A Buyer's Market

You hear it all the time on the radio, "It's a buyer's market, hurry don't miss the boat!" These ads are run by mortgage companies, home builder's, etc. Then you here the Utah Association of Realtor's commercial about getting the facts about Utah's housing market, that it is different than California or Florida. Go online and you find blogs and comments that talk of the bubble that is about to burst in Utah or the major price correction. Who are we to believe?

The case for a fairly stable market is strong. Economically Utah has been leading the nation for years. With a low unemployment rate and job growth that led to 55,000 new jobs last year alone, people can easily find jobs. Key sectors of the economy are growing and we have a net in-migration of about 41,000 people a year. Many of these people are equity refugees from other states and are buying houses. We have a bright economic outlook. Interest rates have gone down quickly in the last few months as the fed has cut several key rates. Sounds like a recipe for demand and price increases.

On the other hand, Utah has a big inventory of houses on the market right now. Enough to last about 10 months if nothing else is built. While home prices increased in 2007, the real estate forecast for 2008 is fuzzy. Forecasters have predicted low single-digit gains if not small decreases in home values. This forecast has put many would-be buyers on the sidelines watching and waiting to see what happens. Foreclosures have added to the downward trend with many people who bought homes that they could not truly afford. Possible inflation in the future may drive up interest rates. Just ask those who took out a home loan in the early 80s, to them 12% was a deal. While all this may sound scary most experts feel a major correction is unlikely.

What does this mean for Daybreak? It depends on your point of view. If you intend to stay in your home for five or ten years, then do not fear. If you need to sell your home now, then get ready to make some concessions and lower the price of your house. The market has been divided into two main segments: those houses over 300k and those under 300k. Daybreak includes both of these market segments. However, the under 300k segment is dominated by condos and the over 300k segment is the majority of single family homes in Daybreak. Condos and the low-priced small homes of Daybreak will sell fairly easily. The cheaper they are the easier they will be to sell. That's why Garbett Homes' cannot build their condos fast enough. The higher the price goes over 300k, the more discounts and price slashing will have to be done to sell the home. Unique conditions do exist. A house across the street from the temple, park, school, or other amenity might not have to be discounted at all. Looking at the recent statistics of houses sold in daybreak, prices have been reduced anywhere from 100k to 5k on homes ranging from 600k to 230k. Home builders in Eastlake have made concessions and reductions in price as much as 30k. The existing home market is where the big discounts are. Either way, for now it is definitely a buyer's market.