The high number of Kansas City cheap homes drove the spike in total home sales in February, according to sales figures from the Kansas City Regional Association of Realtors in Missouri.
A total of 1,396 new homes and pre-owned homes were sold in February, marking a sharp 18-percent increase from sales in January, although down by four percent from February last year.
Because properties continued to enter foreclosure auctions in Kansas City in February and increased the overall distressed inventory, house prices were dragged down. The average home sales price for the 156 new homes sold was $292,972, down by three percent from the February 2009 median. The average price for the 1,282 pre-owned units sold was $127,449, down by three percent from the February 2009 average.
Because sales of new homes increased, the inventory of new homes dropped by 41 percent year-over-year to 1,811 units, spurring hopes in the home building sector. However, home builders are still handicapped by the lack of financing for residential construction.
In addition, the surge in foreclosure filings in the area and the consequent surge in Kansas City cheap homes could weaken sales of new homes again. In February, a total of 1,752 homes in the Kansas City area got hit with default and repossession filings, an increase of 9.7 percent year-over-year and a jump of 9.8 percent from January. Total filings in the area meant that one foreclosure filing was posted for every 495 homes in the area.
Among the 15 counties covered by the Kansas City metropolitan area, Jackson County posted the biggest number of filings, which involved 988 homes. Next was Johnson County, which posted a total of 375 filings. Wyandotte County posted 167 filings, the third biggest number.
Statewide, a total of 3,014 households were notified they were distressed, a 2.3-percent increase from January but marked a 3.7-percent decrease from February 2009. While Missouri ranked 30th among states based on foreclosure rate, its neighboring state of Kansas ranked lower at 39th. Only 794 homes in Kansas got hit with foreclosure filings in February. Missouri posted a foreclosure rate of one per 884 homes while Kansas posted a rate of one per 1,545 homes.
On the whole, the Kansas City housing market is still a buyer’s market because of the prevalence of Kansas City cheap homes and low-priced farm land for sale. Distressed properties still comprise a huge percentage of the 7.1-month supply of pre-owned homes.