For those of you following this site, or who remember debate on this topic from The Quiviran newspaper, I thought it might be interesting to cover off the main question I received about this analysis: what about “tear-downs”?
To refresh your memory, here is the data from 2020:
On the face of it, asking about “tear-downs” appears to be a reasonable question: the implied question is “has the number of “tear-downs” (i.e. homes being bought for demolition, with a new house built on top of the original homesite) held down house prices in Lake Quivira”?
However, if you actually think about it, this question is a “red herring” (i.e. the implied question implies a belief that the data, analysis, and resulting conclusions are somehow “wrong”):
(1) Houses, whether for “tear-down”, or living in, sold for whatever the buyer and seller felt they were worth … in other words, the price of a house identified for “tear-down” is still an accurate reflection of the housing stock of Lake Quivira, how much a house sold for, and the level of appreciation in house prices in general in the city.
(2) Unless there is a suggestion that “tear-downs” cause disruption to neighboring houses that results in significant and measurable house price depreciation, “tear-downs” do not affect the sales prices achieved for other houses in the city.
If you do believe “tear-downs” have been hurting house prices in Lake Quivira, fair enough (you should lobby Quivira Inc. on this topic!), but irrespective of this, “tear-downs” would still have no impact on the validity of the data or analysis, as “they happened” (with the approval of Quivira Inc.), as did “their impact”.
(3) The newly built home on the sight of a previous “tear-down” should end up being worth more than the previous home.
This fact has multiple implications*, but none that would create a “dilution effect” on Lake Quivira house price growth rates versus other cities or mean that the results of the analysis were invalid.
So, in summary, unless I am missing something (and if I am, please let me know), “tear-downs” cannot be used as an explanation of why, according to the 2020 data, Lake Quivira house price growth has lagged the rest of Johnson County.
In conclusion, I am reminded why I did this initial analysis: a Quivira Inc. Board member claimed that Lake Quivira house price growth was the highest in Johnson County, and I wanted to see if this was actually true.
I for one hope that we don’t live in a “post facts” community, where truth and data don’t matter, and hope you’ll agree, if you don’t like what the data is telling you, then speak up, and try and do something about it, but don’t attack the messenger just because you don’t like the message!
(i) If the value of the “torn-down” home and the “new” home are significantly different, then a large delta between average house prices and average appraised values could occur. As of now, no significant delta is apparent in the JOCO appraisers data.
(ii) If the time between a “tear-down” happening and the subsequent (more valuable) home being sold again was significant, then the average house price might be negatively held down. However, this analysis isn’t about average house price growth (which has grown over the time periods in question), but about house price growth in comparison to other Johnson County cities, all of which also have “tear-downs” within their data.