First-time homebuyers’ demand for smaller properties fueling spike in Roeland Park values, according to JoCo officials

Roeland Park homes saw the biggest jump in average value of any city in NEJC.

By Holly Cook

Roeland Park’s single-family home appraisals have increased by 16.25 percent over the last year, a bigger jump than what is being experienced by the neighboring communities of Westwood, Mission, Merriam, Fairway and Prairie Village — and first-time homebuyers can be credited in part with the spike.

[pullquote]Reminder: The NEJC Chamber and Shawnee Mission Post are hosting a town hall with County Appraiser Paul Welcome at the Roeland Park Community Center at 8 a.m. on Monday, March 12. [/pullquote]Roeland Park councilmembers were briefed on the appraisal process during a meeting Monday by Johnson County residential real estate manager Jeff Ramsey and senior regional coordinator Bill Neal.

Councilmember Becky Fast said she had spoken with constituents who asked why communities like Roeland Park with smaller homes and lower incomes were seeing bigger appraisal increases than communities like Leawood. Fast pointed out it is more difficult for lower income residents to bear the burden of a tax increase associated with higher appraisals.

Ramsey said the increase Roeland Park residents are seeing is purely driven by the real estate market.

“We have to follow what the sales prices are doing,” he said.

Ramsey said appraisals are based on a weighted average of adjusted sales prices and between 2016 and 2017 Roeland Park’s average home sale price increased by 10.79 percent.

Communities that historically have had lower home values, like Roeland Park, are seeing the biggest increase in home sales and appraisals as first-time homebuyers are priced out of neighboring communities, he said.

One reason for increased sales prices throughout Johnson County is the shortage of homes. Johnson County is averaging a 1.5 month supply of homes, which is about 4.5 months less than what is needed for a balanced market, Ramsey said.

“It’s a blinding speed at which homes are selling right now,” he said.

Ramsey said appraisers try to assign value by comparing sales prices of similar homes within an area.

This means a recently sold new build would be used as a comparison for other newly constructed homes in the same neighborhood while a recently sold older home would be used as a comparison for other older homes. Appraisers also try to compare similar styles of homes so that ranches are lumped in with other ranches and so on.

This approach works well in areas where there are plenty of similar homes to compare, but sometimes this is not the case. For example if a new build is the only home that recently sold in an area that could cause older homes to get lumped into that comparison, Ramsey said.

Communities like Prairie Village have a large enough concentration of new builds to draw good comparisons but Roeland Park isn’t quite there yet, he said.

Ramsey encouraged any homeowner who felt their appraisal was inaccurate to fill out an appeal and noted that homeowners know more about the condition of their home and neighborhood than the person who conducted the appraisal.

Ramsey cautioned that appraisals can’t be adjusted based on what a resident feels their anticipated tax bill should be. He acknowledged that lower earning groups absorbing the higher tax increase could be especially tough, but said that was an issue that needed to be addressed separately through some type of legislation.

You can see the full presentation the Johnson County officials gave to the city council below:

[gview file=”http://shawneemissionpost.com/wp-content/uploads/2018/03/2018__RoelandPark.pdf”]