It’s On The Table!

There’s no question. The government’s first-time homebuyer tax credit has spurred a significant amount of sales this year and its positive impact on the hard-hit housing market warrants an extension. Latest estimates show that some 400,000 additional sales occurred this year due to the first time home buyer tax credit, which is about 8% of all sales this year.

The latest news in the saga, The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers. While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all homeowners who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.

The U.S. Senate won’t vote until next week at the earliest. As soon as they do we intend to create a piece that will allow you to communicate the news to your clients.

Reports show that Senate action has been delayed by a Republican demand that a vote be allowed on an amendment to end the Treasury Department’s Troubled Asset Relief Program at the end of this year. But lawmakers say they want to prevent home sales from slipping as the economy struggles to recover. And as I mentioned in a previous edition of Weekly Market Watch, that is just what may happen if lawmakers choose to let the tax credit expire.

On the flip side, the Democrats, along with the Obama administration are backing it. “The success of the American economy is closely tied to the success of the housing market; by helping to stabilize the housing market, the homebuyer tax credit has helped to shore up the economy as it begins to recover,” said Baucus, a Montana Democrat. “This would enable an even greater number of potential homebuyers to take the credit.”

Thus far it seems to be doing its job. This week, Business Week reported “The broad improvement in the housing indicators in recent months leaves no doubt that the long-awaited housing recovery is finally under way.” The article went on to report: “Policy alone cannot explain the 24% gain in existing home sales since January, nor the 22% increase in new-home purchases, the 40% rise in single-family housing starts, and the recent upturn in home prices. The primary driver is historically high affordability. Fixed 30-year mortgage rates are at 5%, a multi-decade low, and prices have plunged a total of 30% since May 2006, based on the Standard & Poor's Case-Shiller Home Price Index. By that price gauge, homes are well undervalued relative to both rents and aftertax income.”

Next week I hope to report some positive news on the home buyer tax credit front. Until then, let’s take a look at this week in real estate:

• Davis County—Both the North Davis and Bountiful offices have seen a decline in listing inventory over the last couple of months. Some of that may be attributed to seasonality, but the sense of some of our Agent base is that there are more limited services listings being taken. Hmmm...that is interesting to me. Since selling your listing is no easy task right now it surprises me that sellers would want to list with brokerages that provide them less exposure and services. Perhaps because of tight equity positions in many properties right now, sellers are feeling the crunch and are looking to price only to make their decision on who to list with. I guess time will tell. Sometimes it's ok to be the second agent in when a seller does not get the results that they thought they would get from a limited service broker. That will be interesting to watch over the next few months. The end of the $8,000 tax incentive is definitely causing some urgency for first time buyers. Both offices report that many of our agents are working with people who are looking to close soon in order to get in on the incentive.
• Salt Lake County North—The Salt Lake office reports we are seeing some activity in the Previews market because there are buyers that are realizing that prices have hit bottom and are starting to rise, and interest rates are starting to inch up. There has been more traffic at these open houses than in quite some time. The fear of missing out on the lower prices are motivating buyers more than the fear of uncertainty in the market. Open house and web traffic indicate there is a tremendous amount of pent up demand in the market. However, there is still fear and uncertainty surrounding the future of the economy and job security. Once this fear subsides and consumers have confidence in the direction of the market, we should see a robust real estate market if interest rates remain at a reasonable level. Union Heights reports the market is not improving because of uncertainty with legislation pending concerning extension of tax credit. Sugar House reports open houses have slowed a bit.
• Salt Lake County South—We have had a great couple of weeks with opens and closes. Listing base has stabilized. Lots of good first time buyers still taking advantage of the opportunities for the rebate. Open houses seem to be a bit sluggish in most areas, JBJ leads are the source of most business as long as agents ask the people they call for their business. One Agent called 3 people and asked for referrals, got 1 name, that call has generated the possibility of 8 listings.
• Salt Lake County West— In the West Jordan Office we have taken few listings in the month of October than we took in October of 2008. Another difference is the price range of listings taken. The highest listing we have taken, so far in October is $289,900. We are still seeing the market moving in the lower price ranges. Not much activity in our area over $300,000.
• Tooele County—Our Tooele office reports happy day!! All signs point to an improving market. Listing inventory has dropped and closed transactions have increased steadily in the last 2 months. Back to back months of strong sales. My perception is that this might be the result of the expiring government tax incentives.
• Utah County— Inventory continues to decline, dropping 6% in September over August from 4182 to 3960. The percentage of short sales continue to increase from 21% of the inventory to 23%. This increase is in part due to the lengthy time frame short sales are being kept active, which waiting for bank approval. The highest percentage of short sales in Utah County are to be found below 100,000, 26 out of 59 listings or 44% of the properties under 100,000 are short sales. Overall Utah County has a listing inventory of 9.7 months and a significant portion, 23% are short sales, of which have offers pending bank approval. Short sales which are stuck pending bank approval are inflating our listing inventory and may be skewing the numbers. It would not be surprising to see an increase in demand for homes which are not short sales, particularly those below 300,000. Home sales 300,000 and below represent 83% of the buyers for September. Overall sales were down 17% in September over August, from 489 to 406. This decline reflects a normal seasonal trend found in an active market like ours.
• Weber County— Sales have slowed a bit, we think due to seasonality. What is significant is the dwindling listing inventory and the lack of listings being turned in. Also we are seeing frequent withdrawals on listings. South Ogden will be implementing a listing campaign through the end of 09.

Next week I will release the November edition of Reality Check. In it, we focus on the state of the market and include an interview with me. I think you’ll find it helpful and informative in educating your clients and prospects on the current state of the housing market.

Until then,
Make it a great week,

Dan Christensen
Coldwell Banker Residential Brokerage Utah

Tax Credit: Expand? Extend? Expire?

The question everyone is asking is, will the government expand, extend or simply let the $8,000 first time home buyer tax credit expire. With just over 50 days left until it expires, the debate is on and everyone is waiting on pins and needles to hear the result.

Whichever side you take on the debate, what you can’t deny is the fact that nothing has done more in the past year to jumpstart our housing market than the $8,000 first time home buyer credit. Will all of that come tumbling down if it isn’t extended or expanded on? It’s hard to say but I believe that if it isn’t expanded we will see a definite drop in first time home buyers in 2010 and probably a much larger emergence of investors in the entry level arena. While on the surface that may not seem troubling, it actually is. The fact is that investors purchase homes solely for net profit while first time home buyers purchase homes for lifestyle. When we have a balance between the two it keeps home prices relatively stable. If one of the two disappears, we’ll likely start to see drops in home prices which isn’t good for a market that has already taken its fair share of hits.

