I’m going to break for this post from talking about Kansas City real estate investment property and talk about a specific part of the Kansas City real estate market and that is Johnson County, Kansas. You see, a real estate investor client of mine who has purchased a few homes from me has asked me to help his son and fiance to buy their first home. They are looking for something that will give them the warm and fuzzies but also be a solid buy and a good investment.
What they want is a home in the Overland Park/Leawood area of town priced between $175,000 and $200,000 with at least 3 bedrooms, 2 baths, 2 garages…you know the drill. Most of their money will be spent on the down payment, closing costs and move-in expenses so they don’t want or need a fixer. So what can we find them “under-valued?”
Let’s break for a moment and talk about mindset. With all the bad news thrown our way day after day after day (by the way, go back and read my posts from a couple years back…you’ll see I never bought in to the whole “boom” thing for KC, either) you’d think you could pick up houses on the cheap all day every day. So what exactly does “under value” mean?
In my humble opinion Johnson County, Kansas is, has been and will continue to be the economic engine of Kansas City. Oh, I know KC has more population and business headquarters and all that. But the money and exec types have always ventured over to the Kansas side. (Calm down Missouri. I didn’t say all the money and execs and I didn’t say we were better than you.) 😉 Although our football team beat your football team…
Real estate values in the Kansas suburbs simply have not dropped the way people have seen real estate values drop as little as a few miles away on the Missouri side of the line. There are only 45 homes available that meet the criteria of these new buyers and really only 9 of them look all that appealing. Days on market? Looks like about 122 is the average…throwing out one on the market for about 2 years.
A closer look reveals some more interesting thoughts about our current real estate market in Johnson County, KS…or at least this part of JoCo. In the last 6 months (that’s what appraisers are looking at, right?) the average days on market for homes in that price range has been 73 for the solds. Average asking price has been $187,421 with average sales price right at $181,738. That’s still 97% of asking price!
Does that sound like a depressed real estate market to you? No. Houses are not selling in a week or two any more. No. You can’t just ask whatever you want price wise, either. But ask yourself this the next time you are hearing all the bad real estate news: What does this have to do with me and my current situation? Maybe everything. Maybe nothing. That’s why you need professional help when trying to decide.
One last note. And this will concern Kansas City real estate investing. I’ve been accused of being a snob when it comes to helping people buy residential investment property. But if you’ll look at the rental properties I’ve sold to my buyers over the last few years I’d put their current values next to any current values in the country. Some have actually appreciated even as we stand today. Others are even and a few are actually a little depressed. But in all cases rent covers the costs as we initially calculated. So even the depressed houses have the wherewithal to ride this storm out.