Cache Valley/Logan Real Estate market – FORECAST 2018

November sky

Real Estate in Cache Valley has been booming the past 2 + years, with prices rising over 11% per year since 2015, home inventory at record lows, and new homes popping up along ridges and through fields like prairie dog towns all over the valley.  I’ve been overjoyed for my sellers, but a little nervous for my buyers – wondering if we’re on the edge of a bubble – concerned that the market might take a down-turn and buyers be left in a depreciating market such as that we experienced 2008-2012.  Here is where the research took me.

Economists have devised a pretty accurate Real Estate prediction model using 5 factors – resulting in what can be termed as a housing MRI.  The items to consider are: 1. EMPLOYMENT 2. SUPPLY & DEMAND 3. APPRECIATION & REPLACEMENT COST 4. AFFORDABILITY 5. DEMOGRAPHICS & DATA.

Here’s the skinny on how these factors look in our specific Cache Valley/Logan market.

  1. EmploymentThis is a leading indicator of Real Estate strength.  The Department of labor and employment has graphed the impact of unemployment rate on Real Estate in markets all over the US, documenting that job growth and high employment rates = strong Real Estate market.  Utah ranks #1 in job growth, adding 46,600 jobs just in 2016.  Our state’s economy is ranked as #4.  According to the US Bureau of Labor statistics, the unemployment rate in Cache County as of September, 2017  is a mere 2.6% ( compared to 4.1% nationally).  The highest unemployment rate Cache Valley has seen in recent history was August 2010 at 6.9% – coinciding with the low point in our Real Estate market. Current employment/job stats bode very well for a continued strong local Real Estate market.     
  2.   Supply & Demand: Things to consider in this area are: changes in re-sale inventory, rise in new home inventories,  oversupply of apartment construction/vacancy rates.  Here the local indicators are actually very positive:  The Cache Valley supply/demand balance has been at a steady equilibrium for the past 2 years, resulting in low inventory of homes for sale despite the abundance of new construction.  The average days on market (DOM =average time it takes for a home to sell) is currently 41 days -with those priced between $100-$200,000 taking just 26 days to sell, and homes priced at $400,000 + taking an average 110 days.  Despite the perception (my perception) of new homes cropping up like… well crops- actual figures don’t indicate overbuilding of either single family or apartment buildings.  Here are the numbers for building permits pulled in Cache County the past 3 years.  In 2015, 393 single family permits were pulled and 104 apartments.  In 2016, 468 single family and 42 apartments. In 2017 (to date) 410 single family have been pulled and 187 Apartment units.       In Contrast, back in 2006 & 2007 (prior to the market crash) there were over 650 permits pulled each year.  Apartment vacancy rates are below 1% with waiting lists in many cases.  It appears the additional apartment units & single family homes being built will be easily absorbed by the increased/increasing population (see point 5)
  3. Appreciation & Replacement costs:  As mentioned earlier, home appreciation in Cache County has gone up around 22% in the past 2 years, and according to FHFA.gov, Utah ranks 5th in the nation in home appreciation.  Over the past 5 years, home prices in Utah have gone up 45.46%.  Replacement costs have gone up at about the same rate – indicating a strong, stable market.
  4. Affordability:  This is an index based on home price, mortgage interest rate, and median family income.  Local statistics are readily available on the median single family home price (currently around $228,000 in Cache Valley) and on the mortgage interest rate (30 year fixed – 4%).  Unfortunately, I’ve been unable to find any credible current numbers on the median family income… available data is from 2015, and shows the median income at $51,000 for Cache Valley.  My hope is that household income has been increasing somewhat commensurate with the increase in home prices so that affordability is a positive index.  Since lenders have much stricter parameters in qualifying buyers than they did during the last Real Estate fiasco, and buyers are still able to get loans, it can be assumed incomes must be also rising.
  5. Demographics & Data:  This index is positive indeed for Cache County.  The latest estimates from the US Census Bureau show Cache County as the 20th fastest growing metro population over $50,000 in the US, reaching an estimated $131,441 by the end of 2017, up 2.% since 2010.  Utah in general ranks #1  in population growth in US- resulting from both high birth rate and influx of people moving from other states/countries. Cache Valley/Logan continues to rank low in crime and high in outdoor recreational opportunities (specific rankings vary depending on the study, but all are favorable).

Based on statistical information, the Cache Valley/Logan Real Estate market IS NOT in “bubble trouble”.  This is a desirable place to live, and people are moving here.  Unemployment is low.  Job Growth is positive.  Inventory is low with a stable balance of supply and demand – even with new construction factored in.  The appreciation rate may level off – and that is expected, but there are certainly no indications of any depreciation in the foreseeable future.

If you would like any other Real Estate information, have questions about purchasing or would like to know the value on your home, please feel free to call or e-mail me.