While Congress continues to debate the issue what we as Realtors are calling for is support of an expansion of the tax credit from first-time buyers to all homebuyers, increasing the maximum amount of the tax credit from $8,000 to $15,000, eliminating the existing income caps for eligibility purposes and extending this homebuyer tax credit for one year from the date of enactment.

We believe that stimulating demand for housing—particularly in the repeat buyer market—is the most effective way for Congress to help lead the U.S. economy into a recovery and back on the path to growth. Timing is critical and we hope that Congress will hear our voices.
While the clock ticks and we await the results of the debate on Capitol Hill, let’s take a look at this week in real estate:

• Davis County—The Bountiful office reports the number of listings taken for the office is down, but open gross profit for the office is up slightly. Buyers seem to be serious about getting deals done before November, but there is no big surge of buyers flocking to the market. We've had two multiple offer situations in the last month that we take as a good sign but no real data to predict any future trends. Every new day is fun and exciting in Bountiful.
• Salt Lake County North—The Salt Lake office reports buyers are starting to feel confident enough to make offers on properties. However they are looking for deals, and they are being really picky on inspections. Buyers will walk away unless they get what they want. Sellers need to have their properties priced right and in good condition to get an offer and have that offer close. Union Heights reports the market continues to be OK. Not stellar…..activity remains inconsistent…mostly in the lower price ranges below $300k. Sugar House reports the market has slowed with transactions, down for September. Open house activity is starting to pick up.
• Salt Lake County South— The buyer’s market is really active in the first time buyer range. Seeing multiple offers on well priced homes. Listing inventory is moving in the same price range. Sellers are beginning to adjust to the market place or just admitting they can't sell their property for what they want and are taking it off the market
• Salt Lake County West— In the West Jordan Office we're seeing a last minute push for buyers to find a property and take advantage of the tax credit. Most of these Buyers are not looking at Short Sales at all. We're still seeing more activity below $300,000 with only 12% of our sales for September being over $300,000; with the majority being under $250,000 (68%).
• Tooele County—Our Tooele office reports after a slow August, September sales activity picked up and accepted offers were as strong as we've been in 09. The listing inventory is stable, therefore, we're listing and closing at about the same rate.
• Utah County— Inventory continues to decline, dropping 6% in September over August from 4182 to 3960. Percentage of Short Sales continue to increase from 21% of the listing inventory to 23% in September. This may be in part because of the lengthy time frame Short Sales are being kept active while waiting for bank approval. Sells were down 17% in September over August. Active buyers are following what may be a seasonal trend by declining. However open units are bucking seasonal trend by increasing 4.6% over August; this is possibly fueled by first time buyers wanting to take advantage of the tax credit.
• Weber County— Sales for September were very close to being on par with September 2008 numbers. We had a couple multiple offer situations. Listing inventory is off significantly from 2008 numbers. We are at about 70% of last year’s inventory.

Commentary from Melissa Wright of Axiom Financial:

"Short Sale." It sounds so much nicer than "Foreclosure" but is it? A short sale is when the lender, investor and/or mortgage insurer approves the sale of a property to a new buyer for less than the original amount of the "mortgage loan. There seems to be a myth floating around out there that a short sale is better for your credit than a foreclosure, this is not the case. A short sale carries the same 200-300 point hit to your credit score as a foreclosure and will remain on your credit report for seven years. Don't give in to despair, there is still hope for the future. Rebuilding your credit will be critical to you being able to purchase another home in the future, after the specified waiting period. The waiting period, beginning the day the title of the home has been transferred back to the lender or new buyer; varies depending on the type of financing chosen. FHA - 3 years - VA - Conventional - 2 years. Agents should make sure their sellers and buyers are well informed about the risks and requirements associated with entering into a short sale or foreclosure situation. It can be a long grueling process, make sure to get a mortgage professional involved early on in the process.

Here are a few informative links regarding the $8,000 tax credit that you may find helpful:

• Update: Industry Makes Case For Home Buyer Tax-Credit Extension; Wall Street Journal
• Builders Urge Congress To Act On Home Buyer Tax Credit, Appraisal And Lending Issues; National Association of Home Builders
• Homebuyer Tax Credit Best Tool For Sustaining Housing Recovery, Says NAR; NAR
• Make The Home Buyer Tax Credit More Easily Available At Closing; RISMedia
• 1.4 Million Families Have Taken Advantage Of First-Time Home Buyer Tax Credit, More Claims Expected; RISMedia

Until next week,
Make it a great one,

Dan Christensen
Coldwell Banker Residential Brokerage Utah

“Yes, the housing market has rarely looked better.”

That was the headline in a September 2 Wall Street Journal article. Click here to access it: http://online.wsj.com/article/SB10001424052970204047504574386802310702622.html. This was a really interesting piece which looked at numbers from Standard & Poor’s and NAR. Following is an excerpt from the article:

“Last week, Standard & Poor's reported that its S&P/Case-Shiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There's no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free-fall. That means if you've been sitting on the fence, it's time to act.

Ordinarily I'd never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real-estate prices nationally now down about 30% from their 2006 peak and showing signs of turning up, the prices aren't likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can't imagine a better time to buy than now.”
This of course is what I’ve been saying for some time and it is nice to see it in black and white in a reputable publication like The Wall Street Journal. The fact is, while we may have a long road ahead, we probably have hit bottom and if you were considering buying you probably should consider acting now before it is too late.

And with that said, let’s take a look at this week in real estate:

• Davis County—The Bountiful office is asking if anyone else feels like the real estate rollercoaster continues to ramble on? The solid listing and sales activity of the early summer seems to have faded over the last six weeks as reported listings, sales and closings have slowed considerably. Agents are reporting that consumer confidence is better, but is still a bit fragile. There has been a push to educate those buyers who qualify for the federal tax credit to act so they can get the tax benefit before it expires on November 30th, although speculation that this program may be extended is watering down that message to some degree. Properties under $250,000 is still moving fairly well, while inventory in the higher ranges is fairly stagnant. The activity level in the area is good, but the results with regards to closed sales are fairly spotty at best. Frankly, it is very difficult to gauge the trajectory of the market right now. It is dynamic to say the least.
• Salt Lake County North—The Salt Lake office reported buyers are entering the market if they feel secure in their employment as they are understanding that low interest rates and low prices will not last forever. If you can get listings under $300K they are like money in the bank. Listings generate multiple transactions for the Agent, and they are in a strong position with a listing everyone wants. The market has bottomed and we should start to see the movement from starter homes percolate up through other price ranges this fall and moving into the 4th Quarter of 2009. Union Heights reports the market continues to be OK, not great. It remains to be seen what the early fall will bring.
• Salt Lake County South— Slow start to September, but buyer activity has picked up significantly with the approaching $8000 rebate deadline and the new incentive for new construction. Low to mid $200K homes seeing quick sales and multiple offers.
• Salt Lake County West— No change reported.
• Tooele County—Our Tooele office reports listing inventory has increased by approximately 45. Ratified holding steady, but the fall off has been increasing. Probably due to financing difficulties and short sale offers.
• Utah County—No change reported.
• Weber County—Unit sales for August were up in South Ogden over unit sales in August 2008. This is only the 2nd month that we have exceeded 2008 unit sales numbers. Inventory is down significantly, we currently have 56% of the listing inventory that we were caring in August 2008. We have 176 listings now and in 2008 we had 317.

