Utah Real Estate Market

Utah Real Estate

I used to report that Utah Home sales were the last frontier where huge home appreciation rates were not experienced yet, such that lots of investors and home buyers could come and make a go of it. Well, along with that I think that the 'Wasatch mountain range' really did have a 'shield affect' for lots of Utah from a lot of this yo-yo like market the rest of the nation has been experienceing. Even now, they hold off as 'conservative' with housing prices being held down along with the rest of the nation. When I heard that Utah boasted one of the better appreciation rates I decided to try and do some research. But the following information taken from the Desert Morning News, Feb. 15, 2008, left me really a wondering about that.

Sales of existing homes in Utah dropped 33.8 percent in the fourth quarter of 2007, compared to the fourth-quarter of 2006, mirroring decreases in much of the rest of the nation, according to a report released Thursday by the National Association of Realtors.

The median sale price of existing homes in the Salt Lake City area also showed a drop at the end of 2007. While sale prices for the year were up 2.5 percent overall, they decreased 7.13 percent from the third quarter to the fourth quarter of 2007.

The median sale price of a home in the Salt Lake area in the fourth quarter was $229,100, down from a median sale price of $246,700 in the third quarter.

Utah Association of Realtors president Dave Mansell said even though sales are down, there is still cautious demand in the marketplace in Utah. "People are holding back because they're afraid the market is going to fall on its face," he said. "They're hearing Florida, California and Las Vegas are seeing these huge drops in prices, and they think it's coming here."

But Utah will likely avoid major problems, he said, because the state's economy is strong and the housing market has not been vulnerable in the ways other areas have been.

"Historically, we haven't had the same market swings," he said. "We don't go up as fast, and we don't fall as fast or as far, so it's much more stable." Sales of existing homes fell in 45 states during the October-December quarter, with metropolitan areas showing growing weakness, the national report said. The fourth-quarter data from the National Association of Realtors underscore the breadth of the housing market's slump.

Prices have fallen more than 10 percent since their July 2006 peak, in the worst U.S. housing slump in 26 years, as the number of unsold homes has grown and prospective homeowners have had a tougher time getting home loans.

Global Factors - U.S. Housing Demand

There are a few looming factors that in paraphrasing Chief Economists of NAR, will make it just a matter of time before the housing market becomes an engine for the economy, rather than a drag for the economy. First off interest rates were dramatically cut in January by the Federal Reserve. Also, home prices are projected to stay lower. Secondly, the job growth has far outperformed housing. Typically we will see one new buyer for every 2 new jobs created, but that has not been the case for some time. So, with home prices being down and job growth having been high, new buyers have the wherewithal to buy. The guess is that they are waiting for rates and housing prices to fall even more. Another third major factor mounting demand, would be the increase in population numbers that will help fuel more new construction and even resale demand.

St George Real Estate

The local Southern Utah real estate scene has some complex factors weighing in on the scene. One, we used to have a lot of Californians and Las Vegas buyers and that segment has all but wained. When you take such a major segment away and when you still have some persistence in home values, with not too much drop being experienced along with all the Short Sales, one begins to wonder if the illustrious appeal from the immigration doesn't just generalize to a broader spectrum from the entire U.S. and to the more northern region of Utah as well as into the state of Idaho. Retirees, both from the northern regions (too cold up there) and south, are contributing as well.

The areas homogeny contains a large mix of Mormon or LDS population in those more localized Utah and southern Idaho regions and this contributes at least in a moderate flow of immigration to this area. But the attraction to the area is much more diverse now with the the intrinsic appeal of being geographically centrally located, in the mild climate area and more accessible to both the north and south mid-west. Also appealing is the geologic red rock formations and general sandstone color mystique of the area, boasting Zion National Park and Snow Canyon State Park, a stones throw away- this doesn't hurt the matter any.

