Jones and Associates Realty, LLC Archived Blog

We couldn’t agree more with today’s KCM blog!   Every home priced right seems to have multiple offers on it and this is in every price range!   Now we are starting to see appraisal problems because the true market value (what a buyer and seller agree upon) is higher than appraisers can find comparables for!   This means home prices are going up FAST along the Wasatch Front.   Call text or email Mark Jones or Monte Jones today to see what the absorption rate of homes in your area is.  Enjoy today’s KCM blog and feel free to call the Jones team with your real estate questions anytime.

KCM Blog dated 03-28-2013

Limited inventory and a very strong demand for housing has created an environment where bidding wars are commonplace in today’s real estate market. Homes priced properly are getting multiple offers within a short time of coming to market. This brings about a dilemma for the agent: How should they advise their client who is about to make an offer when other offers will also be presented?

Over the last several years, there wasn’t any pressure on the buyer to adjust their offer for three reasons:

1. There were plenty of homes for sale
2. Prices were falling
3. Mortgage interest rates were falling

They buyer could find another home easily for probably less money and a lower mortgage rate. There was no downside to not ‘upping the ante’. However, in today’s market, things have dramatically changed.

HOUSING INVENTORY

A normal real estate market has between 5-6 months worth of inventory. Over the last several years, the inventory of homes for sale had skyrocketed to 10 months. Most buyers in almost any price range had a multitude of houses to choose from. Today, the national month’s supply of inventory has fallen below five months. In many markets, there is not enough housing inventory to satisfy the current demand.

Conclusion: If the buyer loses the house they are bidding on, there is no guarantee they will find a similar home anytime soon.

HOME PRICES

Becausemof the limited inventory, home prices are again appreciating. The Case Shiller Pricing Index revealed that house prices rose by 6.8% in 2012. Experts are projecting home prices to increase by 5% to 8% in 2013.

Conclusion: If the buyer doesn’t get this house, there is a good likelihood that a similar home will cost more in the future.

MORTGAGE RATES

The ‘cost’ of a home to a buyer is determined by the price of the house and the expense associated with the financing. Mortgage rates are projected to inch up in 2013. In a recent forecast, the Mortgage Bankers Association predicted that rates could climb as high as 4.3% by the end of the year.

Conclusion: If interest rates do inch up, the ‘cost’ of the next home could be impacted significantly.

Bottom Line 

If a buyer truly loves the house they are bidding on, it probably makes sense to raise their bid now instead of waiting for another dream house to appear.

Home prices in Salt Lake, Home prices Draper, Home Prices Riverton, Home Prices Bluffdale, Home prices South Jordan, Home prices West Valley, home prices West Jordan, Home prices along the Wasatch front are moving UP!

Seems so refreshing the bad news about the Salt Lake Real Estate Market is the available inventory!     We wanted to share this months market update sent from Curtis Bullock the CEO of teh Salt Lake Board:

The number of home sales in January reached 782, up only 1 percent compared to 774 home sales in January 2012. Pending home sales (purchase contract signed) were up 8 percent in January compared to a year ago (1,002 vs. 925). Inventory levels in Salt Lake County in January fell to 4,002 listings, down 29 percent compared to 5,664 listings a year ago. With active listings at a 15-year low, the home buying process has become fast-paced and competitive, major reasons for slowing homes sales in the month of January.

Slowing home sales are a result of limited inventory. However, home sales continue to be higher compared to last year at this time. Sales of condominiums, townhouses, and twin homes should accelerate as buyers seek alternatives to purchasing a single-family home.

The median home sales price in January climbed to $206,000, up 20 percent compared to a median price of $171,500 a year earlier. Based on sales trends in Salt Lake County over the past year, there was a 3.5-month supply of housing inventory in January, down from a 5.8-month supply in January 2012. A seller’s market is typically characterized by housing inventory levels below a four-month supply.

Neighboring Davis County saw a huge jump in home sales in January, with 243 closings, up 36 percent compared to 179 closings a year ago. The median home price in Davis County climbed to $195,450, up 6 percent compared to a median price of $185,124 in January 2012. Inventory levels in Davis County fell to 4.1 months, down from 6.8 months a year earlier.

You can view the full monthly summary reports at www.slrealtors.com under the "News" link.

Sincerely,

Curtis Bullock | CEO
The Salt Lake Board of Realtors