Terri Sizemore 435-770-9407 supersizemore58@gmail.com

 

 

Cache Valley/Logan Real Estate 3rd quarter 2017

The Cache Valley Real Estate Market seems to be leveling off/mellowing out a bit.  The rapid acceleration in home prices is tapering, and the average $ per foot in September ($101) actually decreased slightly over August.  That average price per foot number is 3.5% higher than September of 2016 though, and reflects the historical rate of home appreciation in a normal market.

Total home sales in Cache Valley for the 3rd quarter was 441 – a figure 15% lower than 3rd quarter of 2016, but the same as 3rd quarter 2014 & 2015; and once again- a good, typical figure for our area.

The average days on market figure (DOM) of 42 for September is excellent (homes are selling), but lower than the previous 2 months.  The average home sales price rose 1% – to $228,000 for our valley.

Home sellers attained an average 99% of their list price in September – a figure not previously achieved in the 8 years I’ve been a Realtor! ( In the years 2010 through 2014 that figure was sometimes as low as 85%).

The state of equilibrium in home listings/sales is being maintained, and the current number of homes on the market is 275.  Affordability in Cache Valley is still great.  Prime interest rates are still around an amazing 4%, and the $101 average price per foot is excellent compared to most other desirable places.

Our Cache Valley remains a safe, beautiful place to live with low unemployment and oodles of outdoor recreation opportunities!

Enjoy the beauty of autumn!

 

2nd quarter 2017 Cache Valley/Logan Market Statistics

“Hotter than the Fourth of July” has real meaning for us this year!  After running numbers on the 2nd quarter stats for Cache Valley, I am here to report the  Real Estate market has been “HOT” as well… While there were 10% fewer sales in the 2nd quarter of 2017 than the 2nd quarter of 2016,  prices were 12% higher!  In June, the average price per foot for homes sold in Cache Valley was a remarkable $105.

Inventory remains tight.  Today (July 7) there are 271 active homes on the market, and the average days on market (time it takes for a listing to go under contract) is 57.  Interestingly, homes priced under $250,000 continue to sell VERY quickly and the inventory remains low, but homes priced over $500,000 have an average days on market of 270 days!  There are currently 45  homes on the market priced above $500,000 (16.6% of the inventory) , and only 9 homes (1% of the sales) in that price range sold in the past 6 months. Takeaway:  If you have a home for sale priced over $500,000, please be patient. 

In this market, traditionally 2nd quarter has the highest number of listings and 3rd quarter reflects the highest number of sales.  If those statistics hold true for this year, inventory in the coming months may be even lower than today’s 271.

Right now, making a move-up in home size makes a lot of sense.  Smaller homes are in especially high demand, and there is more inventory (percentage-wise) available in larger homes – priced above $350,000.  Mortgage prime interest rates are below 4% again, and compared to most of the USA, affordability is good.

If you need any Real Estate information or assistance, please call or e-mail.

Terri Sizemore 435-770-9407, supersizemore58@gmail.com

STAY COOL!

Logan/Cache Valley Real Estate update May 2017

Commerce is all about supply and demand.  Here in Cache Valley, the demand for homes continues to exceed the supply – especially the supply of affordable homes.  Today there are 253 homes active on the market (listed on the MLS).  That’s 27.5% less than the 349 on the market exactly 1 year ago…. and we thought the home inventory was low then!

Although the inventory is much lower than it has been in the past 17 years (yes, the last time active listings were this low was pre- 1999), home sales for the first quarter of 2017  (259 sales) were still higher than the first quarter sales of 2009 through 2015!  (First quarter sales in 2016 were 12% higher at 290).  There were more sales in April this year (119) than any other April since the big boom in 2007 – illustrating just how quickly homes are selling.  The average days on market is just 64, and for the lower priced homes (under $150,000) it’s just 37 days.  

The increased demand for homes has continued to drive home prices upward.  In April the average price per foot increased to $97, and the average sold home price was $220,000 ( In April, 2010 the average sold price was $172,000).  There have been appraisal problems arising with the rapid appreciation rates.  Homes still need to appraise so the values must be substantiated – this will keep rising home prices in check.

Mortgage interest rates, while expected to increase, have really remained stable so far this year and are still hovering around a very affordable 4%.  Now is the perfect time to sell a smaller home and move up.  Of the 253 homes listed, 108 of them (43%) are priced above $300,000.  Homes priced under $225,000 are going like hot cakes.

Newly built homes are adding to the home inventory, and I expect the number of homes active on the market to increase – stabilizing prices…While I don’t have firm statistics on the number of homes built in the Valley in the past year, it’s not hard to see builders are working at a frenzied pace to keep up with demand.

As I look back through old stats and reflect on the real estate market the past 8 years, … it’s a great thing to see seller’s once again realizing profits through home appreciation, and in Cache Valley home affordability is still excellent compared to most of the US.  This is a desirable and beautiful place to live.

Please feel free to ask for help in determining the value in your home if you’re contemplating selling, or help in looking for a home if you think it’s time to purchase.

Enjoy the warmth to come!