Commentary from Axiom Mortgage President Melissa Wright:

“The new home run grant 11 program was released September 4th which makes available $4000 to qualified buyers of new construction properties. There are a few changes from the original program, including more flexibility for those interested in purchasing a newly-built home, and a lower grant in order to benefit more consumers. Keep in mind this program is not just for first time buyers, but for qualified buyers planning to purchase a new, never-occupied home as their primary residence. Unlike the previous program, grants can be committed for homes not yet built, but are scheduled for occupancy and close by June 30, 2010. Homebuyers planning to take advantage of this program should be quick. There were only 1950 total grants made available and they are going fast. Consumers should grab this opportunity for this grant, as well as checking for additional opportunities from the county/city in which they're planning to buy. These grants, along with the $8000 first time buyer tax credit make it an amazing to me for new home buyers to take the leap. Your Axiom Mortgage Consultant can help you with the paperwork necessary to request the grant at the right time in the process - the grant commitment is only good for 10 days, so using a mortgage company you can count on to close on time is essential. Check with you agent and mortgage consultant for more information and how to take advantage of this special program.”

This week I’ll leave you all with the reminder that the $8,000 federal tax credit for first-time homebuyers is scheduled to expire on December 1. However, in order to qualify, the transaction must be closed on or before November 30, essentially leaving first-time buyers with less than three months to complete the process.

While the urgency of trying to find and close on a home before the deadline may seem stressful, it doesn't have to be. Just contact your Realtor today and they can walk you through the process or visit us online at UtahHomes.com.

Until next week,
Dan Christensen
Coldwell Banker Residential Brokerage Utah

Existing Home Sales Up For Third Straight Month...The Question of the Day: Have We Bottomed Out?

Some are calling it the sign that we have hit bottom and are on our way back up. Others are calling it a blip on the screen. Whatever your take, NAR released Thursday its existing home sales report which showed three key, positive indicators regarding the housing sector:

• For the third consecutive month, existing home sales rose
• Inventory is easing
• Home prices declined less sharply in June

The report noted, “Existing home sales…increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.9 million-unit level in June 2008.

The report also revealed, “Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4 month supply at the current sales pace, down from a 9.8 month supply in May. Raw inventory totals are 14.9 percent below a year ago.”

The Wall Street Journal reported Thursday a look at 28 major real estate markets and where they are headed. The results (http://online.wsj.com/public/resources/documents/retro-HAGERTY.html) were interesting.

What all of this leads us to believe is despite some of the challenges we continue to face nationally and globally, the domestic housing market continues to demonstrate signs of recovery. The temporary first-time home buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact.

Are we out of the woods yet? It’s tough to say but the signs are encouraging and three months of continued increases in home sales are a positive sign that we may be on the road to recovery.

And with that news in tow, let’s take a look at this week in real estate:

• Davis County—The Bountiful office reports Davis County is still experiencing problems around property's having appraisal issues. Pricing properties right and doing some research on what offers should be prior to making them has never been more important. We have seen a couple of cases where banks who have properties in inventory were not willing to pay selling Agent commissions. The number of open contracts has been increasing through the month of June which is encouraging. The few open houses that are being done are reporting good traffic and any agent who needs some more leads needs to get out and hold some houses open..
• Salt Lake County North—The Sugar House office reports the market is still steady. Activity has slowed a little from last month. The Salt Lake office reported lower interest rates over the past week have really stimulated sales under $300K, but we are starting to see more activity in the $400-500K price ranges as buyer confidence increases with good economic news. This is one of the strongest Julys we've seen as July is typically a slow month due to vacations and holidays. Union Heights reports the best week they’ve had in a long time with 50 opens.
• Salt Lake County South—Our Jordan Commons office reports I still have two couples working towards saving for their down and planning to use the $8,000 tax credit. If properties are priced right we are seeing multiple offers. There is a sense of urgency when the home is priced right that wasn't there before. The Draper office reports there are plenty of people wanting to buy/sell during the holidays and if you choose to work, you can get great business.
• Salt Lake County West—Our West Jordan office reports our listings and ratified sales really jumped up this week. Interestingly we have not taken a listing over $349,000 so far in the month of July. Also, we have not had a sale over $399,000 in the past 60 days. The majority of the sales have been under $200,000. Our average sales price for the past 12 months is $315,000. It feels like the market is moving quite well under $200,000 for us.
• Tooele County—Our Tooele office reports listing inventory exactly what its been for 4-5 months. Closings are unbelievable slow, BUT ratified are quite high compared to last quarter.
• Utah County—
  Active Sellers in Utah County
  June - 2009 4442
  July - 2009 4378
  Down by 1%
  
  Active Buyer's in Utah County
  June - 2009 883
  July - 2009 1055
  8.4% increase in # of active Buyers in one month
  
  Multiple offers, in number of issues with short sales and banks (2nds) not
  cooperating & placing home into foreclosure.
  
• Weber County— Not much has changed with regards to the market. However, there is some concern around the potential for failed transactions with the new Mortgage Disclosure Improvement Act that will become effective on July 30th. We are seeing steady sales in the lower price ranges, with a few sales above $350,000. Listing inventories are down for 2008.

Commentary from Axiom Mortgage President Melissa Wright:

“Buyers have a number of options available to them when considering purchasing a home. A wide selection of homes on the market and financing programs may help qualified buyers purchasing with little down payment and still get great interest rate. For instances, HUD has a program allowing buyers to purchase one of their HUD-owned properties for as little as $100 down when obtaining FHA insured financing. the program features flexible credit qualifications , includes the Good Neighbor Next Door Program (for public service officials such as police, fire fighters and teachers), and HUD's contribution of 3% towards closing costs. Qualifying homes are listed as available for FHA financing and buyers must make a full price offer to qualify. Coldwell Banker and your Real Estate Agent can show you the available properties for sale which qualify under this program. Your Axiom Mortgage Consult can help with the details of this unique program, and will qualify buyers for this special financing of $100 down; (program is subject to change without notice, OAC).”

