Salt Lake City UT Real Estate Guide

March 2008

Sunday, March 30, 2008 - Salt Lake City UT Real Estate Will Home Prices Come Down?

What is happening to home prices in Salt Lake City?

It is amazing to me. I'm still talking to buyers who are thinking prices are still coming down. When will the bottom hit? What is the bottom? How will you recognize it when it's here? How will you know when it's over? You know the reality is, is that even in a sellers market, prices get reduced. I think a buyer will see a price drop, and immediatley they think "oh, the sky isn't done falling" LOL. It's just plain crazy.

Buyers who are trying to time the bottom, will end up missing it before they even know it's come and gone! Fact is, trying to make finite predictions on the market with pin-point accuracy is impossible. There are just too many variables, there is no way anyone from the public could tell what is going on, and many so-called real estate professionals can't tell either. Oh hell, everyone thinks they have their pulse on the market, and they understand this and that, and that when the FED lowers interest rates, mortgage rates should fall (as if they are the same thing), and there otta be law for this, and on and on and on.

There are many things that have to happen in order for a buyer to buy a home, and that is how they have to happen, ...in order. By the time buyers get their #@$% together to buy, they usually have already missed the best buy. I've missed a hundred best buys. If only...Shoulda...woulda....coulda.....

Which homes and which neighborhoods are popular? What is selling and what isn't? What price bracket sells the quickest? What holds it value longer? What has the greatest resale value? When should I buy? Where should I buy? Who knows the answers to these questions? Who knows how to find the answers to these questions? Where are the answers to these questions? And, when can I get the answer to these questions?

If you don't have to drive your car anywhere, you don't really need to buy gas for it. If you have to drive across town, and you're low on gas, when's the best time to buy gas? Would you just buy enough to get across town, or would you fill up? Would you risk driving across town without getting gas, not getting to your destination because you're sure gas is going to drop tomorrow by a nickel?

This just came out from my lender....
EFFECTIVE MARCH 31, 2008, THE MAXIMUM LTV FOR CONVENTIONAL MORTAGAGES WILL BE 97%. NO MORE FLEX 100 OR MY COMMUNITY MORTGAGE 100. THE MINIMUM FICO SCORE FOR THESE 97% LTV PROGRAMS IS 680.

EFFECTIVE APRIL 11, 2008, UTAH HOUSING WILL RAISE THE MIMIMUM CREDIT SCORE REQUIREMENT TO 660.

AS OF RIGHT NOW, WE CAN STILL DO FHA LOANS WITH DOWN PAYMENT ASSISTANCE PROGRAMS SUCH AS NEHEMIAH.

When is the bottom for mortgages gonna hit? Let's hold off buying until there are no downpayment assistant programs. When will that happen?

Guess what? Nehemiah will be going away soon too. The writing is on the wall. Whle you are waiting for the bottom to bottom out, you are losing money because you're paying rent instead.

You could already be building equity in a home...yes that's right, appreciation is still happening, and writing off your mortgage interest, but no, you had to wait for the bottom. Rising interest rates could cost you more than the money you might save by waiting for the bottom to hit. Even worse, you could lose the ability to qualify for years while waiting for the bottom to hit. And last but not least, it is far easier to absorb 5 or 10 K or even 20K over 30 years than it is to have to come up with an extra 100 dollars every 30 days.

The time to buy is now. The time to sell is now. Bottoms Up! Oh, and by the way, if you really want the answer to these questions, call me. I know.

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Wednesday, March 26, 2008 - Homes sales in Salt Lake rising steadily

Here it is! This weeks market stats for Salt Lake.

We have 7457 active listings, and 2543 of those were listed in the last 30 days.
1026 have gone pending, while 1574 have expired. We sold 860 homes in the last thirty days, that's up 29 from last week. Slow but steady, that's a good thing.