This is to mention that the area is becoming much more homogenized with influx from all various parts of the country. We at SoUtah.com believe that these factors all add up for a quick one to one-and-a-half year turn around of the market to normal appreciation rates from 6 to 9% again. In the mean time, many smart buyers will have found a niche property or two for investment or retirement ends. We also project that values, although maybe dropping marginally, will maintain mostly at flat levels or will not extend to be a huge drop, and in the main price range under 300K may turn sooner vs. later to actual appreciation of home values once again.

St George real estate is always going to fall victim, as in 'the new decade holder for being the fastest growing micro-macropolitan area in the nation', to the mere fact of location, location, location. We haven't even began to talk retiree dialect. Some have asked, when stumbling onto St George, Utah, 'Why in the heck would I retire in the desert when I can have the best of that weather and of the more scenic country side, along with more things to do, not to mention the solid family and community values one gets a sense of, when living here. Also, combine that with the quaint artsy-ness of the place and the culture that is here? Along the main I-15, blink and you miss it, just like life! Soon and all the kids will be out of the nest for me (5 kids, oldest is 12)- check out your St George Realtor. Pretty much this is also the only place you can go for a quick search of St George Utah Retirement Communities.

St George Utah

St George
St George is a wonderful place to live!... IF you are a realtor with a bunch of REO bank sales in your queue. Never mind my huge bias of it is a heavenly place to live.

Combine this... St George Real Estate Sales
Your St George Utah real estate market update comes from some pretty good background or listening-in, on the local statistics experts. I use that word "experts" with caution, because we know nobody holds a "crystal ball". Take that into consideration when we talk about the following, OK? Can I start by saying I'm going to be couching every thing in the phrase of "combine this..."?

Basically, we have felt a slight pick up, some yes, but mostly on the REO bank sale front. Combine this with an article off MSN that reported the bank sales not to be letting up with the option loans still making its rounds through the next year- interest rates changing on people from fixed to variable higher rates, thus more foreclosures possible. Yet, as of today I see some segment of a lot less REO homes on, that I have ease dropped on office activity in seeing a surge of buyer activity regarding. On the other hand, combine it with St George not lacking in the supply or inventory, on the market, category. On the other hand 'back at you', I thought I heard that we are hedging changing the pace toward downward, to sale faster than they come on (what must go up there, must come down to) to start us back to a more normal supply (way far off). However, the catch is that supply is anticipated to come on perhaps even stronger throughout the year. Go back and combine this with the foreclosure market, at least giving enough comparables to show lower pricing. That being said, you'd think it is possible to see lowering of prices. That is very possible by this time next year.

Combine that... FHA Loans & Interest Rates
Yet, I have felt in my office a surge of activity, and we are the largest producing office, so you would think that could be a big enough pulse maybe to tell something about here and now. Combine that with the idea of buying activity could be expected to come back stronger perhaps because you can't keep it back forever. Uh, how about this area being centrally located. Combine that with 'way good' all time low interest rates. Combine that with FHA, or federally backed loans becoming easier for people to get with new reforms. Before option loans in 2000, FHA accounted for 25% of loans- that's huge. So, it could come back in to help in a significant way-- so says chief economist Yung at the National Association of Realtors. Already, minor changes to the FHA program, making them easier to apply for and obtain have been incorporated, but the significant changes are anticipated to come around beginning of summer or later- you know congress. Forclosures however, have the ability to offset everything in bringing prices down and supply up. Combine all the factors, listening to the stats people especially, and I predict a market that will be flat to somewhat depreciating. Homes could continue to suffer some depnding on area, especially if in higher price brackets, and the fact of new construction being the one key variable unknown impacting a lot of that 'stuff'.

Good News If you are the Buyer
The good news for buyers may be that enough REO bank sales can pull on houses to sale below perceived market value. So as almost always, selective buying or "it was a deal" kind of buying, should be OK to find and do. Perhaps the best lesson is for the Seller- 'don't be greedy, it may cost you in the long run.' If you would like no nonsense, "don't care if it offends you" advice on how to price your home to get top dollar out, give me a call. Besides, have you ever seen how much exposure we are giving our Sellers on our St George real estate home page?!

