There is a shortage of home inventory Salt Lake County….. Today, looking at the inventory of homes and condos for sale there are 4267 units. Also today, there are 2248 home and condo units Under Contract. A rule of thumb to measure the health of the market is supply and demand. Supply and Demand is snapshot of the current market and how long would take to absorb the current inventory. A healthy market will have an absorption of 5 to 6 months of inventory. This supply and demand ratios keeps prices in check. If there is not enough inventory for the number of buyers, prices will increase. If there is a glut of inventory and not many buyers, prices will decrease. See chart below.
Based on the figures I gave you about the snapshot of todays market, we have approximately 2 months of inventory! This is at the extremely low range of the spectrum, which has and will cause extreme upward pressures on home prices. The chart below come from the National Association of Realtors for May of 2013. This reflects a national trend.
So what does this mean for a buyer or a seller, and what is expected in the coming months? Today, the sellers have the upper hand in the negotiations process. There will be little, if any room for a buyer to negotiate in price. There will most likely be multiple offers on the same home. The only thing that is keeping home prices from heading back to pre-bubble prices is the role of Appraisers and banks. They allow certain appreciation levels on sold comparable properties, so we are seeing small steps in appreciation based on what banks will allow. The second reason, that will play a larger role, is the negative equity home owner. The current negative equity loan count from Fannie May for April of 2013 is approximately 10,400,000 units. These are homes that are essentially locked up from the market pool because buyers are waiting for the market to improve before they even think of selling. So as prices appreciate, more and more of these homeowners will start putting there homes on the market. This should ease the upward pressure as time goes by.
Currently, in Salt Lake County, the negative equity is approximately 25% according to Zillow. See the interactive map below for other counties along the Wasatch front. When will this negative equity number be absorbed? Experts don't have a timeframe, and only say that the inventory in dwindling monthly. So stay tune for more updates as we see changes in our local market…. I will report it here.
Just released; 4th quarter real state statistics for 2008. This includes the counties of Salt Lake, Davis, Tooele, Utah, and Weber. These are provided by the Salt Lake Board of Realtors and have not been made available to the media as of this posting.
Summary of Results:
- Salt Lake County: Median Price; $239,500, down 0.17%
- Davis County: Median Price; $216,900, down 3.58%
- Tooele County: Median Price; $188,000, down 1.05%
- Utah County: Median Price; $230,000, down 2.50%
- Weber County: Median Price; $167,000, down 0.54%
These changes were significantly less compared to 3rd Quarter 2008.
What does this mean?
This shows that prices in most counties around the Wasatch Front have slowed their descent; it does not mean they have stopped going down. As I have said before, buying a home is not always about how much a homeowner can make on a home, it’s about a place to live, nest, shelter, and a place of rest. Either you are renting or you are owning. If your horizon is 3 years or more, buying is the logical choice.
A program called Home Sweet Affordable Home was created by the Utah Bankers Association in collaboration with the United Way to help essential workers in the communities where they live, enjoy the benefits of home ownership with special programs that meet their needs. They have produced a brochure outlining the information for individuals and families seeking affordable housing options throughout the state.
According to Governer Huntsman:
Finding an affordable place to live plays a key role in having a good quality of life. Our communities are greatly improved when essential workers live near their work. However, with escalating housing prices, to find affordable apartments and homes.
Teachers, police, firefighters, retail clerks and other essential workers in Utah, could find a good opportunity to live in the communities they serve through this program.
photo = homesweethomeutah.org
5 Biggest Real Estate Myths:
What happened to real estate sales for November 2008 in Salt Lake County?
According to the Salt Lake Board of Realtors, the number of homes and condominiums (units) sold in November 2008 was 576 units. In November of 2007 there were 924 units sold, that’s a decrease of 38%. Another statistic to note was that median price INCREASED by 4% to $229,900 from $221,300 in ’07.