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Thursday, March 20, 2008 - Salt Lake City UT Real Estate Market Statistics for March 20, 2008

Here's the latest sales stats for the greater Salt Lake City UT real estate market.
The market continues to improve, even with the roller coast ride we are experiencing in the mortgage arena. So far the inventory is holding fairly steady, we have been adding about a hundred new listings every week. The number of sales have increased every week, and our absorption rate is dropping every week. All good signs that indicate an improving market. Still a very strong buyers market.

Average tme on market for Salt Lake county is 59 days, less in the lower price brackets, and more in the higher price brackets.

Currently 7357 active listings in Salt Lake county.
2556 were listed in the last 30 days.
1094 properties were put under contract or pending.
1094 properties have expired.
831 propertieswere sold or closed in the last 30 days.
If we continue at this current rate, we have about an 8 month supply of property.

If you are thinking of selling or buyind, contact me to see what this means for your specific area, and price bracket.

20-Mar	Salt Lake 1
	Active	7357
	Active -30	2556
	U/C -30	1094
	Expired	1650
	Sold	831
	Supply	8.85

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Tuesday, March 11, 2008 - Salt Lake City UT Real Estate, Homes sold per quarter

Here's this weeks stats for the greater Salt Lake City UT Real Estate market, and all of Salt Lake County.
As you can see if you view some of my older posts, the market is steadily improving!

12-Mar Salt Lake 1

Active 7217

Active -30 2399

U/C -30 1052

Expired 1721

Sold 753

Supply 9.58

Graph showing Salt Lake County Homes Sold per quarter.

The green line is total number of homes listed
The blue line is average sold price
The red line is total number of homes sold

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Thursday, March 6, 2008 - Salt Lake City Ut Real Estate Market Summary for Home Sales

Below is a summary of what has been happening in Salt Lake County and the greater Salt Lake City UT Real Estate market. For questions, feel free to email me. As you can see, we're still in a strong buyers market, but overall, the market is improving.

1/17/2008 Salt Lake 1

Active 7102

Active -30 2575

U/C -30 827

Expired 1808

Sold 550

Supply 12.91

2/1/2008 Salt Lake 1

Active 7098

Active -30 2572

U/C -30 831

Expired 1975

Sold 534

Supply 13.29

2/7/2008 Salt Lake 1

Active 7136

Active -30 2532

U/C -30 817

Expired 1852

Sold 544

Supply 13.12

15-Feb Salt Lake 1

Active 7106

Active -30 2414

U/C -30 917

Expired 1814

Sold 582

Supply 12.21

20-Feb Salt Lake 1

Active 7082

Active -30 2339

U/C -30 965

Expired 1708

Sold 601

Supply 11.78

6-Mar Salt Lake 1

Active 7106

Active -30 2297

U/C -30 985

Expired 1732

Sold 696

Supply 10.21

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Thursday, March 6, 2008 - FHA Loan limits for Salt Lake City UT Real Estate

The FHA loan limits for the Salt Lake City UT area and all of Salt Lake County have been increased to $729,750 !!!

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Monday, March 3, 2008 - Should I buy now in Salt Lake City? Or wait? Is now the time to buy a home?

Should I buy now? Or should I wait for a while? Will prices come down? Will interest rates go up or stay down? These are the questions buyers here in the Salt Lake City Utah area and all over the country are asking right now. If we examine our interest rates, and the cost of having a loan and compare that to what we might possibly buy a home for, the answer becomes clearer.

For our exercise, lets assume some numbers. First, our loan amount will be $200,000 for a fixed 30 year term with a total of 360 payments. Down payment requirements are typically 3% for an FHA loan and 5% for a conventional loan. Let's assume we're doing conventional financing, and our downpayment will be 5% of the purchase price. If our loan amount is 200,000, that means our purchase will be $210,526. A 5% down payment is $10,526, making our loan amount $200,000. Our property taxes currently are $1500 annually or $125 per month, and our hazard insurance premium is $450 annually or $37.5 per month.

Here we go....

