Real Estate Information Archive

Some of you may remember my post “Your Agent was trying to help you when they said Short Sales Suck!” from May 2008.

Nearly 2 years have passed from that day and in many ways, Short Sales still DO suck, but their time of “sucky-ness” (don’t look that up, NOT a word) may be soon coming to an end.

As we are all so very aware, the Federal Government has decided to stick their fingers in just about everything we do with the exception of which sugar cereal we feed to our children. (that’s probably coming…)

In a rare flash of brilliance, some of their new legislation could actually be the best thing to hit Buyers, Sellers and Real Estate in General in a long time.

The problem with short sales has always been summed up in a few major points:

• Short Sales take too long (as in 3 to as many as 10 months!)
• The eventual outcome of the Buyer’s original offer is always unknown (The chances of actually getting the home you offered on was a literal craps shoot)
• They were a miserable ton of work for every single person involved in the transaction

See, the bank that the Seller is no longer making a mortgage payment to (in most cases) typically hasn’t APPROVED the sale of the home at the list price. So Buyers come along looking at a home listed for $150k that the bank may only let go for $170k. That’s just not right, totally confusing and emotionally painful.

New legislation proposed by the US Treasury would make the following changes to the Short Sale process:

1)      Banks would be FORCED to respond in 10 days or less! (Vs. 30-90 in a typical case)

2)      Sellers – yes, the SELLERS who couldn’t pay their mortgages could possibly get up to $1500 for relocation costs

3)      1^st Mortgage Holders could get $1000 per closed short sale

4)      2^nd Mortgage Holders (the stickiest short-sale killers in the business) could get $3000 per closed sale

Will this come to pass? I don’t know. You can bet they will be taking money from mine and your pockets to fund the plan though, which is one of the negative side-effects of the plan. Does the “disease merit the treatment?”

Shoot me some feedback.

BUYERS – have you been involved in trying to secure a short sale? What kind of experience was it?

SELLERS – are you in that same position? Honestly, is it a HUGE pain in the neck or what?

"But Jeremy, I offered above full list price and STILL got beat out! What gives?

If I had $5 for every Buyer who has been shocked (and dismayed) about having to "compete" for homes in this so-called "Buyer's" market, I'd have a nice little vacation fund built up.

Today we talk about

• the "Tale of 2 Markets", those listings that are "in" the market, and those that are "out" of the market;
• why Buyers are getting into bidding wars in St. George, Utah as well as other Western markets,
• and also why Sellers have to get in the "critical 20%" if they are going to sell.

Below this video is a copy of the chart I discuss in the video. Enjoy!

The tides are a turnin' in many parts of the St. George area real estate market this month! Friends and clients on my mailing list have been hearing about this for the past few months and the positive news keeps coming.

In an article from today's "Spectrum" newspaper titled "Local Economy Stabilizing", local & regional economist Lecia Langston said Washington County's economy is beginning to stabilize. Well it's about time!

For so long our area was "insulated" from the major ebbs and flows of the economy, feeling only a percentage of the cyclical changes that may have been felt in other major metropolitan areas. Why? Well if you live here you know the answer, and if you are moving here you also understand. Great location, weather, scenery, national parks, low crime, the works!

Outside of all the economists' hard-to-understand charts and graphs, what we are seeing "on the ground" is this: Properties hitting the market and selling in a few days or less for list or even above list price, with the final price and terms being determined through a "bidding war." (see this WSJ article on just that: BIDDING WARS)

Here are some hard figures to consider:

1. "Pending" sales up nearly 40% since February. All of the major financial and housing experts use pending sales as a major indicator of housing market health.

2. "Active" listings down 12% in that same time frame. Real estate, just like handguns and hammers, is about supply and demand. Lower supply is what we want.

There is still a TON of foreclosure inventory coming, but I think this is a good thing. Why? Because every well-priced home that hits the market right now, especially under $300k, is selling in just a few days. This tells us the public is finally ready to pull the proverbial trigger and get into the housing market.

Housing has always driven the rest of the financial markets. When people are buying, sellers are getting paid and spending that $$ on other homes, goods and services. In that process, real estate agents, title and mortgage people also get paid. They in turn spend money, and the eternal sales cycle continues.

Please feel free to comment or ask questions on this page about the figures above, as well as your personal opinions about the market. Onward!

Some time back I posted an entry titled "If I Gave you $10,000  to Buy a House, would you do it?"  I was of course referring to the St. George / Washington County Home Buyer "grant" of $10,000. It was exciting news for sure.....at the time.

That news now pales in comparison of the combined incentives available for buyers in this current market, particlularly FIRST TIME home buyers (defined as anyone who has not owned a home in the past 3 years.)

Let's take a brief look at those options:

$8000.00 First-time home buyer tax credit - Detailed summary HERE.

You literally get either an $8000.00 check from the US Govt, or a credit in the same amount against your tax liability if you buy a home between Jan 1, 2009 and Dec 31, 2009. (Assume you owe nothing in taxes, you're getting $8k. Assume you owe say $4000.00, you're getting $4000.00)

Who gets it? First-time home buyers only. Does it have to be paid back? NO. The "old" tax credit (from way back in the pre-historic age of 2008 and President Bush) was $7500.00 and had to be paid back. Not this one, it is yours to fix your home up, go to Disneyland, stuff in a mattress, whatever.....forever. Income qualifications are broad and very few will make too much for this.