This week I’ll end with a few words of wisdom to our clients:

Pricing and presentation is vital in today’s market. Buyers are paying attention to new inventory and current price reductions so if you want your home to remain competitive in today’s market, you need to consider this fact. I urge you not to test the waters when you place your home on the market. You will prevail if you price your home competitively from the beginning and present it in its best light possible. Listen to your Agent! Once you do this, great opportunities abound.

Until next week,

Dan Christensen
Coldwell Banker Residential Brokerage Utah

A Rebounding Market

This week a Realty Times article provided some insight into a rebounding market. Here are the highlights:

• Pending home sales rose sharply, by nearly 7 percent, in the last month measured by the National Association of Realtors.
• Pending sales were up in all four major regions of the country—and that caught the attention of some key industry economists.
• Orawin Velz, economic forecaster for the Mortgage Bankers Association, said in a commentary that "the steady improvements in pending home sales are encouraging," and confirm the view that existing home sales hit their cyclical bottom in January and are likely to continue to rise in the coming months.
• Since the January low point, she noted, the Realtors' pending sale index is up by 13 percent.
• Mortgage rates continue to be favorable, an average of 5.3 percent last week for 30 year fixed rate loans, 4. 8 percent for 15 year fixed, and those rates are pulling in growing numbers of home purchase loan applications.
• According to the Mortgage Bankers Association's weekly survey, new applications to buy houses increased by nearly 7 percent in the week ending July 3rd.

My overall assessment of the market is that while we are still seeing challenges out there, the market continues to show some encouraging signs. The fact is, we’ve seen the low-end of the market doing well for a while, but its starting to cascade to other segments of the market. We’re starting to see more activity and interest in the move-up market and luxury market.

There appears to be growing consumer confidence from buyers, perhaps as the stock market has stabilized and real estate is showing improvement. Also, buyers in our offices are telling us that they believe that the market overall is starting to recover and they don’t want to miss out on the buyer’s market.

Now let’s take a look at this week in real estate:

• Davis County—The Bountiful office reports we have 2 or 3 Agents this last week report that they had been contacted by investors who are looking to move their money out of other markets and into real estate investments. Seems that they are looking for a safe place to park their cast and real estate is making more sense for them than many other investments. the good thing about this is that they are investors not looking to flip or make some quick cash, but are investors with long range plans for their property. Could we be turning back to some good old fundamentals? Short sales continue to be challenging and plentiful. With every transaction being a bit different than the next, it feels like we are shooting at a moving target. Several of our agents have a bunch of time invested in transactions that seem to drag on forever. It is also interesting to observe the many different ways that listing agents are handling short sales, which makes it difficult for buyer's agents to educate a buyer about the process; since it can be different depending on how a listing agent handles it. Our short sale package and new UAR short sale addendum have been helpful in attempting to standardize the process.
• Salt Lake County North—The Sugar House office reported we have been very busy the past week. Open houses are receiving good activity. The Union Heights office reported the holiday week slowed production with shorter time period, but momentum remains strong. The Salt Lake office reported total activity was off this week as we begin July with a holiday. Consumers are either just all away for summer vacations or they are losing confidence as there are more signs of weakness in the U.S. economy. Dismal job reports strike fear into potential buyers who decide to wait till the economy improves for fear of taking on payments they can't afford if they lose their jobs. Rates are still good, but not enough to overcome the fear of a weak economy.
• Salt Lake County South—Our Jordan Commons office reports short sales are going under contract. Price ranges in the high $300K are coming into the low 300's. Multiple offers are occurring under $200K. I had an offer accepted on a bank owned property over the weekend. There were four offers on it. We feel fortunate to get the offer accepted. While making appointments for this client, a lot of short sales and bank owned have multiple offers. There are buyers out there. In the Draper office what is fascinating is the people who choose to work July 3-5 did business. There are plenty of people wanting to buy/sell during the holidays and if you choose to work, you can get great business.
• Salt Lake County West—Our West Jordan office reports we are noticing an increase in multiple offers in the under $200,000 price range. We have recently taken listings under $200,000 that have gone under contract very quickly. Additionally, one Agent reports that in this same price range, when pulling five properties to show, by the time they call the Agents to make appointments 2 of the 5 are under contact. That's good news!
• Tooele County—Our Tooele office reports an extremely slow sales week. I would attribute it to the 4th of July holiday. Listing inventory almost the same.
  Utah County—
  Active Sellers in Utah County
  June - 2009 4442
  July - 2009 4378
  Down by 1%
  
  Active Buyer's in Utah County
  June - 2009 883
  July - 2009 1055
  8.4% increase in # of active Buyers in one month
  
  Multiple offers, in number of issues with short sales and banks (2nds) not
  cooperating & placing home into foreclosure.
• Weber County— Not much has changed with regards to the market. However, there is some concern around the potential for failed transactions with the new Mortgage Disclosure Improvement Act that will become effective on July 30th. We have noticed many low appraisals in the past few weeks, causing sale price changes.
  
  Commentary from Axiom Mortgage President Melissa Wright:
  
  “June saw many fluctuations in rates due to speculation that the economy had turned the corner. The good news for homebuyers is that rates have settled down and remain at historically low levels. Although there is a huge supply of government debt, there is still demand, with the U.S. Treasury auctioning off record amounts of government debt. The solid results have helped keep Treasury Yeilds lower, alleviating mortgage rate upheaval. Refinance activity has slowed, producing less supply on the market resulting in greater rate stability. The Federal Reserve announced they will keep the Fed Funds rate at an exceptionally low level for an ‘extended period’ due to inflation remaining subdued. They also reiterated their commitment to help rates remain low through their purchasing of mortgage-backed and Treasury securities. If the current factors remain unchanged, rates will likely remain at low throughout the summer.”

Regardless of the market or the reason behind the recent upswing, things are starting to pick up throughout Utah. It seems buyers are finally starting to get the message that we may have hit bottom and, as buyers take action, we’re slowly but surely working our way into a transitioning market.

It’s been a challenging ride but what we have to look forward to is exciting. Prepare. The coming months and into 2010 are going to be an exciting ride.

Make it a great week,

Dan Christensen
Coldwell Banker Residential Brokerage Utah

Existing Home Sales Rise For Second Straight Month

The National Association of Realtors released its existing home sales report which noted that existing home sales rose for the second straight month in May, signaling low prices and incentives are attracting buyers.

