Northern Utah Homes & Real Estate Blog

Second quarter statistics show that home prices have slipped in Salt Lake , Utah and Davis County.  And the number of actual home sales is still down significantly in all counties along the Wasatch Front.  Ok, so this may not be a shocker to most of you, but how about this: 

I expect home prices to tumble even further in the hardest hit, most over-built pockets by as much as 20% by mid 2009.  I’m referring to newer neighborhoods where prices are well over median levels.  Where the homes are larger, more expensive and increasingly becoming more vacant as the weeks go by.

I’m basing my prediction on several key factors including:

• Front Line Observations:  As a real estate agent, I see the market on a micro level.  I draw conclusions based on conversations, observations and reactions.  I’ll give you an example.  Over the last 30 days I’ve worked with three different sets of buyers, all of whom seem to be very market concious.  Their decisions seem to be based heavily on how the purchase makes sense financially.  Whereas in the past home-buyers tended to be more implusively driven by their emotions and desires.  Today, these market concious buyers are looking to buy smart.  As one buyer put it, “I want to buy something that if I had to, I could sell in the next couple of years without a problem”.  This is the very reason many homebuyers are looking to foreclosure and short sale listings first.  Which brings me to my next key factor.
• Distressed Sales:  The number of short sales coming on the market is rising at a scary rate.  Many are selling, however a majority are being lost to the bank.  Bank foreclosures are also beginning to make their claim on the inventory of homes for sale.  As banks discount their prices to move inventory quickly, neighboring home values are immediately and directly impacted.
• Credit Availability:  or the lack therof is probably a better intro.  If you haven’t heard about the recent devastations in the banking sector it’s likely you haven’t turned on your tv, made small talk at the office, or glanced at a newspaper in the last 2 weeks.  Unfortunately, it’s not just national news.  Local banks are also seeing stock prices fall and defaults on mortgage loans rise.  Home loans are quickly becoming harder to qualify for.  Not to mention the fact that banks are requiring borrowers to bring more and more money to the closing table.  This ultimately results in fewer sales.  Mainly because would-be borrowers can’t meet new requirements and are being squeezed out of homeownership.
• Inflation:  Pretty much everything you buy on a regular basis has seen at least a modest price hike.  Consumers have already begun to tighten up their budgets and cut unnecessary expenses.  Spending dollars on extravagant homes is not high on the priority list for most Utahns at this point.

All in all, things are getting tougher for buyers and sellers.  For those who wish to purchase a home in the near future, prepare yourself to be examined under a magnifying glass in order to qualify.  For those of  you who are trying to sell a home, expect to see less than full price offers as buyers are seeking to position themselves strategically in today’s rapidly changing market.  Obviously, I’m generalizing here.  But be assured, everyone is being impacted in today’s market, one way or another.

 * Statistical data gathered from the Wasatch Front Regional Multiple Listing Service.