2008 A Normal Market - Steadying Picture

Economists agree that home sales (new and existing) will bottom out in 2008, somewhere in the second or third quarter. While we've kind of been in that scenario already, it is quite a different thing for forecasters to go on the record stating a clear demarcation for appreciation again. So, local markets may vary, but nationally, because of underlying health issues involving the U.S. economy, there is a projected 'line in the sand' coming, stemming an unprecedented historical decline in housing prices.

In certain areas where there has been fantastic appreciation in the past, causing more of a bubble bursting situation, one can relatively project before old pre-appreciative spiked sales prices, given a homes average typical appreciation of 4 to 5% a year, where things ought to be now. It mostly lines up with a bit of slowing still projected through 2008.

Some variance of predictions exists between Chief economist Yun with the National Association of Realtors (NAR) and economist Douglas Duncan with the Mortgage Bankers Association (MBA). Yun asserts that while lending is more stringent in their requirements, he still believes that the pool of qualifying buyers is larger than believed saying, "This slowdown has never been about the underlying fundamentals of the economy... Consumers have the means to buy, but they've lacked the confidence. Once they see sales and prices stabilizing, they'll be back in the market." Conversely, with access to loosely written credit closed off, Duncan asserts, "you're likely to see continuing decline in the house prices and buyers sitting on the sidelines."

Economists say that tighter underwriting is exactly what the market needs right now. But Yun believes that the pool of ready buyers will still be larger than believed because they will have more financing options such as federally backed loans, specifically FHA loans. He recounts that FHA loans had a 20 percent share of the market in 2000 before the growth of sub prime lenders and if Congress passes reforms making them easier to obtain, which it is doing, then it can capture that share again.

I called one of my local St George Lenders, Steve Stout with SGI Mortgage to ask him about FHA reform passing and he told me that it hasn't done so yet, like anticipated. He also detailed how that he already supplies the FHA lending options as a lender. He clarified that the reform making FHA more of an option to people is not so much the requirements they have, but in outsourcing the availability of the program itself to all the different mortgage lenders there are, although reforming requirements is arguably a needed big part of it as well.

Alan Greenspan, former Federal Reserve Chairman, in speeches last year, gave a less than one in three for chances that the economy would slip into recession this year, which is the only thing that could quell a return to normalcy in the housing market. Even the Mortgage Bankers Association, sees a persistent growing of the economy through the first three quarters of the year as a basis for home buying ramping up into the end of 2008 and beginning of 2009. The key factor of how the housing is also dragging or won't be dragging on the economy is also thus taken into account in their models.

The commercial real estate is poised for continued solid performance across sectors this year. The tightening lending standards in the commercial sector have been taking place over time relegating commercial to a more normal and traditional scenario involving income investing. In other words, commercial owners plan to make more money from cash flow rather than appreciation. I can help if you need help regarding St George Commercial Real Estate.

Overall, 2008 is the year of return and not continuing decline... a year of return to normalcy.

If you'd like Brian to keep his eyes and ears peeled for you to help take advantage of good deals which equate to buying right, just give him a call or visit us on our website at St George Real Estate.

St George Real Estate - National vs. Local Market Conditions and Projections 2008

National Scene 2008
The National real estate scene has seen characteristic turns in the market that correspond with interest rates, such that predictions into 2008 on existing-home sales is projected to trend gradually and only modestly upwards according to the National Association of Realtors (NAR). They point to a recent mortgage disruption that peaked in August leaving the fall-out of lower home sales in September and October 2006. Since mortgage rates have improved the existing-home sales are expected to improve slightly to stable over the next couple of months. Because home sales have been significantly less in 2007, however, as compared with 2006, a Pending Home Sales forward-looking indicator index, helps project that the broad trend over the coming year of 2008, while a gradual rise in existing-home sales, will only be modestly higher than 2007, according to Yun, chief economist with the NAR. A recovery of new home sales is unlikely before 2009.

