Last year at this time our world abruptly changed. The ground shook, restaurants closed, concerts were cancelled, ski resorts shut down, people started hoarding toilet paper and things we didn’t know we needed before, like masks, were impossible to find.
As the year continued and people started spending more time at home and outside recreating, we had shortages of hard goods, like bicycles, campers, building supplies, appliances, homes and condos.
Per a recent article in the New York Times “Where Have All the Houses Gone?”, from the beginning of 2016 to the end of 2019, the number of homes for sale in the U.S. was in the range of 1,000,000 to 1,300,000 homes. By February 2021, the total number of homes for sale in the US had declined to 468,000 units.
This national shortage of housing for sale is yet another layer of resistance to people listing their homes for sale in order to move to a new city.
Soon everyone who wants a vaccine will have one and the economy will open back up. I’m guessing this will lead to more people listing their homes for sale, but I think the backlog of buyers as a result of the housing shortage will make getting back to a normal level of inventory of homes for sale, a long process and will likely take at least as long as it took to get here, and probably longer.
So is a bubble forming? Yes, our local market has appreciated for nine years in a row. Is that bubble ready to Burst? Not at this point, and probably not for quite a while due to lack of inventory of homes for sale and high buyer demand.
Right now the competition to buy a home is intense. Here’s what’s happening:
- There are more cash buyers than usual in Salt Lake County, with about 15% of all homes sold so far this year selling to cash buyers compared to 10% in 2020.
- Buyers are making offers with non-refundable earnest money. So whether they buy the house or not, the seller gets all or a portion of the buyer’s earnest money.
- Buyers are offering purchase prices that are more than a home has a chance to appraise for in order to be the first position buyer.
- Buyers are offering to bring extra cash in addition to their down payment, in order to overcome a low appraisal.
- Buyers are waiving contingencies such as due diligence, appraisal and in some cases the financing condition to make their offer similar to a cash offer.
- It’s hard to compete with anything less than a 20% down conventional loan.
Protecting the Title to your home:
A friend of mine recently asked me if it was worth getting Life Lock for the title to your home, to protect yourself against identity thieves. I wasn’t sure what I thought of that, so I looked into it and you can purchase the service for about $100 per year.
While I was searching for alternatives I came across a new free service called Property Watch, which is offered though the Salt Lake County Recorder’s Office.
I signed up for this. You enter your property address, name and email address and they will email you an alert if anyone tries to record any documents on your title including liens and deeds. Here’s the link:
https://slco.org/data-services/PropertyWatch/PropertyWatch.aspx
These are crazy times right now, and having an experienced full service Realtor pays off. I get involved with most of my clients months before they list their home for sale or start searching for a home.
If you want to start to plan, or just want to talk real estate, contact me. It’s always great to catch up and connect with old friends and talk about their real estate needs!
Thanks and have a Happy Saint Patrick’s Day!
Kev
Kevin Coyle
REALTOR BROKER MBA CRS
SLC Homes
E: Kevin@SLCHomes.com
M: (801) 243-0699
“Providing Representation for Home Buyers & Sellers throughout Salt Lake”
