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2012-10-31 09:59:40
Third Quarter of 2012 Market Analysis

Recently, KSL.com published an article entitled 'House prices in Wasatch Front improve in third quarter', in which it was reported that 'For the July-September period, the median single-family home price in Salt Lake County increased 11 percent to $218,000, compared with a median price of $197,000 in the third quarter 2011' and that 'Utah County saw its third-quarter median sales price rise a little more than 6 percent to $205,000, with the Davis County median price increasing 8.42 percent to $206,000 and Weber County climbing nearly 8 percent to $151,000 for the three-month period.'(http://www.ksl.com/index.php?sid=22753382&nid=148&title=house-prices-in-wasatch-front-improve-in-third-quarter)

 

The purpose of this blog article is to give more detailed analysis to more specific areas and types of housing. Due to my left-brain tendencies and my Jewish blood, I find the best way to analyze the market is through graphs and numbers. These graphs will show the median sales price, the number of homes listed and the number of homes sold per quarter since 2004. After these graphs, I will include a written alaysis of the market trends, including an analysis of interest rates.

PLEASE BE SURE TO READ the analysis after the graphs!!

 

The following graphs can be found below in the following order:

1) State of Utah - ALL HOMES

2) State of Utah - SINGLE FAMILY HOMES

3) State of Utah - CONDOS and TOWNHOUSES

4) Salt Lake County

5) Wasatch and Summit Counties - 

6) Utah County

7) Utah County - HIGH END SINGLE FAMILY HOMES (1990+, 3500 to 5500 sq.ft., .25 acres, 3+ car garage)

8) Utah County - HIGH DEMAND SINGLE FAMILY HOMES (1990+, 2500 to 4000 sq.ft., .15 to .3 acres, 2+ car garage)

9) Utah County - CONDOS (1990+, 3 bed, 1000 to 1300 sq.ft., 0 car garage)

10) Utah County - TOWNHOUSES (1990+, 3-4 bed, 1200 to 2000 sq.ft., 0-1 car garage)

11) Utah County - STARTER SINGLE FAMILY HOMES (1920-1990, 3 to 4 bed, less than 2000 sq.ft., .1-.25 acres, 0-2 car garage)

12) Lehi/American Fork

13) Saratoga Springs/Eagle Mountain

14) Alpine/Highland

15) Pleasant Grove/Lindon/Cedar Hills

16) Provo/Orem

17) Springville/Mapleton/Spanish Fork

18) Payson/Salem/Santaquin

19) Woodland Hills/Elk Ridge

 

GRAPHS:

1) State of Utah - ALL HOMES

Utah Real Estate Market Trends

2) State of Utah - SINGLE FAMILY HOMES

Utah Market Trends - Single Family Housing

3) State of Utah - CONDOS and TOWNHOUSES

Utah Market Trends - Condos and Townhouses

4) Salt Lake County

Utah Market Trends - Salt Lake County

5) Wasatch and Summit Counties 

Utah Market Trends - Wasatch and Summit Counties

6) Utah County

Utah Market Trends - Utah County

7) Utah County - HIGH END SINGLE FAMILY HOMES (1990+, 3500 to 5500 sq.ft., .25 acres, 3+ car garage)

Utah Market Trends - Utah County Luxury/High End Homes

8) Utah County - HIGH DEMAND SINGLE FAMILY HOMES (1990+, 2500 to 4000 sq.ft., .15 to .3 acres, 2+ car garage)

Utah Market Trends - Utah County High Demand Single Family Homes

9) Utah County - CONDOS (1990+, 3 bed, 1000 to 1300 sq.ft., 0 car garage)

Utah Market Trends - Utah County Condos

10) Utah County - TOWNHOUSES (1990+, 3-4 bed, 1200 to 2000 sq.ft., 0-1 car garage)

Utah Market Trends - Utah County Townhouses

11) Utah County - STARTER SINGLE FAMILY HOMES (1920-1990, 3 to 4 bed, less than 2000 sq.ft., .1-.25 acres, 0-2 car garage)

Utah Market Trends - Utah County Starter Single Family Homes

12) Lehi/American Fork

Utah Market Trends - Lehi and American Fork

13) Saratoga Springs/Eagle Mountain

Utah Market Trends - Saratoga Springs and Eagle Mountain

14) Alpine/Highland

Utah Market Trends - Alpine and Highland

15) Pleasant Grove/Lindon/Cedar Hills

Utah Market Trends - Pleasant Grove, Lindon and Cedar Hills

16) Provo/Orem

Utah Market Trends - Provo and Orem

17) Springville/Mapleton/Spanish Fork

Utah Market Trends - Springville, Mapleton and Spanish Fork

18) Payson/Salem/Santaquin

Utah Market Trends - Payson, Salem and Santaquin

19) Woodland Hills/Elk Ridge

Utah Market Trends - Woodland Hills and Elk Ridge

 

BRIEF REAL ESTATE MARKET ANALYSIS:

As you can see, as a whole, the state of Utah has experienced two straight quarters or remarkable and consistent increases to the median sold price. This can be explained by several different unique factors to Utah:

1) Unemployment - In Utah, unemployment has dropped to 5.4%, the lowest amount since the recession, and much lower than the national average of 7.8%. So more people are working and qualifying for mortgages. Unemployment is even lower in Salt Lake and Utah Counties (both recently reported to be under 5%). This results in HIGH DEMAND!

