The Shortage of Home Inventory in Salt Lake County

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.

 

Posted on August 8, 2013 at 12:09 pm
Marvin Jensen | Category: home appreciation, home ownership, Market Conditions, Salt Lake Real Estate, statistics | Tagged , , ,

Did You Miss the Housing Price Bottom in Salt Lake City?

The news lately has been filled with housing price appreciation… With all the numbers flying around it's hard for the average person to make sense of what this all means. How does this affect me?! There are a few of scenarios you need to understand. First, is year over year price appreciation, second, price appreciation from the bottom, third, the number of units sold and lastly, prices as compared to the top of the market.

If you've been following the news, just about every week there are articles about how prices are up. A lot of these numbers are year over year appreciation for a particular month, say June, compared to June of the previous year. They also like to throw in the number of units sold, this is the number of units sold year over year, or sometimes month over month. If you don't read the article carefully, these numbers can be very confusing and misleading. 

The following chart shows the median price of a home at the top of the market in Salt Lake City only. It shows the median home price at the peak of the market at $223,751. Four years later in 2011 we saw the lowest median price of $177,204. (these numbers are year over year starting in January and ending in December, except 2013 which will be year to date, June). A price drop of 20%. Some parts of Salt Lake County experienced closer to a 40% price drop, mostly newer construction south and west of the city center. See chart below.

Something I want to point out in this chart is where housing prices are so far in 2013. They are 10% lower than they were at the peak. 

Below is an example comparing the number of housing units sold. This graph shows that the peak of the number of units sold was in 2005. A full 2 years before we started to see the housing prices start to fall. As you can see there was a 48 percent drop in the number of units sold, NOT price change…. this is big difference.

I also want to show you how housing prices in other parts of the country compare to Salt Lake City's. The following charts show the 20 city Case Shiller index. As you can see, every single city is still below their peak home prices, even though some have experienced over 20% appreciation!

 

Here is a map of the 20 city index for better visual comparison on which parts of the country are fairing better.

 

So, the question in the title of this blog is did you miss the housing price bottom? Yes you did…. The good news is that the market is far below the peak prices we saw back in '06 and '07. Should you be considering purchasing if you have been on the sidelines waiting? That depends on your situation, and only YOUR situation.

If you have any questions or comments, please let me know below…. What's the best situation for you now? Call or email me and we can schedule an appointment to review what is best for you.

 

Posted on August 2, 2013 at 8:41 pm
Marvin Jensen | Category: home appreciation, Home Buying, Market Conditions, statistics | Tagged , , , , ,

3rd Quarter Salt Lake County Homes Sales

home_sales_graphs_chart-3rd-09jpg1

Posted on October 1, 2009 at 11:48 am
Marvin Jensen | Category: statistics | Tagged ,

Condo Median Prices Almost Back to Pre-Market Correction Prices!

The following graph show the quarterly statistics for Salt Lake County real estate.

Single Family

home_sales_graphs_chartsinglephp

Condominiums

home_sales_graphs_chartphp

The number of condominium sales have risen sharply in the 2nd quarter of 2009 as well as median sales prices.  Prices for condominiums are almost back to pre-market correction prices! Single family numbers have risen in the 2nd quarter, but median prices are still drifting lower.

We should have 3rd quarter statistics which will be interesting to see. Check back soon!

This report was generated automatically by the Wasatch Front Regional MLS on 07/23/2009 at 02:57 PM
Posted on July 23, 2009 at 2:07 pm
Marvin Jensen | Category: Market Conditions, statistics | Tagged , , , , , , ,

Condo Median Prices Almost Back to Pre-Market Correction Prices!

The following graph show the quarterly statistics for Salt Lake County real estate.

Single Family

home_sales_graphs_chartsinglephp

Condominiums

home_sales_graphs_chartphp

The number of condominium sales have risen sharply in the 2nd quarter of 2009 as well as median sales prices.  Prices for condominiums are almost back to pre-market correction prices! Single family numbers have risen in the 2nd quarter, but median prices are still drifting lower.

We should have 3rd quarter statistics which will be interesting to see. Check back soon!

This report was generated automatically by the Wasatch Front Regional MLS on 07/23/2009 at 02:57 PM
Posted on July 23, 2009 at 2:07 pm
Marvin Jensen | Category: Market Conditions, statistics | Tagged , , , , , , ,

April Home Sales Climb 16% over March

The Salt Lake Board of Realtors just release the sale numbers for April 2009. Here is their press release:

26 May 2009 (Sandy) – The Salt Lake Board of REALTORS® said today that existing home and condominium sales in Salt Lake County in April climbed 16 percent over March sales. Sales were down 17 percent compared to April 2008.

In April, there were 844 homes and condos sold in Salt Lake County compared to 730 sales in March. In April 2008 there were 1,018 homes and condos sold.

The median price of homes and condos sold in April was $220,000, down 1 percent from $222,200 in March and down 6 percent compared to a median price of $234,900 in April 2008.

The median sales price of all homes and condos sold in Salt Lake County peaked in June 2007 at $243,700. When compared to April 2009, the median sales price has fallen 10 percent.

Read complete text here.

Posted on May 27, 2009 at 9:07 am
Marvin Jensen | Category: Market Conditions, statistics | Tagged , , ,

Median Home Prices in Salt Lake City Stabilizing

According to Altos Research, an online statistical graphing company, the median price for homes in Salt Lake City has stabilized during the month of May 2009. See the following graphs below:

median-price-slc1

The median price per square foot is also stabilizing:

median-price-per-sq-ft1

Average days on Market has increased slightly, but still lower than it was the latter part of 2008:

average-days-on-market1

Inventory of homes on the market has come down from a few months ago:

inventory-for-slc1

Posted on May 20, 2009 at 10:42 am
Marvin Jensen | Category: Market Conditions, statistics | Tagged , ,

Housing Affordability Surges to Highest Level in 18 Years

house-web4According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) the nationwide housing affordability jumped 10% during the first quarter of 2009, the highest level since the series began 18 years ago. The HOI showed that 72.5% of all new and existing homes sold in the first quarter  of the year were affordable to families earning the national medium income of $64,000. The affordability index for the first quarter of 2008 was just 53.8%.

See entire article here: Housing Affordability Surges to Highest Level in 18 Years | RISMedia

Posted on May 19, 2009 at 3:45 pm
Marvin Jensen | Category: statistics | Tagged , , ,