Archive for the 'Real Estate News' Category
May 2009 Two Types of Real Estate Offices
February 11th, 2009 Categories: Real Estate News
Steve Murray who is the editor of Real Trends made a statement ”May 2009 there will be two types of Real Estate Companies, those that are open and those that are closed”.
We have just seen one such company the McDonald Group GMAC has closed its doors leaving agents to scramble for a broker to place their license. The good news unlike the AllPro agents the GMAC agents were paid their commissions on pending deals.
So please when interviewing an agent ask them about their company. Does your company have debt? Does your company have cash reserves? If the answer is yes we have debt and no we don’t have cash or they don’t know the answers to these questions move on.
The same goes for agents align yourself with a company that will be around in a year.
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North American Real Estate Update
January 31st, 2009 Categories: Real Estate News
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December 2008 North American Real Estate Update
December 27th, 2008 Categories: Real Estate News
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Salt Lake County Real Estate Market Update
November 8th, 2008 Categories: Real Estate News
Below are links to .pdfs that show market updates for Salt Lake County. I have not found an easy format to fit in a blog page, so I decided to add the pdfs.
The reports are broken down by price range and show how many new, total listings, the Under Contract Ratio, how many expired, how many sold, the average price and how many days on the market. There are a lot of details and if you would like more or if you have any questions feel free to contact me.
My goal is to update you every every two weeks. I will switch between condos then single family homes.
Single Family as of October 27th
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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
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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!
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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.
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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.
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How Many Agents Will There Be In Salt Lake Next Year
September 28th, 2008 Categories: Real Estate News
How Many Agents Will There Be In Salt Lake Next Year
The question is how many agents will still be in business next year. Some people are speculating that we will lose 20-25% of the agents. We kind of expected 20% last year but didn’t quite lose that many. If you look at last year’s volume Sep was the first real drop and then Oct wasn’t too bad. So the momentum of the market carried a lot of agents to still have an active license. However the year we had could not support that many agents.
What is in play now is The Law Of Equilibrium. When the market was hot people were drawn to it like flies on you know what. Know that the markets are not so hot agents are disappearing faster than a six pack at frat house.
There is a period after the market shifts where there are more agents than the market can handle survive period. Then the market will equal out and then those that are running smart businesses will actually do really well.
I overheard an agent the other day. The agent said he was on the phone talking to someone that called in on an ad, the prospect said they had an agent. He asked oh, where do they work? We chuckle at that, but it is true there are a lot of agents that are not earning any money and are working full time jobs outside of the industry.
So as consumers please ask your agent are you a Realtor, a whole Realtor and nothing but a Realtor so help me?
Below is a chart that describes the law of equilibrium. It is from Gary Keller’s latest book “Shift”.
When interviewing an agent you need to ask a lot of questions. Remember two thirds of all the real estate agents got their license in the last five years. That means two thirds of all agents do not have the experience that you need. Then there is the other side. Then there is the issue of the agents that have been around for a long time. Do have the technology and the tech skills you need and deserve?
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August Sales
September 20th, 2008 Categories: Real Estate News
Salt Lake County’s Market Update
Below is a table comparing Aug home sales to July for Salt Lake County not much movement. Typically they are real close in volume and Sep’s volume is usually down from Aug. With the biggest decline in a month to month sales volume being Aug to Sep of ‘07
|
|
# of Homes |
Avg $ Sold |
Avg $ Sq Ft |
|
Jul-08 |
1,026 |
$272,635 |
$118 |
|
Aug-08 |
1,019 |
$270,798 |
$117 |
Remember the downpayment assistance program is gone at the end of this month. There are still some methods of buying with coming up with a full downpayment.
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