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2012-01-04 10:38:31
2011 Utah Market Analysis and Interest Rates

The end of a year and beginning of another is always a great time to analyze the past year and make a forecast for the oncoming year. This blog entry will first explain current mortgage interest rates, including a forecast for interest rates for 2012, and will be followed by an analysis for the 2011 Utah Real Estate Market also with a forecast for 2012. Many pieces of information in this entry have been dervived or used from various articles, newsletters, graphs, etc. produced by local lenders, national corporations, etc. I have tried to italicize and quote where applicable. 


Home Loans

Current Rates:

Conv. 30yr 3.875%
Conv. 15yr  3.250%
USDA 3.750%
VA 3.750% 
FHA 3.750%



2011 Mortgage Interest Rates

Interest rates are still at HISTORICAL LOWS and it willnot last like this forever! These rates results in savings of hundreds of dollars per month, thousands per year and tens of thousands over the lifetime of the loan. In addition, these rates also allow buyers to qualify for more home for the same payment compared to the more normal interest  rates of 5.5-6.5% (the rates that we expect to see once again when the economy completely recovers). 


DO NOT WAIT for these rates to disappear!! WIth the lowest home prices in a decade and historic low interest rates, there is no reason not to buy now, especially if you plan to live in the home for at least a few years!! Seriously why rent and make others money when you can be making money yourself?!

Review of Last Week

''GOODBYE, 2011!...The wild year on Wall Street ended not with a bang but a whimper, as stocks slumped slightly for the week on very light trading. Volatility was the theme for 2011, although when all was said and done, the broadly based S&P 500 stock index ended dead flat for the year. This reflects how many investors view the economy: recovering so slowly, its growth slope is practically horizontal. The year's volatility was echoed in a 140-point drop Wednesday followed by a 136-point surge the very next day. 
'The week's positive economic news included the Pending Home Sales gain covered above and initial jobless claims staying below 400,000 for another week. But none of this 'good' news was very terrific, so economic emotions were held in check by the usual suspects: European debt worries and corporate underperformers. Sears announced it would close about 100 stores and American Airlines parent AMR Corp., which filed for bankruptcy protection last month, revealed its stock would be delisted from the Big Board. 

'For the week, the Dow ended down 0.6%, at 12218 but UP 5.5% for the year; the S&P 500 also dipped 0.6%, to 1258 but was unchanged for the year; and the Nasdaq dropped 0.5%, to 2605 and was down 1.8% for the year.

'Although it was a low volume week all around, the bond market behaved conventionally, prices heading north as stocks drifted south. The FNMA 3.5% bond we watch ended the week UP .95, at $102.27. According to Freddie Mac's weekly survey, national average fixed mortgage rates inched up from the prior week's record lows. But they're expected to stay in super low territory for awhile.

Forecast for 2012

''It's been said that 'the only constant is change.' And we certainly saw a lot of changes in 2011. As we ring in 2012, here's a look at how 2011 ended, and what lies ahead for home loan rates.'

'...There was some good news, as Consumer Confidence came in at 64.5 for December. Not only was this the third highest number reported for 2011, but this important index has jumped nearly 25 points in the past three months and now sits at its highest level since April. What's more, this report followed the recent Consumer Sentiment Index reading, which also came in at its highest level in six months.

'While consumers certainly appear more optimistic here, the news hasn't been as positive out of Europe...'

'So what does all of this mean for home loan rates here in the U.S. in 2012? The uncertainty in Europe should continue to help Bonds and home loan rates, as investors will see our Bonds as a safe haven for their money - and remember, home loan rates are tied to Mortgage Bonds, so rates typically improve as Mortgage Bonds improve. However, continued good economic reports here in the U.S. could balance out those improvements. That's because investors will typically move their money out of Bonds and into Stocks during good economic times, so they can take advantage of gains.

'The bottom line is that whatever lies ahead this year, 2012 begins with home loan rates near historic lows...which makes this a great time to purchase or refinance a home.'


Real Estate Markets

National Market Update 

'Last week's Pending Home Sales index from the National Association of Realtors (NAR) went UP 7.3% in November, hitting its highest level since April 2010! And that earlier reading was artificially boosted, as buyers rushed to beat the deadline for last year's home buyer tax credit.'