St George Utah Real Estate
As far as St George Utah goes- one local guru has gone on the record to say that he thinks things will pick up early spring.

Here on the local scene, home sales in periphery locations, even Hurricane, have suffered the most. Normally we would get our spill over of buyers into the more rural locations, perhaps from Californians looking to get back to a more rural simple existence and out of suburbia. In my limited view, we are closely tied to the national scene, such that when the coast lines free up, then we also tend to get back to a normal market. I think the highly affected rural areas are symptomatically the first responders and indicators of the future. One system affects another and right now Sellers in the more rural areas are mostly hanging onto their equity, rather than giving it away. Who might could blame them? In other words, if they were responding with significant price reductions, than we could forsee it in our future more centrally located in the Greater St George area.

It appears to me that while transactions are down there is and has been, for some time, a pretty good resistance by home owners to NOT lower prices, such that speculation buyers have had to halt activities for longer than they have wanted to in desperate hopes that prices would drop even more. I suspect that some of that will go on into the new year with some wondering if the winter will put the "freeze" enough on the sellers to come down even more. St George is still an attractive place and other non-speculative buyers are and will be buying and creating enough activity, to keep sellers sustained in their activities to try to maintain value... in my opinion.

In other words, if you as a buyer are waiting, I do not think it will be for an opportunity corrsponding with the market at large that you will avail yourself of, so much more than in waiting for that right opportunity that one can 'normally' find. However, this view is being challenged still, by all the Bank REO sales and short sales that seem to be receiving some numbers and flow, in terms of a large number of porportionate properties that are "moving" at this time.

This is your eye on the St George Real Estate market coming to you from the desk of Brian Habel, your St George Utah realtor. Be sure to visit my website and use my advanced property search provided through the Home Buyers Scouting Report- you will be glad you did. My many users, over 60 buyers, are currently enjoying the aerial photography of listings (I hope you've learned about the "Birds Eye View" from clicking on Map Views) and a way to save and track your favorite properties with email updates and being notified of any changes, such as a price change, addition of a photo or if the status changes to Under Contract, etc.

Southern Utah Home Buying Guide

Not long after I have ventured to say that our St George Ut real estate values will be alright, I found this Southern Utah Home Buying Facts Guide in my realtor box. It is most persuasive with a lot of facts pointing to- 'this is a good time to buy'. I think it will offer you some of the solace and 'get off the armchair' type of information you might need to get going and buy something. OK, it's obvious that I'm a realtor who is a realtor looking to win your business. I see my colleagues whose professions are just as much seeking for equilibrium. We will weather the storm. The art of sales has only to do with pursuing conversations and then finding out if we are a good fit for each other or not.

If I was St George, Utah, I'd be meeting you more than half way to ask, might it be a good time for you to buy? Feel free to check Brian Habel with REMAX out at St George Realtor. I offer a buying service at my St George Utah real estate page that gives you aerial photography of all the listings and way to keep track of your favorites in a property notebook. Oh, and if your are from out of town, you can find out where all the shopping, restaurants, libraries, airports, and schools are, with respect to where each individual listing is, that you are looking at on the map. There is nothing like it on the Internet- it is well worth the... no obligation, very secure sign-up, with all your information being kept confidential to a preferred lender and myself.

Utah Real Estate

Utah real estate will be OK. As a result, because St George real estate has usually faired better than the rest of the state with more growth per capita, then it also ought to be OK. These summations come in the wake of a recent visit by a national real estate expert, Peter Linneman, to Utah's NAI Utah Real Estate and Economic Summit this last Tuesday, of October 16, 2007. Here are some comments from him and privelaged information concerning the future of Utah Real Estate:

“I don’t see any chance of a [national] recession in a coming year,” he said. “We don’t have supply that we can’t absorb.”

A widely-published economist, Linneman is the founding chair of the Wharton School of Business real estate department at the University of Pennsylvania and was also recently named one of the most 25 influential people in real estate by Realtor magazine.