2) Relocating, expanding and start-up companies bringing new jobs - This definitely relates to unemployment, but many new big employers have either relocated to Utah, opened up new offices in Utah, have expanded their Utah offices or started new, successful businesses in Utah. This has not only brought jobs to Utah, but higher paying jobs to Utah, making competition for housing more intense. Several examples of these companies include Adobe, Micorsoft, NSA and Novell. See: http://www.ksl.com/?nid=960&sid=19781597. This again causes an INCREASE IN DEMAND. 

3) Low Inventory - In 2009, thyere were always between 22,000 to 25,000 active homes on the MLS. Right now, there is just over 13,000 active listings. Of those 13,000, about 3000 are non-approve short sales or short sales with offers to the bank (basically NOT active listings), taking us down to about 10,500 active listings. Of those 10,500 active listings, 5000 of them have been on the market for over 90 days (over-priced inventory or otherwise not the most 'sellable' inventory). Of those 5,500, there are only 2,500 that have been on the market for less than one month and 1200 less than two weeks (usually the best inventory stays on the market for only 2-4 weeks). Of those listed less than 2 weeks, there is only 200 of them in Utah County and 50 of them in Provo and Orem. Of those 50 in Provo and Orem, only 19 of them were built 1990 or newer and of those 19, only 8 are single family homes and only 6 that are under $400,000. Only half of the listings end up selling (due to homes being over-priced and/or poor condition), so right now there are only 3 active listings for single family homes in Provo and Orem that heve been listed for less than 2 weeks for under $400k. COMPARE THIS TO THE FACT THAT THERE ARE CURRENTLY 30 OF THESE HOMES UNDER CONTRACT. This is obviously a sign of LOW INVENTORY (SUPPLY). 

4) Not Enough New Construction - I won't get into numbers due to time but new construction has been down since 2008 and has not kept up with population growth. Add this to all the new job creation in Utah. Housing Shortage = HIGHER DEMAND for Housing. 

5) Record Low Interest Rates - Although we are about 1/4% higher than the record low interest rates we experienced a few months ago, we are still holding tight at 3-3.25% interest for most 30 year fixed rate loans and under 3% for 15 year fixed rate loans or ARMS. This results in being able to afford much more home for the same price or the same home for a much cheaper payment. See interest rate graph below. This again results in HIGHER DEMAND. 

INVENTORY IS LOW, DEMAND IS HIGH AND WELL PRICED NEW LISTINGS ARE FLYING OFF THE MARKET!! With an experienced and hard working Realtor on their side, buyers are still able to snatch up these new listings. Both my buyer's agent, Howard, and myself, have had record years. But home prices are starting to go up and the AMAZING deals of the past are being left in the past. 

Interest rates will go up, home prices are going up, and we are quickly leaving Rock Bottom in the past.

If you are looking to sell, Howard and I have sold EVERY home that we have listed this year, including multiple short sales. If you want to get top dollar for you home, right now is the time to do it with inventory so low. 

If you are looking to buy a home, DO SO BEFORE RATES RISE AND HOME PRICES CONTINUE TO APPRECIATE!!

If you are considering buying right now, BUY NOW!! Rates will go back up to 4% soon and 5-6% soon enough. You are talking about a difference of $300/month in JUST INTEREST on a $200k loan if rates go back to 5%, AND THEY WILL ... SOON!! Do not delay! Lock in these rates ASAP!!

 

Loan Amount

2.875% interest

(August 2012)

3.625% interest

(2011- early 2012)

4.25% interest

(2010)

5% interest

(2009)

6.25% interest

(2002-2008)

8% interest

(92-02)

$100k $460 $520 $560 $605 $690 $810
$120k $555 $630 $675 $730 $830 $970
$150k $690 $785 $840 $910 $1,030 $1,210
$200k $920 $1,045 $1,120 $1,215 $1,375 $1,615
$300k $1,380 $1,575 $1,680 $1,820 $2,060 $2,420

From this chart, pre-approved for $200,000 in August would only be approved for about $170,000 if rates go up just to 4.25%. Buying a home for $200,000 in August would have the same payment as purchasing a home for $150,000 at a little over 5%, which is historically an AMAZING rate!

DO NOT LET THESE RATES PASS YOU BY!! We have no idea how the Presidential Election will affect rates but these rates may be done sooner than we expect. 

If you are considering buying or selling a home in Utah in the near future, please speak to Howard or myself and set-up a time for a sit down meeting with us to discuss your options. 

Don't hesitate to let us know what we can do for you!

 
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