Thursday, January 19, 2006
Economic Summit 2006
I'd like to talk between the lines with two sources I have come accross in telling what the demand and in predicting what the market will do here in the local area of St George, Utah for the year of 2006.
The first source is an article from January 2006 copy of REALTOR Magazine, entitled "2006 economic outlook- A Stellar market by any measure". This source comments, "Despite lagging consumer confidence, the economic fundamentals are good. Continuing strong population growth, fueled in part by immigration and new household formation by boomer children, is keeping housing demand at peak levels." An easing housing shortage with increase of inventory on the market, although still lower than usual, will soften price appreciation. That is on the grand scale. Now for the St George Utah area.
Recently an ecomomic summit 2006 was held for this areas real estate, Saint George as its chief anchor city. The report puts appreciation values for 2005 as among the highest in the nation for real estate.
In looking forward to 2006, a look at what the projection of what interest rates plan to do is in order. The summit comments that, "The 30year fixed rate mortgage should trend up modestly and reach 6.6 percent during the second half of 2006." To continue with predictions and comments from the summit, "The residential construction market is showing initial signs of slowing nationwide. However, in Utah homebuilding remains strong with residential construction concentrated in Salt Lake, Utah, Washington, and Davis counties. All indicators point to a vibrant residential construction market, with singlefamily housing accounting for much of the growth.
Average U.S. home prices increased 12.02 percent year over year from the third quarter of 2004 through the third quarter of 2005 . Utah continues to show noticeable house price appreciation with annual price growth of 11.4 percent. Utah’s ranking jumped to #22 , compared with #31 in the previous report and last place in the fourth quarter of 2003. St.George came in at #4 in terms of highest rates of house price appreciation when compared to other “Metropolitan Statistical Areas” with a one year appreciation rate o f 31.57% .
While there may be a housing bubble on both coasts, it is not likely the case anywhere in the intermountain West and certainly not here in Utah. Growth in our market can be attributed to nice homes in great neighborhoods. We enjoy spectacular scenery set in a mild climate. We have amenities and cultural offerings often times reserved for large metropolitan areas. We have the peace of mind associated with worldclass healthcare and a sense of security that comes from below average crime statistics. All in all, we are living in a pretty great place. Bot tom line, 2 006 will be another great year for investing, owning and transacting real estate in Southern Utah!"
Summit Report- inclusive of
Among the things included in the summit report are:
The St George MSA (Metropolitan Statistical Area) was the fastest growing area in 2003 according to the Census Bureau. Graphs show single family residences, land, lot and water, and condo townhomes. The graphs show the number of sales for the last five years, which 5 subset areas contained which portion of that, the last three years month-by-month sales prices graphed linearly and average quarterly sales prices for the last three years compared side by side. Other items covered are: residential building permits and for what areas, housing inventory, future big developments, home appreciation forecast, affordability index at its lowest, where is the in-migration coming from, market indicators, global economic conditions, median price appreciation for 2006 real estate, Saint George report on foreclosures and general investment analysis.
To access the power point presentation off our website go to the in-line paragraph link we placed in the third paragraph of this article above. Hope we are keeping you abreast and alive about St George Utah real estate.
Reading Between the Lines
Our reading between the lines takes on the dimension of caution pertaining to what interest rates will do. But while caution seems to be invoked in the Summit report, I believe that it is mostly due, at least in part, for cautioning realtors and sellers to not be so ambitious as to what they can expect to get when our appreciation rates were among the most illustrious in this last year. Still the astute will read between the lines, that St George is St George's best kept secret in order to preserve our economic base- we are small and can only grow so fast people.
Bigger Homes, Bigger Inventory
To what degree have we overbuilt in our larger home department may be a good question to ask? Because my shopppers are noticing quite a bit of those on the market these days. Yet these days really ought to mean Nov. 2005 because as the graphs show, December and January are always slower.
St George Area Parade of Homes
We will see what happens in leau of our annual St. George Area Parade of Homeskick up to take place Feb. 17-26, 2006. Mostly, I am not worried about this year being a good year for real estate values, except for what interest rates will do.