NAR says existing home sales, including single family homes, condos and coops rose 2.4 percent in May. It was the first back-to-back monthly gain in existing home sales since September 2005.

Sales of existing homes rose for the second straight month in May, signaling low prices and incentives are attracting buyers.
NAR chief economist Lawrence Yun had this to say, “Historically low mortgage rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates. First time buyers are also being drawn off the sidelines by the $8,000 tax credit which is helping to absorb inventory.”

The numbers could be even better if it weren’t for poor appraisals. While pending sales of existing homes—those with signed contracts but not closed—indicate stronger activity, some contracts are falling through from faulty valuations that keep buyers from getting a loan, said Yun.

And with that great news in tow, let’s take a look at this week in real estate:

• Davis County—Sales were slow in both the Bountiful and North Davis offices last week, but our Agents remain busy working. Many are working to hold deals together that are under contract. I’m consistently hearing that transactions are increasingly difficult to keep together for various reasons. Many Agents are feeling that for some reasons the buyers that they are working with are back to the “wait and see what happens” attitude, but we are not really able to pin why they are feeling like that at this point, since April and early May reported such tremendous sales activity relative to where we had been for the last 18 months or so. Markets above 400k remain difficult and we are seeing seller’s who really need to sell continuing to lower prices to attract buyers.
• Salt Lake County North—Our Salt Lake office reported buyers are reluctant to purchase because they think more housing stimulus and lower interest rates will be coming soon. Many of the under contracts are having problems with low appraisals which are being pulled lower by REO properties and short sales. Consumer confidence is good but they have been spoiled over the past few months with artificially low interest rates, creating unrealistic expectations. Many buyers will miss the opportunity of buying homes at these prices while waiting for rates to decline. The "smart money" is buying now, knowing that the market has bottomed and the only place for home prices and interest rates to go is up. The Union Heights office reported the market in general is starting to pick up in all price ranges but mostly below $350K. It remains to be seen if this is a seasonal adjustment or will continue with a upswing.
• Salt Lake County South—The Draper/Sandy office has seen some short sales approved, which is good news. The interest rate hike has actually been good. It has made many buyers fence sitters get moving. The upper end is still a buyer's market due to the excessive inventory. Our Jordan Commons office reports this: I'm finding that my first time buyers have debt and/or credit issues to clear up before they can buy. I'm not sure that will occur in time for me to meet the $8,000 tax credit deadline. One of my key clients' situation looks like a close call. If they go under contract by November 1 for a 30 day funding, and there is an extension requested by their lender because of an appraiser delay, my buyer could be out of luck.
• Salt Lake County West—Our West Jordan office reports Agents are reporting seeing more bank owned properties hitting the market within the past 2 weeks. We are experiencing somewhat longer delays in regard to the short sale approval process within the past month. Our ratified sales have remained about the same as last month.
• Tooele County—Our Tooele office reports listings keep slowly rising, out pacing solds. A slight decrease in closed activity and an even bigger decrease in ratified. A lot of showings..
• Utah County—The market is definitely changed for the better. Agents that I have not seen with business for a long while are doing business. Experienced Agents are doing significantly more business.
• Weber County—Business has been steady but still a little sluggish. We have averaged only about 10 under contracts per week for the past three weeks in both offices in Weber County. Sales in the lower and mid-priced ranges are indicative of where business is now.

Commentary from Axiom Mortgage President Melissa Wright:

“With recent economic and market changes, there are a number of bank-owned (REO) homes available for purchase. Fannie Mae is offering special buyer benefits for their REO properties listed for purchase on their HomePath website. These are well-priced properties of varying value with unique financing for easy purchase. With down payments as little as 3% for owner-occupied homes and 10% for second and investment properties, it’s a great opportunity for buyers. No mortgage insurance is required and no appraisal fees. The seller (Fannie Mae) will also contribute towards buyer’s closing costs.

All these benefits combine into a great opportunity for people considering purchase and trying to find great properties for a great price. Not every mortgage company can offer HomePath financing, but Axiom Financial (found under parent company PHH in the lender list) is a qualified lender for this program. Talk to your Axiom Mortgage Consultant to pre-qualify, then visit your real estate professional to begin the purchase process. Look for the HomePath Logo to find the homes eligible for this special program.”

http://reosearch.fanniemae.com/reosearch/

One potential challenge that may begin affecting our market is the rise in interest rates. I came across this CNNMoney.com article which explains why interest rates are on the rise: http://money.cnn.com/2009/06/19/news/economy/higher_inflation.fortune/index.htm. At this point, what we are seeing is the recent uptick is causing many fence sitting buyers to get off the fence and get in the market and in all likelihood that is a very good idea. We probably won’t see interest rates as low as they have been for at least another 20-30 years.

I also recently sat down with our friends at Axiom Financial to discuss interest rates, the future and what we can expect and based on that conversation, I will be focusing my July edition of Reality Check on this very subject.

Watch for it after the 4th of July holiday.

Until then, make it a great week.

Dan Christensen
Coldwell Banker Residential Brokerage Utah

Reinvigorating the Housing Market

This week there were some exciting change of events going on with the government. Realogy (Coldwell Banker Residential Brokerage’s parent company) President Richard Smith met with legislators regarding a positive development for the real estate industry. Specifically, the Business Roundtable (an association of chief executive officers of leading U.S. corporations)— of which Richard is the chair—issued a set of recommendations for the White House and Congress that are aimed at jump starting the housing market in order to stimulate a broader economic recovery.

The Business Roundtable’s recommendations are as follows:

· Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
· Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
· Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
· Make permanent the current temporary conforming loan limits; and
· Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.

We believe targeted, demand-side solutions—such as the ones Business Roundtable is recommending—will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole. To obtain a copy of the Business Roundtable press release and its Housing Working Group’s detailed recommendations, click here. To read an article that appeared in today’s online edition of The Wall Street Journal containing an interview about the Business Roundtable’s recommendations and why they are crucial to jumpstarting the housing market, click here.

Please understand that the legislative process is often a long and winding road that is hard to predict, but at some point in the future, we expect to call on you to make your voices heard in support of any new legislation in Congress that would advance these recommendations. We will communicate with you as these legislative opportunities occur—but for now, just know that we appreciate your support and are proud to be part of this initiative.

In other news this week, RealtyTrac released its foreclosure findings with positive news that foreclosure filings dipped 6% in May compared with April. But the news wasn’t all positive as the number is still 18% above this time last year. Essentially one in ever 398 homes received a foreclosure filing last month.