$10,000 Home buying grant in Washington County / St. George -Email us for Details

This is an income qualified "grant" and also depends on how many people in your household. If you are couple with no children, $32,000 is the cutoff. I believe it goes up $5000.00 per child thereafter. The key stipulation with this program is that is has to be paid back in full if you sell or refinance the home in the first 15 years after.

$6000.00 Utah "Home Run" New Homes Grant - Just signed into law LAST NIGHT by Governor Jon Hunstman. Detailed summary HERE.

There are only 1600 of these babies available and then the pot of gold is gone. The funding comes from President Obama's stimulus package and the $$ that was allotted to Utah. The premis is this: Offer a $6000.00 incentive to those who buy a vacant, never-been-lived-in home, so we can get some of this vacant inventory "mopped up.'

Unlike the Washington County incentive, this does NOT have to be paid back and income limits are HIGH: $75,000 for individuals and $150,000 for married couples.

Total Incentives to buy: $24,000

Kind of makes me wish I were buying....

Not only that, it has also upset alot of people who feel like their hard-earned tax dollars are being used to pay their neighbors an incentive to go buy a home. There is some truth to that I'm sure, but as a member of the industry who looks at vacant homes all day long I have to support these measures.

Additionally, we have actually arrived at a place where owning IS cheaper than renting for many people, and if not literally so, it is effectively the case based on all of the tax benefits of owning a home. (not to mention getting an $8000.00 check after closing!)

Sorry to sound like just another home-peddling realtor, but we are truly heading into the "Perfect Home-Buying Storm." I read a report this week that showed the following: Since they began tracking interest rates in 1971, obtaining a (legitimate) loan has never been more affordable....ever. Add to that (now) low pricing and these incentives and I can't see why a qualified individual would wait.....for what?!

In closing, let me illustrate how these incentives "hit home." I put a contract together on a foreclosed property with a young first-time buying family just yesterday. The home had been on the market JUST 1 day and will need several thousand in maintenance items to be really "livable" by most people's standards, (carpet, paint, some appliances, yard cleanup, etc).

Now the average family buying their first home will do everything they can to come up wtih their downpayment, but as for making alot of repairs, which almost all foreclosures require, most people don't have it!

As a young family with 1 baby and consistent, but "limited" income, that $8000.00 will come in very handy for them.

What say you?

Look, I'm not going to sugarcoat this: Sales were down in September, the Economy is a mess and the Media isn't helping in any way shape or form. This is what Washington County Real Estate Sales have looked like for the past 3 months:

That last column is what we call the "absorption rate." 28 months of inventory was not good. 34 months of inventory is LESS good.

The flip side?

• Credit actually IS available and we continue to see people buy and sell homes.
• There are so many good stories out there, but nobody is telling them.

We just sold a home for 3 sisters from Idaho. They had held this condo in their family for many years and made a nifty profit. They were REALLY happy and it was closed and recorded just 38 days after it hit the market.

We assisted another young couple get into their first home last month and they are tickled pink. It was a bank-owned property, priced extremely well, and it got them out of a small apartment.

Then there is another family living in my immediate neighborhood whose' house is under contract to close sometime next week. They have owned it for 3-4 years, will take a nice little profit, use it to pay off some debt, then rent a larger home for a while preparing to buy again down the road.

I understand it is tough right now...BOY do I understand it. However, there really are good things happening for some people, housing values are getting back in line for the "everyman" and tremendous opportunities are surfacing for investors.

When all else fails I count my blessings every day to have a wonderful wife, 4 hilarious little kids and for every chance I get to enjoy the simple pleasure of pedaling and suffering on my mountain bike or road bike.

If you have any good, OR bad stories to tell about this market is affecting you, send them on over.

I'll keep this short: Existing-home sales rose from the first quarter in 13 states, apparently from buyers responding to discounted home prices, according to the latest quarterly survey by the National Association of Realtors®. Nearly 25% of metropolitan areas showed rising home prices in the 2nd quarter from a year ago, with greatly mixed conditions continuing around the country.

In the West, the median existing single-family home price was $290,600 in the second quarter, which is 17.4 percent below a year ago. After Yakima, the strongest metro price increase in the West was in the Salt Lake City area, at $234,200, up 0.5 percent from a year ago; all other metro areas reported for the West were down from the second quarter of 2007.

What does this mean for Washington County? Perhaps nothing as "all real estate is local", but perhaps something based on the general activity level that exists currently in our local market. In the marketing of our Larkin Group Listings, we use a varitey of tools to track everything from the total number of buyer calls and visits, to the media source they originated from. (I often feel a bit like "Big Brother...")

From this data I can that the Buyers are OUT THERE. They are calling, surfing the web, following prices, trying to figure out "what to do."  Whereas 1 year ago there was just a sense in the "trenches" of the business that the Buyers were hiding out.

I'd love your opinion.....has anyone else out there gotten the sense that prices have finally reached a level that actually makes sense for today's fence-sitting buyers?