I have been listening to a lot of Real Estate sources to get a sense of this unique Real Estate market we are in. And out in the field, the most asked question is, “Are we in a bubble?” or, “When is the bubble going to burst?”
I don’t see a bubble. The main differences were the bank loans in 2005-2008. Stated income loans that could be attained by anyone that stepped off the bus in Washington County, had a job and show proof of deposits. During that time I started my Real Estate career sitting in a model home for a developer, writing contracts as fast as I could. Crazzzzy times.
But then one day, no one came in. The phone stopped ringing and then several days in a row without any bodies warming the seat across from my desk where so many had sat before buying homes like candy. The constant courtesy knock followed by the squeak of door hinge opening and new buyer walking in the front door ceased.
And that eery silence like before a Tsunami hits was undeniable.
Today the bank loans are solid. Buyers are really vetted before given the PreQual green light to go search for a home of their dreams. And interest rates, even at 5% range are still historically low.
With low inventory, 95% of the homes I have listed have sold at list or above list price. We are leveraging the fact that if the Buyer walks, where are they going to go!? I have had a few agents beat me up on my Listed price and walk, only to return and write a full price offer.
This is a unique market as to low inventory, so it’s still a Seller’s market. And at the same time a great time for Buyers because of rates.
According to Jeff Andrews, Data Journalist says, “Instead of a housing oversupply that required creative lending to attract buyers, today we have a housing shortage that’s creating an affordability crisis. Homes for sale in some of the hotter markets in the U.S. spark intense bidding wars usually won by the person with the most cash or the best credit. What realtor is going to sell a home to someone who needs a subprime mortgage when they can pick and choose between multiple offers that are more than likely going to include someone with good credit? Low supply and high demand mean high prices. One could argue that today’s housing bubble isn’t a bubble at all, but a reflection of an incredible supply and demand imbalance.”
I have had some buyers say, but homes are too high! But consider the huge dive home prices took from 2009-2011 or more. Then the resurrection of home sales when interest rates were dropped in the 3% range to where we are today………..Homes would be the same price if homes appreciated at a normal rate from 2004 to today. Let that sink in with 5+% loans available.
We know the Real Estate market is generally on a 7-8 year cycle of appreciation in values before a correction. We are still climbing since 2008. Some say our true correction didn’t start till later because of the money put into the economy to stimulate it. (Shovel ready Obama jobs) But that money was an artificial push and wasn’t effective. The real growth and correction didn’t start till much later. If that’s the case, we could still see a strong market for a few more years. That’s a debate I am still processing and listening to the experts.
But here is my own observation on what I have seen and heard.
As I drive Washington County looking forward, this is what I see.
Heavy equipment clearing the ground in commercial and residential neighborhoods all over the bottom of Southern Utah. Like giving the county a huge exfoliation. The sound of clanky tracks of backhoes and buzz of electrical saws, with intermittent rat-tat-tat of nail guns echoing off the red rock in all corners of our county. All trades in the construction industry are in high demand.
What I see is mass building across our State. 1900 new homes added in the last year. Eventually, Supply and Demand has to kick in. When high-density housing opens and gives more options for renters and Home Sellers are competing with new construction. so prices should soften. How much? I don’t know. Estimates or 4-5%.
What I know is Renting has skyrocketed. I have seen units that rented for the $ 900-month jump to $1400 a month. If you are renting because credit issues are keeping you from buying, contact me. I have assisted several renters to become homeowners. But 3-6 months from now, you will be glad you started today, to talk to a professional and get your credit score up where you can pay your own mortgage and not pay off the landlords home. By the way, I have had more than a few call me and tell me the Landlord has decided to Sell because its the best market in decades to sell. You don’t need that hanging over your head.
What I see going forward is Investors investments, peeking on their rental units and vacation homes.
New home construction saturating the market and turning toward a Buyers market again.
But like my Island friend told me When you can SEE the Tsunami, it’s too late.
So basically, the time to act is NOW!! It might even be too late before I get this blog loaded on my website. We are that close.
As a Seller, lack of Inventory has positioned you in the best place to cash out your investments.
As a potential Buyer, I would still buy now. I don’t see prices in homes declining enough to offset the current, low-interest rates. And let’s be honest, the real cost to buy a home is the cost to finance it. So with Interest rates expected to go up it doesn’t make sense to wait to buy. And if you hire me, I will look at homes not on the market, For Sale by Owner and old expired to find you a home.
But Investors, if you jumped in the market 5+ years ago, you could be sitting on $50-$100,000 in equity. Rents have been over the top, right!? NOW seems like a really good time to cash out, re-invest your equity with a great financial planner and watch the market to jump in again.
Talking to my Financial Planner, Adam Fluckiger, at Edward Jones, say a one year CD at 2.4, almost 2.5% would be beneficial. That’s not my expertise, but you can call him about your unique situation at 435-635-3353
Give me a call for any questions you might have on Buying, Selling or the market in general. We are currently in the best market in a long, long time. Solid with an Economy that has seen “Help Wanted”
signs posted on most businesses, producing the environment to favor change. Buy a home. Cash out your investments, Downsize, Upgrade and fix your credit. Reach me at 435-229-7604 or UtahHomesRus417@gmail.com or go to our website, www.UtahHomesRus.com.