Here in Utah, the picture continues to be a bit more bleak. We are ranked No. 5 out of 50 states in foreclosure filings with 2,927 total filings or one in ever 316 households. Our numbers, however, are on the decline with a decline from April 2009 to May 2009 earning a 1.4% drop but from May 2008 to May 2009 earning a 115% increase. For a complete look at the USA Today story that ran on the figures, click here: http://www.usatoday.com/money/economy/housing/2009-06-10-may-home-foreclosures_N.htm#chart.

Now let’s take a look at this week in real estate:

• Davis County—The Bountiful office reports it must have been a full moon last week (full moon's make people a little goofy you know!) as both the Bountiful and North Davis offices had their share of transactional challenges. Funding problems, delayed underwriting, inspection problems, etc., seemed to be more prevalent than usual as Agents battled to hold transactions together. It seems that both buyers and sellers are a little more on edge and uncertain as transactions unfold. On the upside, we did see another decent sales week from both offices’ previous weeks’ sales had slowed significantly. I've had a few Agents comment that some of the buyers they are working with have been motivated by the recent uptick in rates, which seems to indicate that the attitude of "wait and see what happens" may be lessoning with consumers.
• Salt Lake County North—Our Salt Lake office reported that buyers had become accustomed to 4% interest rates and buyers were shocked to see the rates jump a full percent in one day. Many buyers returned to "fence sitting" hoping the rates will go back down. Once they realize they are not going down and that 5% is still a great rate, they will return to the market because consumer confidence is still strong. Many Buyers are taking advantage of both the $8K Federal First time Buyer tax credit and the Utah $6K Home Run grant but these grants are almost gone. There is lots of traffic at open houses and Internet leads which should convert to sales over the coming weeks! The Union Heights office reported the week was relatively stable form the previous week. We had several closings. The biggest factor is school is out which is driving new energy into the market.
• Salt Lake County South—Our Jordan Commons office reports working with mortgage brokers is becoming increasingly more difficult when adding the appraisal pool to the mix. Timeframes for appraisals are lengthening. Watch the dates! Working with Axiom gives buyers a better chance of closing on time. The issue I have been dealing with this past week has to do with lenders and appraisals. The particular lender that is being used is demanding that the loan be 100% approved before ordering the appraisal. The other requirement is that the buyer pay for the appraisal prior to the appraisal being ordered.
• Salt Lake County West—Our West Jordan office reports no real changes from last week.
• Tooele County—Our Tooele office reports listing inventory is identical to the last three weeks. Sales are up, but not robust and ratifies are consistent at about 16 per week. A lot of short sales are waiting third party blessing.
• Utah County—The market is definitely changed for the better. Agents that I have not seen with business for a long while are doing business. Experienced Agents are doing significantly more business.
• Weber County—The Ogden office reported new listings have decreased slightly. However, buyers are out and writing offers. Homes that are selling are ones that are accurately priced and competitive. Business was up this week slightly over the past weeks. Agents are reporting increased activity up to $342,000.

Commentary from Axiom Mortgage President Melissa Wright:

“Mortgage Rates have shot up over the past several weeks to levels not seen since last November. Homebuyers who have sat on the fence are now faced with rates up to a full point higher than they were just 3 weeks ago. Rates are still at historically low levels, but they can move upward very quickly. So why the sudden increase in rates after several months of extremely low and relatively stable rates? Simply put its supply and demand.

All the refinance activity that has occurred over the past several months is now hitting Wall Street as Mortgage Backed Securities (MBS). In addition, the U.S. Treasury has been auctioning off huge amounts of debt. The added supply, along with stronger than expected economic reports, mixed with inflation fears has forced Mortgage Rates up very quickly.

There is talk that the Fed may expand their MBS purchasing program when they meet later this month, but there is only so much the Fed can do when there is so much supply on the market. These elevated rates have slowed the flow of new refinance activity, which will eventually lead to less supply in the market and greater stability. Until then, volatile conditions will likely continue and rates could change very quickly. But remember: even with the recent uptick, we are still looking at incredibly low Mortgage Rates and it’s still a great time to buy.”

Visit our website to request your free weekly Market Watch Report at www.axiomfinancial.com.

I did want to let you all know that I will take a brief hiatus from Weekly Market Watch next week but will return the following week with another robust edition.

Until next week,
Make it a great one,

Dan Christensen
Coldwell Banker Residential Brokerage Utah

Showing Activity In the Entry Level and Mid-Level Markets Continues to Rise

Now that school is almost out, we’re finding many families are starting to look at homes in anticipation of getting settled prior to next school year. Showing activity, in many markets, has increased considerably.

Sellers are now getting their homes on the market and, in general, seem to be quite knowledgeable regarding staging and pricing. The homes in the entry-level market, for the most part, are moving well if they are in good condition and fairly and competitively priced. Several Agents whose clients’ listings are in the entry level market are reporting that they have had buyers lose out on homes in bidding wars. Could they be back? The competition for well priced homes in good condition is heating up and we are seeing multiple offer situations in most of our first time home buyer markets.

Though we have seen sporadic increases in the upper end market, it is still relatively slow on showings and closings but we do anticipate that that sector will loosen somewhat if the economic news continues to show some stabilization and an upswing.

Before I get into the week’s top news, what I would like to share is that LORE Magazine and The Wall Street Journal this week released their Top 400 list. You may view it online at http://online.wsj.com/ad/top400-articlecontinued.html. Many of our own Coldwell Banker Residential Brokerage colleagues we’re recognized within this coveted ranking and for that—along with all of their hard work and dedication—I salute them.

The most notable news this week was The Mortgage Bankers Association’s (MBA) release of is Weekly Mortgage Applications Survey for the week ending May 29, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 658.7, a decrease of 16.2 percent on a seasonally adjusted basis from 786.0 one week earlier but was 14.4% higher than the same week a year ago. This increase is due, largely in part to the first time home buyer market which, as we know, has been vastly stimulated by a triple threat combination of low interest rates, the $8,000 first time home buyer tax credit and increased affordability. Together these incentives are finally getting buyers in the first time home buyer market off the fence and into the market which—once we get through the large number of REOs on the market—we should finally start to see some price stabilization.

But for those of you who are waiting for your homes to come back to their pre-recession values, be prepared to wait. A recent study that I read notes that real estate is now as affordable as its has been in the past 38 years (this of course relates to median homes when compared to median mortgage rates and incomes).

The fact is, the peak of unaffordability was in 2006, when an average family in the United States needed to spend 44% of their income to purchase an average single family home. Today, housing affordability in the United States is up to 73%. This means 73% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the national median income of $64,000.