Terri Sizemore 435-770-9407

 

 

 

 

 

Status of the Logan/Cache Valley Real Estate Market

Yet another Year has flashed by, and our local Real Estate Market was a real “rip snorter”!                         img_0892

In 2016, home sales were up 10.7% over 2015 (1607 homes sold in Cache Valley), and sold prices were up 9.6%!!  The average sold price per foot in 2016 was $92 and the last 6 months it averaged $95 per foot.  Our previous market high (late 2007) was an average price per foot of $88.  Please keep in mind, these average prices include new homes, single level, 2 story etc… It’s important to have a Real Estate professional or appraiser evaluate your specific home/location to determine your home’s value.

Factors contributing to the increased home prices are: low inventory – there has been a 13.1% decrease in the average number of homes available on the market since 2015 (at this moment in time there are just 226 homes on the market in Cache Valley), and increased demand for homes as Utah continues to benefit from an influx of new home buyers.  15,000 people reportedly moved to the state last year, and Utah ranks 2nd in the US in Millennial (those born between 1982 and 2004) home buying.

Prime mortgage interest rates, while up .75-1% the past several months, are still very affordable. According to The Mortgage Report (an unbiased, very useful mortgage news publication) they are expected to hover between 4-4.32% in 2017.  Government backed loans (FHA, VA & USDA) actually provide even lower rates currently, but have accompanying mortgage insurance premiums).freddie-mac-rates-long-term

All signs point to the Real Estate market remaining strong. Housing appreciation in Utah overall is projected to slow in 2017 to a more sustainable 5-6% as builders continue to add to the home inventory – which is good news for buyers.

Best Wishes for a Happy and Prosperous 2017!

 

 

 

The truth about on-line home valuations….  

The truth about on-line home valuations in Utah (i.e.… Zillow zestimates, Trulia estimates)

 

I frequently get calls from friends and clients – confused or upset because they saw a “zestimate” that valued their home at $25,000 below what we have it listed for or $10,000 below (or above) what they purchased it for…. Sometimes they’re excited because they think it will be justification to contest a property tax bill.

While offering an additional good marketing tool, sites such as Zillow and Trulia access information that is incomplete and therefore inaccurate.  Utah is a non-disclosure state – meaning sales prices are not public information.   Even in full disclosure states such as Colorado – where sales information is readily available, the MLS is the only really accurate valuation resource– providing important additional information such as square footage on each level of the home.  (Main level square footage is more valuable than 2nd floor footage – which is more valuable than below-grade space).

Real Estate professionals are able to access information from the MLS – evaluating home sales of homes comparable to yours in size, style, age and condition – including the very important square footage per floor comparison; thereby arriving at a reasonably accurate home valuation.  Appraisers perform an even more in- depth evaluation of “sold” comparisons –thus providing an even better assurance of  home value.

In summary:  Don’t stress (or celebrate) about a zestimate or any other on-line look up home evaluation.  If you need to know what you home would sell for right now, call your knowledgeable Realtor – ask her or him to please look at your home, take some time to pull and evaluate comparable “solds” and voila – you’ll find out within reasonable accuracy what your home is worth.

As a buyer, why should I use a Realtor?

For your protection

Buying a home is a very important and expensive purchase – probably the most important purchase you will ever make. It’s very important to have someone help you who is educated in all the facets of real estate.

Unlike hiring an attorney to represent you, it’s one of the few instances in life where you can have professional representation and you don’t even pay for it.  Realtor fees are typically paid by the home seller.  Brokerage commissions are split by the Realtor listing the property, and the Realtor bringing the buyer.  As a buyer, it is generally in your best interest to have a Realtor representing YOU versus using the listing agent who represents the seller.

Realtors have knowledge & CONNECTIONS

A competent Agent knows the market and will do research on the value of homes you’re interested in. If questions arise about properties, they do the necessary research with county records, cities, etc… they’ll find the answers to questions about animal rights, water rights, covenants etc…allowing you to make a well-informed purchasing decision.

They have connections with other professionals.  They can direct you to qualified lenders, reputable inspectors, contractors etc…

         They’re trained Professionals

  1. Real estate professionals take classes continually to make sure they’re educated on all new laws, procedures, forms etc…
  2. They have experience. .. The first time doing anything is always rocky and uncertain. experience helps take away the rockiness.
  3. Realtors pay dues for full access to the MLS (multiple listing service)- they can access and research all of the properties for sale (not just those from a particular brokerage), share listings via the internet, and then physically show you homes that interest you.
  4. Realtors are able (time allowing) to preview homes before you see them…saving you time if you’re clear on your parameters.
  5. Paperwork…They know what forms and contracts are needed and will make sure they’re filled out correctly and legally.
  6. They will manage the transactions and dates for you.
  7. Maybe most importantly, a trustworthy Realtor will negotiate the best terms for YOU. After you find that perfect home, research will be performed to determine the true market value of the home, ensuring that you know what you’re buying, and you don’t overpay

 

A competent, honest Realtor is invaluable in making your home purchase a smooth, safe and happy transaction.  If you’re thinking about purchasing a home I would appreciate your consideration when choosing a Realtor.  Terri Sizemore 435-770-9407