specific recommendation. Generally speaking, since Emporia is a college town, we have a wide variety of very nice apartment communities from which to choose. I would recommend checking in the classified section of the Gazette for current availabilities or looking on-line, using one of the many apartment locating search engines. When making a selection, it never hurts to interview current tenants to determine if you will be compatible with the type of residents at the given location. Students, young families and professionals like yourself all have very different needs which should be taken into account before choosing to sign a lease at a specific location.
alsrac: With all the financial trouble and an overstock house market (selling houses) It is a good idea to buy our first house right now?
Don Eusey : Given the current favorable interest rates and the broad inventory from which to choose a suitable house, I think that not only owner occupants, but small investors should be looking to find a purchase that will provide for a solid gain in value when the housing market begins its rebound later this year. I think that some people may look back at this period and wish they had taken advantage of the market we find ourselves in.
moderator: With the Tyson news - do you find that house appraisers are appraising homes for less? If so what does that mean for sellers?
Don Eusey : Even though Realtors are in the middle of the real estate transaction, we are not privileged to the appraisals which are provided to the lenders as part of their qualification process. Please remember that neither the appraiser nor Realtor determines the value of a home. The value of a home is determined by what a buyer is willing to pay and a seller is willing to accept. Generally, the law of supply and demand influences buyers and sellers. Either a decrease in demand or an increase in supply could cause a decrease in prices. Sellers need to consult with their Realtor to make sure their property is priced right. Otherwise they may get a nasty suprise if the appraisal comes in below the contract price.
moderator: Does Emporia still have a housing supply problem. If so what price range are they in?
Don Eusey : Emporia has a good selection of house in all price ranges. There are fewer choices under $40K and over $250K, but in the other price ranges, there is plenty to choose from.
quarterback: If we want to get into real estate investing in Emporia what do you recommend. Single family homes, duplex, four plex, apartment complexs?
Don Eusey : A lot of this depends upon your personal goals and your personality. For someone who has not owned rental properties previously, I recommend starting with one or two single family units to see if it is something you enjoy doing. If you find management to your liking, you might want to consider purchasing multi-unit properties. Remember, rental properties are not for everybody. It tends to be a ‘round the clock type commitment. Additionally, managing multiple units takes an increased commitment on the part of the landlord, due to more complicated maintenance and regulation requirements.
quarterback: What is the best part of town to buy house where house values remain strong and remain in demand by buyers?
Don Eusey : I don’t think any one part of Emporia can be considered the “best” place to buy in regard to properties holding value. Depending upon the price range that a person is interested in, there are many places in Emporia that have historically seen steady growth in values. For more information about specific neighborhoods, you should talk with your Realtor.
Moderator: These next questions have come in during our chat and seem to comprise a single question. Don will answer them together.
kansasdman: Is an agent who ones a house obligated to disclose the problems with a house?
kansasdman: Explain the difference when describing a basement as wet or just moisture around the perimeter?
Don Eusey : Realtors, whether acting as principals in a transaction, or helping others, are obligated to treat all parties fairly and to disclose any detrimental property conditon about which they have personal knowledge to all parties. In order to discover hidden problems, we recommend that buyers obtain professional inspections of the property. If you have had a problem with a specific Realtor, you may contact me or other members of the Board to learn more about the Code of Ethics which Realtors are obligated to follow.
Moderator: That's all the time we have for out chat today. Thanks to Don Eusey for participating and to all our readers who submitted questions. A transcript of today's chat will be printed in Saturday's Gazette. It will also remain available on this Web site. Goodbye, and thank you again.