A couple of other interesting articles of note this week:

- RISMedia’s First Time Home Buyers Grabbing Houses and Tax Credit (http://rismedia.com/2009-06-03/first-time-home-buyers-grabbing-houses-and-tax-credit/)
- Realty Times Multifamily Builder Confidence Up From Record Lows; Interest From Prospective Renters and Buyers Rises (http://realtytimes.com/rtpages/20090603_confidenceup.htm)
- Realtor.org Pending Home Sales Up For Three Months in a Row (http://www.realtor.org/press_room/news_releases/2009/06/phs_up)

Now, let’s take a look at this week in real estate:

• Davis County—Sales were slow in both the Bountiful and North Davis offices last week, but our agents remain busy working. Many are working to hold deals together that are under contract. I’m consistently hearing that transactions are increasingly difficult to keep together for various reasons. Many Agents are feeling that for some reasons the buyers that they are working with are back to the “wait and see what happens” attitude, but we are not really able to pin why they are feeling like that at this point, since April and early May reported such tremendous sales activity relative to where we had been for the last 18 months or so. Markets above $400,000 remain difficult and we are seeing seller’s who really need to sell continuing to lower prices to attract buyers.
• Salt Lake County North—Our Salt Lake office reports market activity is strong but has slowed in the past couple of days with increasing interest rates. Buyers are spoiled with the 4% rates of the past few months. We may see a week or so pause in activity as buyer's adjust to 5% rates. Demand is good so I would expect improvement in the market to continue. Our Union Heights office reports the market in general is starting to pick up in all price ranges but mostly below $350K. It remains to be seen if this is a seasonal adjustment or will continue with a upswing. Our Sugar House office reports we have been very busy the past week. Open houses are receiving good activity.
• Salt Lake County South—Our Jordan Commons office reports that we are still hearing lower priced listings are selling. My Spurrier Rd listing, $164,900, now has had 3 back up offers about $154,000. We had one multiple offer situation, buyers did not want to revise their offer. Sellers seem to be more willing to improve the condition of their homes versus negotiating on the price.
• Salt Lake County West—One Agent reports the following in regard to South Jordan: “Seller in South Jordan had their home on the market April 2008 for 188 days with no sale or offer. When I did comps of "solds" of like homes, there were 6 sales in the past 90 days and 3 of them were short sales with 23 like homes "active" and 2 under contract. There are a few buyers in the price range, but absorption rate is 8 months. Sellers will list their home aggressively at $30,000 lower than the listing a year ago. There continues to be a correction in South Jordan market.” Another reports: “I have had 3 offers written, called the other agent to send over, and they were under contract.” A third agent reports: “My thoughts are that the market is moving especially in the price range under $300K. I have 3 recent contracts and agree that the buyers are still looking for the BEST deal and sellers are aware that if they take less for their own property that they will most likely pay less as well when they select another property. Value is only a mind set. When the seller sets their mind to sell, it will happen!”
• Tooele County—Our Tooele office reports listing inventory is stable. Sales activity remains slow. The fall rate has to be increasing because under contracts are not translating to closings. Also, it's taking a lot longer to close transactions.
• Utah County—No major changes week to week.
• Weber County—We have seen a noticeable increase in showing requests. We had a marked increase for about two weeks which was good. Listings which are priced accurately are seeing good offers. Down payment still seems to be the major issue. However, business just remains steady. High end listings $350K and above are seeing a huge increase in showings and several are now pending. Month end for May included 50 new listings, 41 under contracts and 40 closed. Compared to 2008 we had 39 new listings, 42 under contracts, and 36 closed transactions. Agents are reporting increased activity on their listings. One Agent reports multiple offers and has accepted a backup offer on one of their listings. Another Agent reports the sale of a home that had been on the market for 11 months with no activity. Business has picked up for the third week in a row.

I am also pleased to provide you with this commentary from Axiom Mortgage President Melissa Wright:

The Facts about the $8000 Homebuyer Tax Credit Program:

Most people have heard about this First Time Homebuyer program by now, but this information may help to clarify some of details of the program. You’re a “first time homebuyer” if neither you, nor your spouse, have had ownership interest in a property for at least 3 years. When using the tax credit, you must occupy the home for 3 years from purchase, or you will be required to repay the credit.

If you’re married and filing separately, the tax credit is cut to a maximum of $4000. If you make over the $75K/$150K AGI limit for individuals/married couples, you may also see a reduction in the credit you qualify for but still see a significant benefit. One interesting fact is that the tax credit may be applied to either your 2008 or 2009 tax liability, and it is refundable – meaning that you can receive the difference between what you owe in income taxes and the tax credit refunded to you.

This program is a solid stepping stone to those considering buying their first home, but is limited to purchasing your home by November 30, 2009. For full details on this program, contact your Axiom Financial Mortgage Consultant today at www.axiomfinancial.com or 1.888.656.LEND.

Conditions apply. Programs and rates are subject to change without notice. Consult a tax advisor before choosing this program. Not an offer to lend. Axiom Financial is an Equal Housing Lender providing mortgage services.

I’d like to leave you with this. It is an excerpt of an article I found online that I think really should get us all thinking. As I visit our offices, what I hear from most is that things are changing and I think many of us agree—at least as far as the housing market is concerned—it seems we are on the path to recovery. Having said that, there are some buyers and sellers out there who continue to wait. For those of you (and you know who you are), please read on:

“…If you're a buyer, buy because you love what you're buying. Buy because the lifestyle you're looking to live can more easily be accomplished with the purchase than without. If you're selling, sell because you want to sell. Sell because you need to sell. Sell because your neighbor is driving you crazy. Sell because the house you've always had your eye on just hit the market. Sell to move up in the market. Sell to downsize. Sell to liquidate, but if you really want to sell, just sell already. If you're waiting to sell until markets rebound, please realize that doesn't mean to list in October. That means you'll be listing several years down the road, and the reason you were planning on selling in the first place might not exist at that magical time in the future. None of us are promised today, let alone tomorrow. Let alone 6 years from now when you can possibly sell your home for 15% more money.

If you're in no hurry to sell, do your neighbors a favor and take your home off the open market. If you're wanting to sell, be realistic in your asking price and aggressive in your hunt for a buyer. If you're a buyer, John Burns seems to be telling you that it's a pretty good time to buy. I'm telling you it's a good time to buy, and my reasons are not the same as Mr. Burns'. Buy because you want to. Buy because you can. Buy because you know the purchase will make you look like a real estate savant 15 years from now. Welcome to 2009 and the new rules of real estate. Sell low, hopefully buy lower.”

And with that, I’ll bid you adieux.

