The Kansas City Star just began publishing a new insert aimed at Johnson Countians aptly named "913" after the area code. Although the inaugural piece was interesting, it also struck me as very negative, feeding every stereotype that has made Johnson County and its residents okay to hate on both sides of the state line.
As a Johnson County realtor, I read with great interest an article on the local housing market. The eye-catching headline spoke to a housing "crisis" in JoCo. Sensational news is the only kind that sells it seems. Particularly when print media is losing the battle to online media, it is understandable that news reporters have morphed into newsmakers. Click here to read the entire article.
The premise of the article is that the housing market isn't so rosy in Johnson County. While we have not seen the increases in housing values that we are accustomed to, I would hardly call this a crisis. California, Arizona, and Florida have a housing crisis with homes losing half of their value in a few years. What we are experiencing is a period of static or slightly lower housing values brought on by a national economy that hasn't fluorished and an over-abundance of homes, particularly new homes. This is not to say that on a case by case basis there hasn't been some hardship for many people. Foreclosures have gone up. People have lost jobs. Many must bring money to the closing table because their home isn't worth what it once was. Notwithstanding the true hardships faced by some, this isn't the scenario for most Johnson Countians.
It is time for some perspective and context to what has become a fairly static local housing market. Johnson County enjoyed an average 4% appreciation in home values for a sustained period of a couple of decades. Prior to this unprecedented growth period, the housing market was not so great. The inflation of the 1970s and 80s led to extremely high interest rates, forcing mortgages up and selling prices down. This period was preceded by a boom in the county during the 1960s when population growth took off. Residents during the 1930s and 40s probably didn't think the Johnson County market was so great then either with high foreclosures and extreme unemployment. My point is the housing market is cyclical, not unlike our economy. Before we decide the sky is falling we need to look at what happened previously and look forward to how to position ourselves in the future.
Have we simply grown accumstomed to an embarrassment of riches, unable to face stagnant home values when all we have known as homeowners is a 4% annual return on investment? The 913 article alludes to the fact that Johnson Countians can longer count on their houses to finance college education, retirement, etc. The reality that is as true today as it was in the 1930s is homes were never intended to be our personal piggy banks, a guaranteed slot machine that with a pull of the lever hit cherries every time. What is happening in Johnson County has played out across the country. A market force correction that presents a short-term stagnation but should by no means serve as a harbinger for only dark days to come.
Johnson County has all of the tools to thrive in the 21st century from an economic and housing perspective. JoCo still has by far the highest average housing value in the metro at $243,717. Platte County ranks second and trails Johnson County by a whopping 22%. Just as importantly, our median income continues to exceed regional norms, meaning there is still the capacity to purchase homes. Housing inventory continues to decrease, getting closer to a balance that favors buyers and sellers equally. House sale prices are very close to where they were one year ago in the county, indicating declines may be waning. Johnson County is still very attractive from an affordabiity standpoint ranking nearly 20% lower than the average in the cost of living index. Our median age is approximatley 35, a prime time for home purchasing and only 28% of Johnson Countians are renters. This indicates the goal for most is still home ownership. Combine our favorable demographics with strong local government, excellent schools, and diversified job opportunities and we are poised to prosper!
Mike Russell is a REALTOR with Keller Williams Realty. Mike specializes in Johnson County Kansas Homes and Real Estate for sale. Mike is a tech savvy realtor with over 17 years experience. Did you enjoy Mike's Blog? Feel free to subscribe or join Mike on his Social Network to stay up to date on Overland Park, Olathe, Leawood, Lenexa, Shawnee and all of Johnson Counties real estate news and more...
Mike Russell & Associates can be reached at 913-266-5828 or MRussell@KW.com or www.SearchjocoHomes.com