Commentary by Principal Broker of Team Teasdale
Realty - Paul Teasdale
Overall the
Utah County market is slightly improving.
The amount of
active listings has been lower than 2008 every
month excluding January.
This is actually a very positive sign.
This means the clogged inventory is starting to subside.
In 2007 and 2008 we had up to 5,300 listings for sale.
Currently we have around 3,900.
I think the inventory will decline into the winter of 2010.
This sale as a
percentage graph a very important. It is the heartbeat of what
is going on in the market. You can see the sun coming out
amongst the dark clouds. Look closely at the
Sales as a
Percent of Listings Graph. You see from May to June of 2009
the cross over of the 2007 line. This is a bullish indication
that sales are picking up and looking stable. Watching the
graph in 2007 was scary. At the time it felt like the market
was going to completely die. This graph show the percentage of
homes that are actually selling and closing compared to the amount
of listings in the market. I think sales will remain stronger
than 2008 and 2007 into the winter of 2009.
The average list price compared to
average sale price graph shows
the gap between the average asking price and the average sold price.
This gap is the widest I can remember it in the past fifteen
years. We are seeing a
widening gap of higher priced inventory start to drop.
You can see in 2008 and 2009 (Ave List) the prices declining.
Also, notice in 2009 the average sale start to level off.
This makes me think that the market may have found a bottom
or is getting very close.
I think we will see this level off into 2010. The average sale price is obviously declining. The
average sale price of homes in Utah County is currently $230,733.
The average sale price in 2009 has dropped by about $25,000 since
2007 and 2008. We can conclude from this data that prices have
been coming down significantly in the past two years. I don't
think the average sale price will move into 2010. The 2009
average sale price seems to have flat lined. This is healthy
for the market but doesn't help the higher end homes.
Condo listings are experiencing a decline here in Utah County.
We currently have about
575 condos listed right now.
In 2007 this number went up to 800.
It is a much better market to sell a condo.
The condo sales graph is all over the place. In August of 2007
condo sale boomed to about 160 sales before the market absolutely
crashed. It has not recovered since this time. The new
construction government stimulus grants have given tiny infusions
into this market in 2009. It has done little. I guess it
is our real estate version of the cash for clunkers program.
This is the absolute worst sector of the Utah County Real Estate
market. Homes listed
over $500,000 climbed up into 2007 as our economic crisis bloomed
and straight back down in 2008 and into 2009.
Homeowners in this market have found themselves up against
alot of short sales and foreclosures.
In fact, 25% of the homes for sale right now are short sales.
I think this sector of the market will continue to decline
into 2010 as banks are reluctant to loan money on jumbo loans.
Review the
active
and sold graph
of homes over $500k.
July 2007 was the end of the bubble for the homes over
$500,000.
It was like falling off a cliff after July of 2007.
Our market has gone from about 40-50 homes selling in the
peak of 2007 to between 10-15 per month in 2009.
It is hard to believe but we only have between 10-15 homes
selling over $500,000 in Utah County right now.
On a positive note the 2009 sales have somewhat stabilized.
I sold a few homes in 2009 that were once close to a million
dollars for between $390,000 to $450,000.
I think this price range was inflated due to the loan fraud,
false appraisals and real estate scams.
Notice the
median list prices on homes in Utah County have been
declining almost every month for the past two years.
The summer of 2009 was good. We saw by the
units
sold graph that there was an increase in the amount
of homes sold in 2009 compared to 2008. This was very positive for the
Utah County real estate market. However, it appears this boom
may be short lived. Many speculate that the small boom was
helped by the government's new construction stimulus money.
Many buyer's have also indicated that they think the market has hit
the bottom. I think we are at or close to the bottom.