Houses selling in days as inventory reaches record tightness in Newton

By Adam Strunk

If you want to buy a house in Newton, good luck.

Two years ago, local realtors bemoaned the tightness of the housing market with only 70 homes up for sale.

Today there’s 32 homes not under contract in the city of nearly 20,000. For context, there’s 8,237 units in Newton.

“I get hit up and people say there’s an awful lot of (for sale) signs up,” local realtor Arlan Newell of J.P. Weigand said. “Well, half of them are sold.”
Newell said there are 34 homes in the entire city under contract, according to the shared listing service used by local realtors.

Newell said, in the past, it was regular to see 150 homes on the market in Newton.

Brad Elliot, another Newton realtor shared Newell’s analysis of a tight market.
“Yes, we’re low on inventory,” he said. “I think it’s a national thing. I think it’s short clear across the country.”

He said Wichita was seeing similar issues and gave an example of a house on the market for 24 hours that already had 21 showings.

Newell said the competitiveness in houses has sometimes resulted in multiple offers on a house.
He said he thought the competitiveness of the market had also driven up local housing costs with a home valued at $140,000 a few years ago now selling at $170,000.
“If people are looking to put their house on the market, now’s the time,” he said. “I wouldn’t wait till spring.”
Newell and Elliot both said that the market is the tightest for houses in the $100,000-$170,000 range.

“Right around 150, (the market) is very, very tight. If it comes on, it gets scrutinized right away,” he said. “I’m entering a $130,000 (house) and we expect it to be gone in a few days.”

Newell and Elliot both thought that low interest rates were driving home sales. Rates on 15- or 20-year homes loans can be in the 2.5- 3 percent range.

Newell also said that prices of new housing was causing people to buy existing homes.

“The other thing that is kind of the cause, the price of new construction has gone up much faster than the price of a used home,” he said. “Those that maybe would have built a new home, they’re not going to do that now.”

Adding to those costs is a lumber shortage in the U.S., which, as previously reported, has caused local lumberyards to have shortages on everything from 2x4s to plywood, causing prices to skyrocket.
Newton City Manager Kelly McElroy said that the shortage of housing is a concern for the city of Newton.

Even if the city creates new jobs, it might not have anywhere for those employees to live.

McElroy said the city has been working to remedy such situations by trying to act as an intermediary to encourage builders to build new houses in Newton.

With new houses, new people can move in or people can move into nicer houses, opening up more inventory within the city.

The city has seen an increase in housing starts, with 11 in 2019 and nine in 2020. That’s an improvement over the prior year where few new houses were built.

Part of that stimulus has been a program where the city offered to pay the interest on the loan to build a new home, from the time it was available to occupy to the time it is sold.

“Several of the houses have had contracts on them before they are finished,” she said.

Kelly said while a number of builders have built and sold homes using the program, the city has yet to have to pay any significant amount to builders and the longest such a home has been on the market is 40 days.

She said the city takes such information and works to contact builders in Wichita, asking them to come to Newton.

Kelly also said the city continues to want to find a developer willing to build two bedroom, two bath homes that would be affordable and something to interest a younger generation.
“My opinion is that Newton’s not growing because we have no housing for people to move into.

We’ve been blessed our economy hasn’t been as affected by COVID. Our companies continue to grow and expand and build. We’ve been fortunate. We know that we are open for business but we have a shortage and they’re selling fast.”