Many buyers panic unnecessarily about the local residential real estate market when they see national media reporting a plummet in housing prices, Linneman said. While growth in Utah’s real estate market has slowed, standing inventory will be filled in the next six to 14 months. The U.S. economy is doing exactly what it should be doing, he said.

“All areas…are doing normal, except housing, which is doing less than normal, which is what it should be doing to get back on track,” Linneman said.

The real estate market is not booming as it was a few years ago, but it’s not crashing, Linneman said. Growth is down, but prices are fine, a common misunderstanding, Linneman said. Growth in the sector is slowing, which is a normal, necessary outcome after the spike of the past three years. Real estate continues to appreciate at a normal rate of 1.3 percent annually, which is a healthier, more sustainable pace than the country has previously experienced.

“The housing sector should be weak,” he said. “If the housing sector were still doing well, we’d be setting ourselves up for a bigger problem.”

Currently, 450,000 homes sit unoccupied across the nation, Linneman said. However, 25 percent are located in southern and central Florida and an additional 25 percent in Phoenix, Las Vegas and southern California. The rest are scattered fairly evenly across the United States.

“You know what that says about the rest of the housing market? It’s not in bad shape,” Linneman said. “That doesn’t mean there isn’t a little excess, but that excess gets used up in months, not years.”

Contrary to many reports, the national economy is still performing well, he said, and will continue to do so during the upcoming year. More than 89,000 new jobs were added nationally in August, according to Linneman. Looking beyond the data, Linneman said key indicators of a strong economy are airports, hotels and restaurants, all of which are bustling.

“People do not go on big holidays when the economy is in bad shape; you don’t send six employees to a conference when the economy is in bad shape,” he said.

Linneman predicted a slight recession in 2009 and 2010, largely due to the introduction of a new presidential administration, which will lead buyers to pause as they see what decisions the new president will make. He counseled commercial real estate developers to be cautious about how much speculation space they bring online in 2009 and 2010, because a recession could lead to less job growth and slower business expansion.

Utah’s economy also continues to experience growth, and the quality of life in the state is a key driver, said Jason Perry, executive director of the Governor’s Office of Economic Development, who also spoke at the event.

“By all key indicators, we have the hottest economy that exists right now,” Perry said.

According to a report from the Utah Department of Workforce Service released Tuesday, employment growth was 4.4 percent and 53,500 jobs were added during September in the state. Unemployment remains at a historic low of 2.7 percent.

“We are competitive with any state for bringing business into the state,” Perry said.

Because of this strong performance, Utah has been able to attract larger, more prestigious companies as possible move-ins. Perry mentioned a potential relocation deal with manufacturer Procter & Gamble, which would bring 1,300 jobs into the area.

“There is reason to be very optimistic about our future,” he said. “Things are happening here in the state of Utah.”

Housing Projections - Soul Projections

Housing Projections
The National Association of Realtors (NAR) indexes pending sales and follows seasonal patterns of sales and as such they report that pending sales of existing homes decreased at a seasonally adjusted annual rate of 12.2% to 89.9 in July from June's 102.4. Signed contracts for previously owned homes, was 16.1% below the level of July 2006. The NAR reports that the index shows existing-home sales are likely to decline in coming months as mortgage disruptions work through the housing market.

Here locally, St George Real Estate has mimicked what we hear on the national scene. One could also speculate, that even as the commercial sector is growing supporting a jobs growth economic base, that the illustrious influx of money like from: the baby-boomers, the second-home owners, and the California-like buyer who used to be able to get 'bank' on their home out there and come here to live in style, has been depleted by market conditions and has offset and curtailed any of the benefits that earlier 'leaked-out' fame may have brought us. The real benefit may be for the working class family that would like to continue to live, work AND purchase in St George Utah.

Soul Projections
How market conditions are, while shifty to perception, because it is harder to also get a loan now too, can be relative to whether you are the buyer or whether you are the seller. One should not always be duped by the luster and hype, when sales is merely the art of bringing out what is 'on the inside'. May we all 'shine' brighter- the congruence we 'would' make in the corollary.