After two overheated pandemic years, the real estate market is beginning to show signs of stabilization, Johnson County Appraiser Beau Boisvert told county commissioners last week.
While appraised value for residential property is higher, the percentage increase falls well short of the double digits the county saw last year, Boisvert said.
This year, the average residence (excluding apartments) increased in appraised value by 7.5%, compared with 12% last year. About 80% of residential property increased by 10% or less.
“We are back to what I would consider a stabilized norm of the market,” he said.
More than 90% of homes will see value go up this year
During the height of the COVID-19 years, people stopped traveling and put more investment into their homes. That, combined with low interest rates, made the situation ripe for higher real estate values the past couple of years, he added.
Numbers of sales were also down, as were residential building permits. Almost 91% of residential properties, including apartments, will see an increase in value, with 9% decreasing, according to the report.
Although the number of home sales are down, prices are still higher than last year, Boisvert said.
That translates into one to three potential buyers looking at a home compared to the five to six that might have looked in previous years.
Where are home values going up the most?
The average sales price for a new home this year was $745,000, and the average resale price $515,000.
Boisvert said there was about a two-month inventory on the market in a recent study.
The appraiser’s heat map of valuation shows south-central and western Johnson County with the highest value increases — from 7% to nearly 10%.
Other pockets of high valuation increases were in the extreme northeast and an area close to Interstate 35 and Kansas Highway 7.
Areas with the lowest increases tended to be in the central and northern part of the county, as well as just south of Interstate 435 and U.S. Highway 69.
The number of homes valued at less than $150,000 continues to shrink. This year there were only 555 such homes in the county. Last year, there were 963 homes in that category.
Other takeaways
Office — The office market is still struggling and on a downward trend, Boisvert said, as owners figure out what to do with the space in the face of a shifting work culture. Older buildings are being looked at as possible apartment space, he said, which is part of a national trend.
Close to 89,000 square feet of office space was added this year, but most of that was projects that were being finished up, he said.
Apartments — There’s still a strong demand for apartments, but “we’re starting to see a little pushback from the public,” against new apartment space, Boisvert said. Apartments are 90% filled, which normally would give developers reason to build more apartment space, he added.
Industrial — This segment is still growing “leaps and bounds” due to Panasonic and other major developments in the county. Some 6.7 million square feet of industrial space was built in the past year, he said.
Hotel — This market is still dealing with fallout from the pandemic and the change in travel patterns, he said. Hotels are getting filled on weekends as tournaments and events resume, but they lack the weekday business because employers have discovered virtual meetings are effective and are rethinking their travel, he added. No new hotel space was built in the county for the third year in a row.
Keep reading: Johnson County home values keep rising fast — See latest data for your city