How can home prices be going up when all the indicators, and may cities home values, are going down? Well, most of the homes sold, 75%, were under the $300,000 price point, only 10% of the homes sold were above $500,000. The big difference between this year and last year is that interest rates last year were a full 1% higher. Usually when interest rate go down, people can afford more, so they usually purchase a more expensive house. Plus when interest rates are lower more people can afford to buy, so you see more entry level buyers come into the market, thus the large margin of home buyer’s in the entry level price range. When interest rates rise, people can afford less, and there are less buyer’s in the buyer pool, so more inventory means prices tend to go down.
It also might mean that prices in Salt Lake County have stabilized and may start to rise. It also might be temporary, prices should stabilize, then rise for a period of 4 to 6 months before we can claim victory over declining home prices. See my post on when it is a good time to buy to learn more about if you should wait.
What are your thoughts?
A home is a place of residence or refuge. It is usually a place in which an individual or a family canrest and be able to store personal property. Most modern-day households contain sanitary facilities and a means of preparing food. Wikipedia
Where does it say that a home has to make its owner a bazillion dollars OR is of no use in a declining market? With all the talk these days about the housing bubble and home values, to buy or not to buy, I want to look at the issue from another angle.
People NEED a place to live, shelters from the weather, a place to raise a family, to store their things, create memories. There are 2 options; you are either the owner of your domicile, or a renter/tenant of your domicile. Why own? First, it cost less to own than rent. Second, payments stay the same monthly (fixed rate over 15 or 30 years) eventually the mortgage is paid off. Third, the tax benefits from owning. Finally, after it is paid, there is a nice little nest egg, and even if it’s worth nothing, you have a place to live!
Let’s look at the last few years and why people are in such a huff over the real estate market. Without going into the details of what and why we had a real estate bubble (there are hundreds of articles out there to read), prices have fallen drastically in some markets of the country, BUT NOT ALL markets! Yes if you purchase 2 years ago and HAVE to sell now, you could loose money. But how many people have to do this? Don’t most people live in their homes at least 5 to 7 years? The problem with the last few years is that some people where caught up in the lure of rising prices and speculation, the upward spiral continued to feed on itself. The mantra for home ownership became, how much can I make on my home? And should I buy 2 more? But is this what home ownership is all about? For some, yes, for investors, for sure, but for most people, no way! Owning a home is about shelter, raising a family, security from the weather and the world? Why hasn’t this been the mantra of late? How can we bring this mantra back?
We bring it back by talking about all the reason for home ownership; what are the basic tenets of home. Reinforce the definition of HOME at the beginning of this blog, ask the question, where are you going to live and why would you wait to buy home? Taking this basic premise of home ownership, is it good to own in any market? Must you make money on your home every year? Is the requisite for home ownership to turn a profit?
I would like to take this opportunity, the beginning of the New Year, 2009, to educate and change the mantra of what it means to be a homeowner. Show that it is good to buy a home almost anytime.
You’ve checked everything in plain view — kitchen appliances, floors and windows. Now you’re ready to sign a contract, right? Not yet. One of the most important things that should never go unchecked is actually invisible. Radon is an odorless, colorless and tasteless gas, but it may be a
problem in your home. This radioactive gas comes from the natural breakdown of uranium in soil, rock and water. Radon leaks into the house through cracks or holes in the foundation and can cause lung cancer when you breathe it. Any home can have radon, whether the home is new or old, well-sealed or drafty — with or without a basement. If you think your home may have
radon, a radon test can provide you with answers. Radon test kits are available through the mail, but hiring a qualified radon tester will give you the most accurate results. If your home tests positive (a radon level of four picocuries per liter or higher), you’ll want to hire a professional to install a vent pipe and fan to filter the gas away from your home. Sealing or caulking openings in the foundation and walls also can reduce the amount of radon entering through the soil. Before buying or selling your home, it’s important to test your house for radon. If buying, ask the seller for information on any radonresistance systems in the house and their radon test results. It’s quite easy to test your home for radon, and knowing your radon level is worth it — for both buyers and sellers. For more information on how you can protect your family and home from radon, visit www.epa.gov/radon.