Feb. 22, 2018

2018 What To Expect In The Salt Lake Housing Market

2018 What To Expect In The Salt Lake Housing Market

I am going to stick my neck out and make a few predictions. I may be right and I may be wrong. But I am going to call it as I see it. 

For the first time home owner an investment in real estate has been the best investment a person with little to no down payment could make. As the median home price has increased from $170.000 to $300,000, a small down payment of 10,000 in 2012 has turned into $130,000 of equity today. This is a yield of almost  1300% In hind sight, making an investment in home ownership was probably the best place a first time home buyer could place $10,000. In addition to these spectacular returns, all home owners who financed any portion of their home has enjoyed and may continue to enjoy fixed rates as low as 2.5% on a 30 year note.

At Crenshaw Realty, we believe that the years of spectacular returns are past. As interest rates begin to increase we believe that several things will change.

For the first time in several years, total sales volume decreased from 18046 in 2016 to 17895 in 2017, a total of 151 fewer home sales, or less than 1% decrease. The decrease is not a significant amount and alone gives no reason to predict the beginning of a trend.  However, we expect that total sales volume will continue to decrease for several reasons.

Home owners that currently own a home, have stable lives, and are currently employed have little incentive to move. 

Several economist anticipate that sales prices will continue to rise through 2018 due primarily to the lack of inventory. I agree with this anticipation. The question remains, how much will homes appreciate in 2018. We anticipate 3-5%

 

As interest rates and home prices increase, selling a home and losing the low interest rate with a higher loan amount is not financially favorable. Home owners over the most recent home ownership cycle have opted to stay in their homes for 7 instead of 5 years. As fewer individuals choose to sell, inventory levels will continue to decrease. This combination of higher interest rates, higher prices, and less inventory will lead to a slightly longer CDOM or Cummulative Days On Market. Meaning homes will take slightly longer to sell in 2018. This will be a continuation of a trend that started in 2017 as CDOM increased from 16.125 to 16.667. We believe CDOM will increase to 18-20 days. Buyers won't feel much difference as they submit offers on competitively priced homes.

 

With the standard deduction for 2018 taxes being substantially increased, owning a home is no longer required to reduce ones income and tax burden. As a result first time home buyers with incomes between $40k-$80khave less incentive to purchase a home for the interest deduction. Many of them prefer to live in a lifestyle that does not include a yard, and home to maintain. With prices increasing and interest rates increasing many of the affordable housing options are condo's, townhomes, and cluster homes similar to rentals. As a result, many of these would be first time home buyers will choose to continue renting and invest their money elsewhere. This allows them to continue with the lifestyle they desire and not be tied to a 30 year mortgage if/when the economy hits a rough spot.

We believe that many sellers will price their home too high and will be required to decrease the list price to entice a buyer. With less inventory, higher prices, higher interest rates, and fewer first time home buyers the Sales price to Original List Price ratio will continue it's decline from 2016 98.72% to 2017 98.55% to 2018 ending up around 98%

 So, in summary, home prices will continue to climb, although at a slower rate. Total sales volume will continue to decrease, though not noticeably from a practical point of view. CDOM will also increase slightly, and there will be more sellers that will be checked by the market and forced to drop their original list price in order to sell their home at a more moderate but still higher price than this past year. I would mark this year or next as the year the housing market in Salt Lake County plateaus or peaks with an impending economic recession that will start in 2019 or 2020.

Posted in Seller Tips
Oct. 23, 2017

Murray and Taylorsville Ranked 42nd Hottest Real Estate Market in the USA

Realtor.com Ranked the 84123 zipcode as the 42nd hottest real estate market in the USA. This places Crenshaw Realty's office in the center of the hottest real estate market in Utah. The 84123 zipcode include parts of Taylorsville and Murray. Some of the reasons people are drawn to this area are easy I-15 and I-215 access. This makes a commute to downtown about 15 minutes, and 25 minutes of anywhere in Salt Lake Valley. While Salt Lake County average home sales price is currently about 330k, the 84123 zip code is about 50k less at 280K.

Search for your next home in the 84123 zipcode here

June 6, 2017

Salt Lake housing forcast

As prices continue to rise to levels unseen before, we all wonder how long can prices increase, will they ever crash, and if they do, when? I have a strange hobby off searching for economic theory on housing cycles. It is strange. Uncommon. And seldom useful. But it is something that fascinates me. 