'The NAR's chief economist commented, 'Housing affordability conditions are at a record high and there is pent-up demand from buyers who've been on the sidelines.... The sustained rise in contract activity suggests that closed existing-home sales...should continue to improve in the months ahead.' The S&P Case-Shiller index for October showed minor price drops in 19 of the 20 surveyed metro areas, but the index was UP 1.9% from its post-crisis low in March 2011.'


Utah Market Update

'Stable' seems to be best word to describe the end of 2011 and beginning of 2012 Real Estate Market in Utah (Utah and Salt Lake Counties).

Within the market, there are definitely some types of housing and areas that are struggling, while others have been stable since 2009 and others that are showing some strong appreciation. This is why it is so important to hire a qualified real estate agent who can help you better understand your specific market and trends. The 'Real Estate Market' is so complicated and diverse that it is impossible to use a blanket statement to accurately cover all sub-markets.

The first half of 2011 saw a huge hit to older homes , condos and townhouses, and areas of lesser demand (suburbs and rural areas). At the same time, newer homes have been very stable, large newer homes have experienced some appreciation, and major urban centers have seen appreciation as there exists very little land left to develop. See graphs below for examples. If you would like a custom market analysis for your property(ies), all you have to do is ask.

The bottom line is that as a whole in Utah and Salt Lake Counties, most real estate professionals are expecting 2012 to be a year of stability, with some slight appreciation as a whole and continued increases in overall home sales.

Below contains sections from a chart produced by the Utah Association of Realtors which contains accurate numbers for home sales. It was very difficult to format but I hope you can follow it. If not, let me know, and I will email you a complete PDF on this chart. 

Local Market Updates by County
November 2011

                                               Closed Sales                                                Median Sales Price*

                                          11-2010   11-2011   + / –   YTD 2010   YTD 2011   + / –         11-2010   11-2011   + / –   YTD 2010   YTD 2011   + / –

Davis County217 236 + 8.8% 2,776 2,746 - 1.1%        $196,850 $186,550 - 5.2%    $201,214 $185,000 - 8.1%

Salt Lake County    760 867 + 14.1%             9,561 10,379 + 8.6%       $200,000 $178,500 - 10.8% $209,000 $185,000 - 11.5%

Utah County            373 404 + 8.3%               4,527 4,951 + 9.4%             $184,900 $176,945 - 4.3% $190,000 $178,000 - 6.3%

Wasatch County     46 36 - 21.7%                 416 490 + 17.8%                  $331,750 $202,500 - 39.0% $275,000 $229,000 - 16.7%

Entire State             2,285 2,523 + 10.4%      27,811 30,036 + 8.0%        $186,250 $170,000 - 8.7% $190,000 $175,000 - 7.9%

* Does not account for seller concessions. | Some figures are for one month worth of activity and can look extreme due to small sample size.

This report includes data from the Wasatch Front Regional Multiple Listing Service, the Iron County Multiple Listing Service, the Washington County Multiple Listing Service, the Carbon/Emery Multiple Listing Service, the Central Utah Multiple Listing Service, the Grand/San Juan Multiple Listing Service, and the Park City Multiple Listing Service. Powered by 10K Research and Marketing.


Utah Real Estate Market Graphs

1. Utah and Salt Lake Counties

 Utah and Salt Lake Counties Market Graph


2. Utah and Salt Lake Counties 1990 or newer

Utah and Salt lake Counties 1990 or newer


3. Utah and Salt Lake Counties 1990 and older

Utah and Salt Lake Counties 1990 and older


4. Utah and Salt Lake Counties, 2005 or newer, 5000+ sqft, .25+ acres. 3+ car garage

Utah and Salt Lake Counties, 2005 or newer, 5000+ sqft, .25+ acres. 3+ car garage


5. Utah and Salt Lake Counties, 2005 or newer, 3500-5000 sqft, .25+ acres. 3+ car garage

 Utah and Salt Lake Counties, 2005 or newer, 3500-5000 sqft, .25+ acres. 3+ car garage


6. Utah and Salt Lake Counties, 1990-2000, condos and Townhouses

Utah and Salt Lake Counties, 1990-2000, condos and Townhouses


7. Spanish Fork to Pleasant Grove ALL

Spanish Fork to Pleasant Grove Home Sales


8. Utah County, 2005 or newer, 3500-5500 sq.ft., 3+ car garage, .25+ acres

Utah County, 2005 or newer, 3500-5500 sq.ft., 3+ car garage, .25+ acres


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