IS IT A BUYERS MARKET IN UTAH?

With the current housing dilemmas appearing to be longer lasting than most anticipated, I have been wondering about the current state of the mortgage market, particularly in Utah.

Traditionally spring is the most active time of the year for home purchases. We see refinance applications rise slightly through the summer, but the spring is for buying. Now, with a larger number of homes on the market and with home values declining nationally, the general consensus according to the various housing and real estate “expert” around the country is that we are in a Buyers Market. The funny thing is, as I have been saying all along, Utah is not on the same wavelengths as the rest of the nation. So is it a buyers market now?

What about Utah?

According to the National Association of Realtors (NAR), existing home sales are down nearly 28% from a year ago. In addition, the NAR reports that existing home sales prices are down 8% from a year ago. Does that make it a buyers market?

Recent articles in local newspapers have highlighted the fact that while existing home sales in Utah are down approximately 30% when compared to last year, the average sales prices actually increased—with a state wide average of 12% appreciation. In fact, according to the Utah Association of Realtor some areas of the state experienced appreciation of over 15% in the past year.

What does this tell me? I guess it all depends on how you define the term “buyers market.” In simple terms of supply and demand one would assume that the increase in home inventory when compared to the decrease in the number of existing home sales would have a downward pressure on home sale prices, making it a buyers market.

Then again . . .

On the other hand, multiple state economic statistics would indicate that it is still a good time to sell. The Utah Association of Realtors has a new website (www.utahhousingfacts.com) that lists several reasons why it is a good time to sell in Utah. Here are 3 of the most significant in my view:

1. Utah has a growing population, with an increase of 84,000 people anticipated for 2008.
2. Utah is increasing the total number of jobs at a pace that exceeds the rest of the nation with 44,000 new jobs expected to be created in 2008.
3. Utah unemployment is nearly half of the national average.

So what does it all mean?

My feeling is that while it is more difficult to sell a home in Utah right now than previously, we are nowhere near the “buyer’s market” that many would have you believe.

If I were buying a home I would take advantage of the increased inventory and shop around. I would not feel pressure to make an offer right away on a home because I realize that there are more homes for me to consider than ever before. However, I would not assume that just because someone has had their home on the market for a longer than normal period of time that I can lowball my offer.

If I were selling a home in Utah (which I, in fact, happen to be doing) I would not panic, but I would accept that it may take many months longer than anticipated. If I need to move, I would not rule out looking for someone to rent my current home, nor would I rule out renting in my new location for a few months (but I would look for a rent-to-own in both cases). Perhaps most important, if I were selling a home in Utah right now I would start the process much earlier than before, giving myself an extra few months to find the right buyer.