The Housing Market is just great...why do you ask?

By
Real Estate Broker/Owner with Bear River Valley Realty 5485753-PB00 UT

Several times a week it seems someone makes a comment about the lousy Utah Housing Market. The housing market is just great actually....it all depends on your perspective.  Are you buying or selling? What do you expect from the housing market? What is your perception of normal? All of these questions when answered will get to the bottom of why consumers think the housing market is not so good. redhouse

1) Are you buying or selling? For the home buyer the housing market is FABULOUS.  With low 4% interest rates and the fact that there are many loan programs available {and funds to lend} the cost of funds has never been better. Throw into the mix that homes especially the Bank homes are ON SALE at 25% or more discount and this marriage is made in heaven.
For the home seller...well it all depends on your circumstances.  Should you be selling your starter home that you just happen to have grown out of....could you sell at a reduced value and reap the benefits of an even lower priced Bank home? You could reap the profit on the back end rather that on the front end....Not to mention the incredible interest rates.
Several of these people are finding a way to keep the existing home as a rental and moving up anyway. Rentals are filling up fast and offer investment rewards as well as tax benefits (for another post).

2)What do you expect from the housing market? So what drives the perception of a lousy housing market? Would you recognize opportunity if it knocked on the door? (See #1). Did you realize that 91% of the people in the area ARE EMPLOYED!! Over 74% of all workers in Box Elder County are employed by companies who hire LESS THAN 10 total employees (see graphic below from Utah Dept of Workforce services). The doctors, dentists, vets, lawyers, accountants, insurance co, hairdressers, truck drivers, etc. When you think about it there are a lot of people who do not rely on ATK for wages.  So with this in mind, why would the housing market suffer due to the 9% who are between jobs?  Talk about MINORITY CONTROL!! Box Elder employment chart

3) What is your perception of NORMAL?  Normal as viewed over the past 5-6 years as a whole has meant interest rates in 6% range or more (...some unfortunate souls paid 9% or more on sub-prime loans). Normal has meant a steady increase in property values. Demand for housing in the past 5 years has driven prices up by well over the rate of inflation. So when DEMAND exceeds SUPPLY again the values will start to soar again. This is what would be considered a normal housing market.  

SO WOULD YOU RECOGNIZE OPPORTUNITY IF IT CAME KNOCKING ON YOUR DOOR?

Housing is local and has little to do with what is happening across the country.  There are now several people from out of the state looking for housing due to relocation in Northern Utah. This influx of people will see the housing market start turning back to NORMAL.  Will you be sorry you missed it? Opportunity that is.

Comments (3)

Catherine Ulrey
Keller Williams Capital City - Salem, OR
Equestrian and Acreage Property Specialist

Great article to point out the importance of perspective!

Nov 11, 2010 08:03 AM
R. Michael Scott
Weichert Realtors-Synergy - Boston, MA

Great discussion points.  I have taken this approach a few times recently and it has worked very well.  On one occasion I brought out the frustration one buyer was having with the market and now he is feeling more optimistic and excited.  Thanks

Nov 11, 2010 08:11 AM
Brian Rugg
Rugg Realty LLC Sun City Texas 512-818-6700 - Georgetown, TX
Sun City TX Real Estate - Georgetown, TX Real Est

Hello Kathy:

 

You have helped inspire me to finish a post I have drafted on this subject and explain why buyers don't care if this is the bottom of the market or not. Stay tuned.

Nov 11, 2010 08:14 AM