Friends and Clients —
What distance could you confidently SPRINT for? I don’t mean a jog, or even an energetic “skip”, I’m talking about an ALL OUT, “I’ve got that metallic taste in my mouth and might vomit and…why did I do that?!” sprint
Right. 100 yards…maybe 200 if you’re an ELITE, “Usain Bolt” athlete. Maybe 20 yards if you’re like me and prefer riding a bike
I’ll explain what that means in the real estate market momentarily. But first, let me give you a quick rundown of current real estate conditions:
1. Prices at all-time highs
For the past several years, home prices grew at twice the rate of inflation and faster than incomes. Not surprisingly, we are now at record price levels.
From 2006 – 2011 Washington County saw a 46% drop in home values…yeah, it was ugly.
We didn’t think values would EVER get back there, much less get back there in less than a decade!
Since 2012 Washington County home values are back up an average of 42%! Nearly at peak “boom” levels. And I digress back into the sprint
Our market cannot sustain that pace forever. Just like a car, or human body, it eventually just keels over. We saw it in the late 2000’s with epic rates of foreclosure, bankruptcy and general economic pain.
Thankfully, home price growth has definitely been slowing over the past several months. And we're even seeing some softness in the market, with an increasing number of price cuts.
2. Mortgage rates rising…and falling…and…who knows what’s next?!
The current 30-year fixed mortgage rate stands at 4.75%. That's almost a 1% increase over just a year ago and the highest level we've seen since 2011.And yet you realize that the HISTORIC AVERAGE is over 8%?? Rates are wildly attractive with that perspective.
3. Dropping affordability and demand
Combined with current high prices, any rise in mortgage rates hurts affordability.
Earlier in the year, affordability was estimated to be at a 10-year low. Not surprisingly, this is having an effect on demand, with mortgage applications down 16% over last year.
Check out these headlines we pulled from a simple California / Nevada Real Estate News search on “the Google”:
If you’ve been around Washington County more than a few months, you’re acutely aware that “what happens in Vegas: (and California), does not stay there, it trends its’ way to Utah!
Like I said at the start, this seems to be part of a fundamental shift in the market. I didn’t say a BUBBLE! A shift. One that sellers will likely regret ignoring.
Home price growth is slowing, and home prices might eventually start to decrease. Hundreds of St. George Sellers are looking at their languishing listing realizing this is true.
Mortgage rates are expected to continue to grow. And if that happens, we will slowly but surely enter a market where buyers, not sellers, have the final say.
So what does this mean for you?
Well, if you're looking to sell, it means the time to act is now. As in certainly this spring, and if your situation permits, this month. As in, NOW.
Around St George, I still see a lot of demand for homes. Well marketed homes priced in the “sweet spot” (feel free to reach out for more explanation) are still seeing multiple offer situations, Buyers competing to snag them. Even in the luxury home market!
- We recently sold this luxury home, the HIGHEST BLOOMINGTON SALE in 12 years!
- 2 (CASH) buyers entered a “bidding war” on this Green Springs home we just closed for the Jenkins family.
- We sold John & Charlene’s Rio Virgin Estates property within 3 days of hitting the market, and for 100% of their asking price.
However, over the next several months, it's likely that national trends will catch up with us here as well. California, Nevada and other “leading” states are clearly feeling it.
The good news is, you have an opportunity to act before this happens. Chasing the market STINKS, leading it is FANTASTIC! Just ask the hundreds of sellers who chased it into a pit a decade ago…
If you decide to list your home this winter, you might benefit from the current high prices as well as the solid demand around Saint George. In other words, you could sell quickly and for top value.
In case you’re considering it, you can get more info on what your home is currently worth by using this home value calculator, which takes into account recent St. George sales:
If the home price estimator spits out something that seems “off” based on what you know about your home, (which the automated system will not), let us know immediately and we can get you more customized info.
And if you are ready to get the process rolling while this opportune moment still lasts, give me a call at (435)215-4533. I'm here to help.
Have a great day, February, and beyond!
PS – If you didn’t get a chance to download our FREE Winter 2019 Buyer and Seller guides, here they are!