30 year fixed Conventional loan...

Term	30	30	30	30
Interest	5.00%	5.50%	5.75%	6.00%
Loan Amount	$200,000.00	$200,000.00	$200,000.00	$200,000.00
Annual Tax	$1,500.00	$1,500.00	$1,500.00	$1,500.00
Annual Insurance	$450.00	$450.00	$450.00	$450.00

Monthly P&I	$1,073.64	$1,135.57	$1,167.14	$1,199.10
Monthly Tax	$125.00	$125.00	$125.00	$125.00
Monthly Insurance	$37.50	$37.50	$37.50	$37.50
Total Payment	$1,236.14	$1,298.07	$1,329.64	$1,361.60

Total Interest 5 years	$48,076.06	53,055.89	$55,553.12	$58,054.78
Total Interest 10 years	$91,521.32	$101,351.34	$106,297.78	$111,263.58
Total Interest 30 years	$186,511.57	$208,808.08	$220,172.46	$231,676.38


Term	30	30	30
Interest	6.50%	7.00%	8.00%
Loan Amount	$200,000.00	$200,000.00	$200,000.00
Annual Tax	$1,500.00	$1,500.00	$1,500.00
Annual Insurance	$450.00	$450.00	$450.00

Monthly P&I	$1,264.13	$1,330.60	$1,467.52
Monthly Tax	$125.00	$125.00	$125.00
Monthly Insurance	$37.50	$37.50	$37.50
Total Payment	$1,426.63	$1,493.10	$1,630.02

Total Interest 5 years	$63,070.12	$68,099.48	$78,191.46
Total Interest 10 years	$121,248.58	$131,297.37	$151,552.91
Total Interest 30 years	$255,088.98	$279,017.80	$328,310.49

It's a no brainer, the best time to buy is when the interest rates are down, and home prices are down. What is happening right now in the Salt Lake City real estate market is that many buyers are sitting on the fence, wondering whether home prices will come down, how far they'll drop, and when they'll drop.

If we are currently approved for up to $215,000 and the interest rates are 5.5%, we're looking at atotal monthly payment of $1298.07. If we miss the boat, and on't lock our loan, and rates go up just 1%, to 6.5%, we now have a monthly payment of $1426.63. That is a monthly increase of $128.56. For buyers who are already buying at the top of their comfort range, that increase may put that particular home out of their reach. Now maybe we're thinking home prices are going to drop by say 5%. That would be a 10,000 drop, or maybe 10%, which would be 20,000. Let's look at what it could cost us in interest waiting for a home price to drop.

Most first time home buyers will become move-up buyers within 3-7 years after purchasing their first home. After paying on your mortgage for 5 years at 5.5% you will have paid $53,055.89 in interest, and if you missed the boat, and got stuck with 6.5%, you will have paid $63,070.12, plus your house payment went up $128.56. Now, if you have had some financial difficulties since buying your first home, and are not able to move-up at five years, and have to wait until the tenth year to move up, the interest become even more astounding. Interst paid at 5.5% at year ten is $101,351.34, and at 6.5% is 121,248.58. Interest paid is money you paid to the bank for loaning you the money to purchase your home.

When you consider these numbers, is it really worth the risk of losing the great interest rate to save a few thousand dollars on a home? Unless you are looking at values decreasing by at least 10%, it just doesn't add up. For first time home buyers, these numbers are particularly critical. Why? Well, if you have $1300.00 max for a payment in your budget, and interest rates go up, that means you can no longer buy a home in the price range you were looking in.

You will have to "downgrade" the homes you are looking at, and that can become very frustrating very quickly if quality homes are in short supply for that price range. If $1298.07 was the max for your monthly payment, at 5.5% you could buy a home up to about $210,000. If the interest rates jumps up to 6.5, in order to keep that same payment you would only be able to borrow approximatley $180,000, which equates to a purchase price of about $189,000. That is a whopping $20,000 difference in what you could qualify for!

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