Cache Valley/Logan Utah Real Estate Market 3rd Quarter 2018

The Cache Valley Utah real estate market remains strong.  The number of homes sold 3rd quarter 2018 was up 3% over 2017 at 470 homes – even with the prices 13.5% higher than last year at this time and interest rates rising.  The past 3 months our home inventory has hovered between 315-325, and currently the average sold price per foot is $114 (remember this is an average – as I’ve mentioned before, pricing varies wildly depending on type of home, age and condition). The average home sale price in Cache Valley is now $262,000.

To put these prices in perspective, the average price per foot in the state of Utah is over $150, and the average home price in Utah has exceeded $350,000 (33% higher than Cache Valley)!  Compared to much of our state, our real estate market is very reasonable.  The state, and our local valley continues to attract new residents with great scores on job growth, outdoor recreation opportunities and excellent quality of life (seasonal air quality excluded).

Despite the strong Utah economy, a market adjustment is anticipated.  As the mortgage interest rates increase, buyers who need to obtain mortgages (most buyers are in this category) find their budgets decrease.  Likely we will see this decreased purchasing power affecting the acceleration of prices and modifying the current sellers’ market to a more balanced market again.  Locally we’re seeing a dual market developing, with homes appropriately priced under $250,000 moving like wildfire, but the higher priced homes – over $350,000 sitting on the market a longer time as they compete with the many new construction options and the increased inventory.  Historically, a yearly real estate market appreciation is around 4 – 4.5% – not the 12-13% appreciation we have seen the past 3 years.  In Utah in general, experts predict a continued appreciation, but at a more normal 6-7% increase next year.

 

 

 

Recap of The Logan, UT Real Estate Market 2017

I sound like a broken record, but once again I’m here to report that our Local residential Real Estate market is HOT (booming, flourishing, rip-snorting are other cliched adjectives that could be used).

The demand for homes in Cache Valley continues to exceed the supply, and the inventory of available homes has stayed low all year in response.  Currently there are a paltry 202 active homes/townhouses on the market, and 61 of those are under construction!

While the number of residential sales reflected on the MLS (1504) was 7% lower in 2017 than in 2016, the actual total number of sales was certainly higher because of the abundant new construction – most of which are not reflected on the MLS.  Home prices in the valley continued to rise. In 2017 the average price per foot rose over 10% to $104 per foot, and the median sold home price rose to $229,000 4th quarter 2017.

A year ago experts were predicting mortgage interest rate hikes, but that did not happen.  Currently the 30 year fixed mortgage interest rate is at or under 4% with a credit score of 740.  Experts are once again certain that interest rates are going up in 2018 (today the DOW broke the 25000 mark and economy projections are very bullish -giving credibility to the interest rate increase predictions).

The Utah Real Estate market in general, and Cache Valley/Logan specifically show no signs of declining.

Jim Wood, who’s studied Utah’s housing market for 40 years and is a senior fellow at the University of Utah’s Kem Gardner Policy Institute,  tells people “don’t wait for prices to go down. That’s not going to happen in the short term.” He predicts prices will go up another five to six percent depending on where interest rates go. My local research supports Mr Wood’s assessment.(see https://homescachevalley.com/2017/11/10/forecast-cache-valley-logan-real-estate-market-in-2018/). 

Selling and purchasing in this tight, rapidly moving market can be very tricky.  Although values are rising, we are experiencing some problems with homes appraising.  Sellers still have to have appropriate pricing – with substantiated value; and home condition remains very important if the goal is top dollar.  Buyers are frequently dealing with multiple offer situations, and it’s important not to get impatient or  desperate and make an imprudent decision. Buyers who need help with closing costs (buyer closing costs are all associated with procuring a mortgage loan) are at a disadvantage in this market, but a savvy Realtor can help negotiate an offer that will be accepted.

Please feel free to call or email me if you have Real Estate questions or need Real Estate help.  Terri Sizemore  435-770-9407  supersizemore58@gmail.com.

As the New Year Begins I’m reminded of this quote by Michael Altshuler “The bad news is time flies.  The good news is you’re the pilot”

May your 2018 be filled with time well spent!

 

 

 

 

 

Logan/Cache Valley Real Estate…Is there “Bubble Trouble” ?

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

 

 

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