Wednesday October 8, 2014:
Multiple Offers in SLC:
During the last two months I listed three homes for sale in SLC, and all three went under contract within 5 to 10 days of being listed. One home had 7 showing and 1 offer in 5 days, the second had 7 showings and 2 offers in 5 days and the third had 17 showings and 2 offers in 10 days. The first two homes are in Liberty Wells just south of Liberty Park near my house and were listed at $204,900 and $259,900. The third home is in the Avenues and was listed at $369,900. All three homes were priced right and were prepared for sale so they showed very well.
I’ve recently spoke to a few of my colleagues and I know of two other homes, both in the Avenues of SLC, that were priced in the mid $300k’s that also had multiple offers during the last 45 days.
I’ve seen this type of movement before in 2004, in the neighborhoods of Salt Lake City. Homes in the city were hot 9 months before the rest of the market took off in the spring of 2005. We’ll see if this bellwether holds true in spring 2015.
Interest Rates:
In November 2013, Lawrence Yun, chief economist for the National Association of Realtors was predicting that interest rates would be approaching 5.4% by the end of 2014. We aren’t at the end of 2014 yet, but so far that hasn’t happened.
Freddiemac.com shows that the 30-year conventional fixed rate mortgage has held between 4.1 and 4.2% since May 2014.
Since 2009, we have had the lowest 30-year conventional fixed rate mortgages on the Freddiemac chart going back 43 years to 1971. From 1971 to 2008 the 30-year fixed rate mortgage never fell below 5%.
The U.S. unemployment rate dropped to 5.9% in September 2014. It was 7.3% in September 2013. So the economy is coming back, however wages are sluggish.
Quantitative Easing 3, the Federal Reserve’s policy of buying mortgage-backed securities, has been winding down this year and it’s possible that October 2014 will be the last month for this policy.
Yesterday, billionaire Warren Buffett said at a conference hosted by Fortune Magazine, that he is puzzled by the sluggish rebound in home construction in the U.S. with mortgage interest rates so low and the economy recovering. He was quoted as saying, “You would think people would be lining up now for mortgages to buy a home”.
How much longer will interest rates be this low? That’s a hard question to answer, but I just refinanced my own property, so that tells you what I think.
The Salt Lake County Housing Market:
The 3rd quarter 2014 median sales price for a single family home in Salt Lake County increased by 1.2% since the 3rd quarter of 2013. Condos and townhomes went up 5.4% during that time.
If you look at the bigger picture, the median sales price for a single family home in Salt Lake County increased 34.2% from April 1, 2012 to September 30, 2103.
So overall, our local real estate market values have been flat during the last year.
My Best Guess:
This part of the SLC Homes News is called the “My Best Guess” column and not my advice column, because it’s hard to say for sure regarding predictions of any kind and everyone’s situation is unique.
If you already own a home and your interest rate is above 5% or if you have a HELOC with a variable rate, I’d consider refinancing now. If you need to know what your home is worth to determine if you have enough equity to refinance, contact me and I’ll run the numbers for you.
If you want to buy your first home, I’d start working on that ASAP. If you’re not sure if you are in a good enough financial position, have questions about your credit or if you’re not sure how much you can afford, contact me and I’ll refer you to an experienced lender to get you started.
If I already owned a home and had a want or need to sell in the next 6 to 9 months, I’d be listing my home for sale this spring. Daylight savings changes on Sunday March 8, 2015 and that’s a good early target, because when the clock springs ahead, there is more daylight after work for buyers to look at homes, so activity naturally picks up. If you’re wondering what your home is worth now and want to track the value or want to figure out what to do to prepare your home for sale, give me a call.
If I was considering selling my existing home to buy another home, the timing depends on your unique situation, but I would start sooner rather than later on figuring out your financial situation, preparing your current homes for sale and looking at what’s available in your price range for your next home. If you’d like some guidance or just want to bounce your ideas off me, call or send me an email.
If you found this article interesting and would like to keep up to date with the Salt Lake County real estate market, I post a couple times a week on my SLC Homes Facebook page which is at:
https://www.facebook.com/SLCHomesNews
Thank you!
Kev