Currently I find myself aligning with the following theory: https://www.cato.org/publications/commentary/great-18year-real-estate-cycle

And here https://www.progress.org/articles/the-depression-of-2026

So at this point in time we have 7-8 years to buy, speculate, sell or pay off any borrowed funds for real estate in the national scene before an economic crash occurs. Each local economy is different. But here is a cool little chart that tracks which stage of the real estate cycle some of the largest US cities are in. Real Estate Economic Cycle

 Salt Lake City is to small to be on this chart, but on a future post I hope to be able to say where in phase 2 or 3 we are. What is fascinating is that there is no set duration for any of these phases, but we are definitely in the expansion and possibly getting ready to enter the exuberance stage of this cycle.

Posted in Statistics
March 30, 2017

Utah Crime

Here in Utah, we take crime seriously. Orem Police Department nabbed a shop lifter by posting a "missed connections" ad on Craigslist. With in an hour they had the believed suspect in custody, thanks to the numerous tips that began pouring in... 

http://www.ksl.com/?sid=43680528&nid=148&title=orem-police-place-missed-connection-ad-on-craigslist-to-snare-suspected-shoplifter

 

In Utah we celebrate our men in blue. Love that we can laugh while fighting crime.

Posted in Misc
Oct. 4, 2016

Santaquin's Summit Ridge

In Santaquin we don't have very many  well defined subdivisions. Provo has "the River Bottoms" Springville has the 55+ community of Springbrook Villas, Spanish Fork has "Spanish Trails"and others. Summit ridge in Santaquin is unique in that it is a planned community that includes several communities with varying sizes of lots and home sizes. The Codes Covenants and Restrictions keep each house looking distinct from others in the same community. The HOA fees are very low at $10/month with the primary purpose of maintaining the integrity of the community design and enforcing rules. This helps keep the community looking good.

Posted in Santaquin
Sept. 16, 2016

Crime Stats

I have been looking at Crime Statistics for different cities on City-data.com. It is interesting to see numbers. I have always felt safe in Santaquin and in general south Utah county, but I rationalized it was because this is where I grew up. The following are the latest crime index numbers published for different cities 287.5 is the average for the USA. A lower number means there is less criminal activity and a higher number indicates higher than average criminal activity.

Santaquin 2014 - 48.3

Payson 2012 - 191

Spanish Fork 2008 - 118

Salem 2011 - 66

Springville 2011 -192

Mapleton 2013 - 73

 

And for comparison some cities where others are moving from for a base of comparison

Provo 2013 - 184

 

Orem 2014 - 114

Lehi 2005 - 195

Sandy 2014 - 196

Salt Lake City - 565

West Jordan 2007 - 259

South Jordan 2006 - 136

Idaho Falls 2014 - 203

Boise 2014 - 195

Meridian 2005 - 199

L.A, CA 2014 - 256

Newport Beach, CA  2014 - 139

Las Vegas NV 2014 - 355

Henderson NV 2011 - 156

North Las Vegas 2005 - 514

Pheonix AZ 2014 - 390

Gilbert, AZ 2005 - 188

Scottsdale, AZ 2013 - 163

Glendale, AZ 2013 - 423

 

Posted in Statistics
Sept. 13, 2016

Santaquin Museum

Here is a well kept secret and true gem found in Santaquin. it is hiding in plain sight. We learned that my wife is related to one of Santaquin's original settlers. That she is related to a cousin's spouse. It is not open very often, but when it is be sure to take the opportunity to take a look at some of the items that demonstrate the way life was lived 50-100 years ago. 

 

 An old sitting room

 Fur Trappers cabin

 Some of Santaquin's original Post Office Boxes from the first Post Office in Santaquin.

 An old ironing Machine (could you imagine using this to iron your clothes?)

 An Old blacksmith shop

 Some now obsolete and to many incomprehensible Comptometer which my grandmother used to calculate payroll. Can you image the bewilderment people living at that time would have if we introduced a smart phone to them? Oh wait, these things were still widely used in the 70's and many of the people that used these things are using smart phones. 

It is fun to take a walk through history in the Santaquin Museum, make a donation, and let the person running it know how much you appreciate it.

Here is a link to the Museum's web site with times that it is open. http://www.santaquin.org/museum

March 3, 2016

Santaquin City Council 3/2/15

Quiet Zone

Santaquin has been working for 2 years on getting Union Pacific Railroad to create a "Quiet Zone" which would eliminate the horn that the trains are required to blow when approaching rail crossings. Union Pacific is requiring Santaquin to pay up to $10,000 to initiate studies and for an engineer to come to Santaquin. After the studies are complete Santaquin would be required to spend about $5,000 for signs and other safety measures. After the quiet zone is approved Union Pacific would need to conduct a new study every 3 years to insure safety. The cost of these future studies is unknown, or was not mentioned at the meeting.

