Salt Lake Home Prices - To be Lowered?

By
Real Estate Agent with Homebuyer Representation, Inc. DRE# 5467433

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In today's Salt Lake Tribune, "Jillinda Bowers, president of Salt Lake Board of Realtors, said that when homes don't sell, 'our next step is to reduce the price. We have a positive and good market, but with the decline in sales right now, there is a need for more stabilization in the pricing.'"

So, will home prices go down?

Or, in other words, will the actual value of homes go down? Or is she just saying that all of the THOUSANDS of overpriced listings currently on the market will need to lower their asking prices?

Are homes not moving solely because they are overpriced, or has the demand for single family housing in Salt Lake simply slowed? Did almost everyone that wanted to buy a house already do it?

From my perspective, Sellers have been overpricing their homes by more than a year's worth of appreciation since late 2006. In the succeeding "frenzy" there were Buyers who would buy those homes anyway. (We were still able in most transactions to get our clients an "at, or below market value" price even in multiple-offer situations during that time.) Homes that were priced at or near market value would get offers, negotiations would take place, and those homes would sell. Homes that were priced well above market value did not sell. My clients and I walked away from many negotiations where Sellers were unwilling to sell their home at market value.

Here are my thoughts:

1. Sellers that do not need to sell will eventually quit listing their home at well-above-market value.

2. Sellers who need to sell are still willing to negotiate their prices down to at-, near-, or below-market value.

3. Builders who have built very expensive homes (where demand has slowed the most) will lower their prices significantly to finally move the inventory.

4. New Housing Starts will slow until the market gets rid of all the excess inventory via the first 3 points above.

5. Appreciation may dip. I believe that the average Sold Price of Homes will dip, not necessarily because the value of every home will truly drop, but because sales of Luxury and High-End homes will drop the most, bringing down the average value overall.*

6. Salt Lake will lull. We will creep back into the 2-5% appreciation rate range where we sat so comfortably for the 10-15 years preceding this latest market "correction" until we are once again behind the national curve and make another rebound.

Only time will tell. I'm interested in seeing what Spring and Summer bring.

Thoughts from Agents?

Thoughts from the Public?

Homebuyer Representation, Inc. is an Exclusive Buyer Brokerage servicing Homebuyers in Salt Lake and Surrounding Areas. We do not list any homes. We do not represent Sellers. We work for BUYERS ONLY on the Buying side of the transaction. We work to get BUYERS the Best Price and Terms when they Buy... "We're the Real Estate Agents who Represent the Home Buyer" TM

For more information, call us at (801) 969-8989 or contact us via the link on this page.

*Remind me to look at the total number of homes sold in the following price ranges: under $150,000, $150,000-$250,000, $250,000-$500,000, over $500,000

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Tags:
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Rainmaker
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Tom Braatz Waukesha County Real Estate 262-377-1459
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!

Hi Ben,

I like your approach to looking at issues. You look at it with a clear perspective of why people may have overpriced things in different applications, rather than think everyone needs to reduce.

Has the Salt Lake market went from soft to a lot more softer?

I may have to have that great Buyer's agent work for me faster.

Sincerely

Tom Braatz

Jan 24, 2008 07:51 AM #1
Rainmaker
252,643
Benjamin Clark
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert

Tom - I am as curious as the consumer is. I'd really like to know if we get a dip in the Average Sold Price if that means that everything has been reduced, or if it is just carry-over from lack of movement and price reductions on the Luxury and High-End housing side of the scale. (As well as from Builders who, like "regular" home sellers overpriced their homes - and how!)

It is interesting to see the incentives builders are offering so they don't have to lower the final sales price...

Jan 24, 2008 09:26 AM #2
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Rainmaker
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Benjamin Clark

Buyer's Agent - Certified Negotiation Expert
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