Monday, December 21, 2009

Utah Real Estate - Home Sales, Prices & Interest Rates

Utah Home Sales

In Utah, real estate sales were up 2% for the third quarter of the year compared to the year before. Along the Wasatch front, home sales were up 25% in October over the previous years month of October. On the national level, for the last nine consecutive months pending home sales have been on the rise.

Utah Real Estate Prices

The director of the University of Utah's Bureau of Housing and Economic Development, James Wood, at a meeting of the Utah Association of REALTORS Convention, said that he believes housing prices for Utah reached their low point and bottomed in the first quarter of this year of 2009.

Nationally speaking there seems to be consensus among economists that housing sales have reached a bottom. However, the views are varied regarding the degree of stabilization with some saying that the bottom for prices may continue as long as into mid-2010. Mark Zandi, chief economist and co-founder of Moody's who originally forecasted the bottom of prices this year and now projects them into mid-2010, says that the Obama administration's loan modification plan delayed a number of foreclosures that are likely to hit the market next spring, extending the price drops. You can read all about the Utah & St George Real Estate Neighborhood Stabilization Program Reform Act in our previous blog post. Whether this has anything to do with it or not, Zandi is pointing to the way in which we slow foreclosures happening, are of course having repercussions in extending the time it takes for home prices to completely stop declining. Most economist are connecting the bottom of house prices, as being closely tied to the share of distressed home sales declining.

St George Real Estate
Prices in Southwest Utah, namely, the St George real estate area market, has historically seen a quick spike in prices, with a drastic windfall of price depreciation. As such, many locals believe prices have reached a bottom and in some neighborhoods price appreciation, or at least rebounding of prices, has been felt. Statistics for the Washington County Utah area have shown some decrease in Notice of Defaults, which are the pending notices of buyers that are not being able to make their house payments any more- the prelude to our St George foreclosures and subsequent depreciation of home prices.

Utah Interest Rates

Utah home buyers have enjoyed low interest rates over the last year. This has been impacted largely by the Fed with their Mortgage Backed Security (MBS) purchase program... the program that has helped keep home loan rates low for much of the last year. Just this last week the Fed has announced that this program will end on March 31, 2010. What are the implications of this?

It's Economics 101... when Bond prices start to decrease from the diminishing demand of the Fed's purchases, home loan rates will naturally be likely to increase.

Bottom Line
The bottom line is that with all the tax credits available for buying, with interest rates being perhaps unsustainabley low, that buying Utah real estate now or this coming Spring of 2010 may be the very best time to buy before interest rates go up.

1 comment:

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