Archive for October, 2008
Salt Lake’s September Real Estate Sales Report
October 11th, 2008 Categories: Real Estate News
Here are some stats for September. We are just about the same as August ‘08 except the median price has come down a little. We are higher than last September which was the start of the Salt Lake slow down. It will be interesting to see what October’s closing volume will be now that the seller assisted down payment program is gone. There were a lot of closings taking place at the end of September.
|
Month |
# of Homes |
Avg $ Sold |
Median $ Sold |
|
Sep ‘08 |
1,010 |
$271,392 |
$220,000 |
|
Aug ‘08 |
1,019 |
$270,798 |
$225,320 |
|
Sep ‘07 |
913 |
$275,726 |
$225,000 |
|
Aug’07 |
1,266 |
$290,437 |
$239,000 |
I find it interesting that most of the problem loans were the 100% subprime loans and the down payment assistance loan which is an FHA loan and FHA loans are full documented loans. I think they killed the wrong part, the DPAs were not the problem. Oh well.
If there any series of stats that you would like let me know and I will do what I can to accommodate you.
Data Source Wasatch Front Regional MLS
| Discussion: No Comments »
They’re Back
October 5th, 2008 Categories: Real Estate News
A lender friend of mine sent me an email on Friday telling me that there are some new loan programs that are out. One in particular is the 103% loan. It is a 97% FHA and a 6% second. Basically a buyer can buy with no money besides the earnest money.
This is similar to Salt Lake’s Utah Housing program, except you do not have to be a first time home buyer and it has higher income limits.
Now a lot of folks are going to say isn’t that part of what got us into the mess we are in?
The answer to that is not really, the problem came with people borrowing money without verifying employment and income, not the “no money” part. The other side of the no money and down payment assistance programs was that in order to do the deal the purchase price would get bumped up 2-3% to allow the seller to absorb the cost. That was causing false increase in home prices.
So now a buyer that has credit and verifiable income can buy a home.
Plus there are grants available.
Rates are still historically good, inventory is pretty full and loans are available.
So here is the question. In a buyer’s market should you be buying or selling? Hmmm!
| Discussion: 2 Comments »
Utah’s New Real Estate Purchase Contract aka New REPC
October 5th, 2008 Categories: Real Estate News
Wow what can I say. I knew there was a new REPC coming but I was surprised at the amount of changes. There is a lot to discuss on this one. Take a look for yourself New Utah REPC, the changes are in red.
Notably missing is 10.2 the basic warranties and now there is more onus on the seller to disclose. There are some changes.
If you are really bored and would like to compare it to the Old Utah REPC.
| Discussion: 2 Comments »
Affordability Issues and a Steady Stream of 1st Time Buyers
October 4th, 2008 Categories: Real Estate News
We keep hearing all the talk about Salt Lake having an affordability issue and it is said that is going to make prices come down.
It is true we have an affordability issue. I think some prices are going to plummet and some are going to stay where they are.
Let’s look at a couple of price points. Now on the higher end I couldn’t agree more prices are going to come down. In Draper there are 133 active listings in the MLS alone that are $750,000 and above. The last 30 days only one closed. That is a 133 Month supply just in Draper. Now there is a segment that is hurting and a lot of banks are going to lose I mean the tax payers are going to lose their share of the $700 Billion.
Now let’s look at the entry level. The median income can afford up to $225,000 home, the median list price is $290,000. This would lead you to believe that that those prices are going to come down.
Here’s the twist, Salt Lake County has approximately 300,000 people between the ages of 6-18 years old. Divide the 300,000 by the 12 year bracket and that means we have approximately 25,000 people per year entering the housing market. That demand is going to keep the prices from coming down in the entry level market, there is just too much demand.
So what is going to happen, most are going to be shut out. I don’t really see $250 -275,000 house dropping $25-50,000, maybe 3-6% at the most.
I think it is going to cause the price of land to come down, because the only thing a builder can sell is an entry level home, that is where the demand is and the supply short. To bring the entry level price down there would have to be a whole lot of building in the very near future. Now we know that is not going to happen till the land prices come down and builders can get loans. By the time that begins to take place the backed up demand for that product will cause the prices to stay steady.
I have some fans that say I don’t write truth. They always want me to compare this year’s numbers to last year’s numbers. I don’t use those numbers because they were not normal numbers. They were so above normal that to compare to them is silly.
Over the last 13 years the average monthly sales volume for Salt Lake County is right around 1,000 homes. The highest number of homes sold in a single month is around 1,900 and the lowest month being around 500. We are a lot closer to the average then to the low.
It doesn’t mean we are not without our problems at all. I never claimed that, I just claim we have more than one market in Salt Lake and you cannot lump all together.
I encourage and welcome discussions on these topics.
| Discussion: 6 Comments »
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