Another concern that was brought up is the potential future need to take additional safety measures as traffic increases on these rail crossings. This may incur up to $40,000 of additional expenses when traffic increases and warrants additional safety measures.

 

Several of the council members were concerned about the cost of creating and maintaining the "Quiet Zone". The concern is that the noise does not bother all residents of Santaquin but only those near the railroad. There was mention of creating a special service district that could be created so those that are effected by the noise can pay for the quiet zone in their taxes. At this point in time it appeared as though there was not enough support from council members and the Mayor to create the quiet zone due to the costs associated with creating and maintaining the zone.  

Street Light

Again there was discussion about the street light that is proposed, approved, and funded on 200 W and Main. Council Member Jeffs expressed concern that the city of Santaquin would be better served by a streetlight on Center and Main street. She admits that as per UDOT criteria Center Street does not meet the required criteria for a street light while 2nd West does. She argues that it would be better to wait until Centers Street does meet the criteria than to rush and place a stop light on 2nd which would increase the amount of time needed to obtain a street light on Center Street. 

Protect Archeological Paintings

There are a few prehistoric rock paintings that have been vandalized and Mr Kester requested Santaquin to assist in protecting them. 

Action and Disclosure

Crenshaw Realty does not endorse nor oppose any action on these items, but instead believes that increased participation in city government creates a better community, increases property values, and empowers the citizens to have the City Governement serve them better.

I suggest that if any you have input on any of these matters, each member of the City Council would appreciate your input. The individuals you can speak to are:

  • Council Member Broadhead
  • Council Member Hathaway
  • Council Member Miller
  • Council Member Jeffs
  • Council Member Stevenson
Nov. 30, 2015

Protect Your Family From Lead In Your Home

Caution: Lead Based Paint

The older the home, the more likely it is to have lead based paint.  Lead was used in paint prior to 1978 when the Federal government banned it's use.  The paint, chips, and dust can pose serious health risks if not properly taken care of. If your home was built in 1978 or before then it may have this hazard. Here are some tips created the EPA, United States Consumer Product Safety Commission, and HUD.

If you think your home contains lead based paint, do the following:

? Get your young children tested for lead, even if they seem healthy.

? Wash children’s hands, bottles, pacifiers, and toys often.

? Make sure children eat healthy, low-fat foods. 

? Get your home checked for lead hazards.

? Regularly clean floors, window sills, and other surfaces.

? Wipe soil off shoes before entering house.

? Talk to your landlord about fixing surfaces with peeling or chipping paint.

? Take precautions to avoid exposure to lead dust when remodeling or renovating (call 1-800-424-LEAD for guidelines).

? Don’t use a belt-sander, propane torch, high temperature heat gun, scraper, or sandpaper on painted surfaces that may contain lead.

? Don’t try to remove lead-based paint yourself.  

For the complete pamphlet on lead based paint, see the EPA web site. 

Posted in Buyer Tips
Nov. 9, 2015

5 Keys To Your Best Home Buying Experience

Home Search

It's not everyday you purchase a home.  For most people buying a home is an exciting, yet stressful time.  Avoid potential problems by taking the following steps:

1. Know how much house you can afford. 

One of the first things you as a buyer should do is talk to a qualified lender and get pre-approved. If you don't know how much house you can afford, you risk falling in love with one you can't.

2. Don't let your true feelings show.

No matter how much you've fallen in love with a house, be sure not to let the seller's agent know. Otherwise, they will have the upper hand in negotiations.  Leave the negotiating to us.  Crenshaw Realty's agents are excellent negotiators and will get you the best deal possible. 

3. Understand that your first offer may not get accepted.

When a home is priced well in Utah county, there will usually be multiple people making offers for it.  You can't assume that your offer will automatically be accepted.  Don't be discouraged if you lose out on the first or second property you make an offer on.  There will always be other good properties that come on the market.

4. Get the home inspected.

You may be provided with a property disclosure form from the seller, but he may not be aware of all of the problems or may not be completely truthful.   Often buyers will skip inspecting the crawl space, attic, and roof when viewing a property.  Professional inspectors are non-biased and will provide you with a thorough inspection report.  This will take some of the emotion out of the decision and and save you from unpleasant surprises later on. 

 5. Anticipate additional costs of maintaining a home.

Roofs sometimes leak.  Carpets wear out.  Pipes can get rusty.  Many home buyers underestimate the additional costs for maintaining and repairing a home.  When purchasing a home, consider it's age and how well the previous owners treated it.  It is wise to set aside money each year for home maintenance and repairs.  This will protect your home/investment and the money you've put into it.

 

Posted in Buyer Tips