Until next week,
Make it a great one,


Dan Christensen
Coldwell Banker Residential Brokerage Utah

Memorial Day is Over…Soon-to-be-Summer Selling Season Off to a Good Start

With Memorial Day behind us and the busy summer selling season about to begin, some interesting trends are landing in our laps.

First, NAR this week announced that existing home sales rose in April with strong buyer activity, in, as expected, the lower price ranges. Nationally, existing home sales increased 2.9% to a seasonally adjusted annual rate of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5 percent below that 4.85 million-unit level in April 2008.

Most of the sales are taking place in lower price ranges but in a positive trend, we are seeing increased activity in the mid-price ranges. This is all a domino effect. A turnaround begins with the lower price range homes and once that sector of the market is stabilized, we begin to see changes in the mid and upper price ranges. The upper end, though we have seen increased activity, still is slow but we fully anticipate that this will change over time, too.

Many of you are asking me questions about the moratorium on foreclosures. In many markets we’ve had a foreclosure moratorium set forth by Fannie Mae and Freddie Mac as they wanted servicers to reduce interest rates, delay back payments and penalties, stretch the length of the loan or defer payments on part of the principal. The moratorium is likely going to be lifted soon and foreclosed properties are going to be released into the market starting (in many markets) in June and moving through the remainder of the year. In order for a recovery to be sustainable, we really need to clear through those distressed homes so we can begin to sustain a price recovery.

In markets like California, this moratorium has really hindered sales. The demand for housing is outrageous as buyers anxiously await the inventory to increase so they snatch up the listings. In some cases they are seeing 15, 20 offers on properties as they hit the market. The June release of the moratorium is expected to alleviate some of that demand.

While the moratorium has impacted us in some ways, I’m not overly concerned about it here. One reason is that we have had less of a bubble here as compared to other markets in the country. I truly believe that we’ve seen the worst and locally we’re headed in the right direction. Our weekly updates showcase that fact and in analyzing the office data I think we can safely assume that the worst is behind us.

Here are some local articles of interest this week that I wanted to be sure you saw:

http://money.sltrib.com/story.asp?ID=3862518
http://money.sltrib.com/story.asp?ID=3718294
http://www.deseretnews.com/article/1,5143,705307159,00.html
http://www.deseretnews.com/article/1,5143,705307031,00.html
http://www.deseretnews.com/article/1,5143,705307156,00.html

Definitely worth the read and a great reminder of why we call this special place home.

Now, let’s take a look at this week in real estate:

• Davis County—Sales in the Bountiful office were a little slower last week than they have been in the last few months. Many agents have multiple deals under contract now and are managing that process which may be leading to a slight decline in new pending business. The North Davis office had a good week with 11 sales for the week. Both offices are seeing buyers who have made offers on short sales begin to look at other opportunities as the short sale process is a bit lengthier than they anticipated.
• Salt Lake County North—Our Salt Lake office reported that Memorial weekend slowed activity but there were still lots of sales ratified. The market continues to see lots of activity in the lower price ranges with multiple offers on many of these transactions. Short sales are getting approvals and closing after waiting for months. Activity is increasing between $350K and $450K as equity is freed up in lower price ranges and these buyers are buying up the bargains. Union Heights reports that activity remains unsteady.
• Salt Lake County South—Our Draper office reports we have a surplus of homes above $800,000 range. Many owners just owe more than the current market is willing to bear. The condo market still has excess inventory as well. Anything that is not a short sale and bank owned, with a good floor plan in the South end of the valley under $250,000 is seeing significant activity, and many homes are seeing multiple offers. Our Jordan Commons office reports one Agent’s interesting note that Thursday she called to show homes for two separate buyers, a total of 12 homes. Three of them were under contract which hasn’t happened for a while. Yesterday, she went to write an offer on one of the properties and it too was now under contract. When we’re preparing CMAs for sellers, there are now a lot more sold and under contracts showing up to use as comps.
• Salt Lake County West—Our West Jordan office reports our sales really spiked in the last couple of days! We have had multiple offers on three non-short sales properties this past week (each of these are homes that has been listed for a few months with recent price reductions). We’ve got many busy Agents!
• Tooele County—Our Tooele office reports a very slow holiday week.
• Utah County—Utah County has 4431 active sellers and 1011 active buyers in the market for the last 30 days; this is slightly more than a 4 month inventory. 83% of those buyers are purchasing below $300,000, and 69% of the active sellers are currently priced below $300,000, which is why our median price keeps dropping. The market is definitely changed for the better. Agents that I have not seen with business for a long while are doing business. Experienced Agents are doing significantly more business.
• Weber County—Business is still off the 2008 numbers, but seems to be picking up. Agents are reporting increased buyer activity and title companies have reported increased business. Sales from 100,000 to 300,000 are strong. Fewer sales above 300,000.

Finally, this week I am pleased to share a special guest commentary from Axiom Mortgage President Melissa Wright. Check out what Melissa has to say:

Many consumers have questions about the $6000 Utah Home Run Grant, and whether they can still take advantage of the program. With only 468 grants left (as of 5/27/09), time is of the essence. The program is designed to help buyers purchase newly constructed, never-occupied homes and lighten the inventory of new homes on the market. The grant funds are available at time of closing and can be used towards down payment, closing costs or even cash in pocket! You don’t need to be a first time buyer, but if you are, the grant can be used in conjunction with the $8000 Homebuyer Tax Credit for a total $14,000 benefit. With income limits are as high as $75K/$150K for single/married couples, the grant is available to a wide range of buyers who will occupy the home as their primary residence.

The first step to taking advantage of the grant is to talk to your mortgage consultant. They will help you become an approved buyer and apply for your grant so you and your Realtor® can find your new home.

For more information on this exciting Utah grant program, contact your Axiom Financial Mortgage Consultant today at www.axiomfinancial.com or 1.888.656.LEND.

Historically speaking the week of Memorial Day quiets things down in the housing sector but this year it was a bit different. Thanks to the $8,000 first time home buyer credit, low interest rates and increased affordability, buyers in the first time home buyer market are out in droves and really are snatching up properties. Now that Memorial Day is behind us, we’ll probably see a week or two of quiet yet brisk activity until school is out and then…let the floodgates open. The summer selling season will be in full force.

Until next week,
Make it a great one,

Dan Christensen
Coldwell Banker Residential Brokerage Utah

NAR Announces Housing Affordability Highest in 18 Years

For months I’ve been sharing that this is one of the best times to purchase a home in decades. Well this week the National Association of Realtors underscored that fact with the release that nationwide housing affordability jumped 10 percentage points during the first quarter of 2009 to its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The HOI showed that 72.5% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the national median income of $64,000, up from 62.4% during the previous quarter and up from 53.8% during the first quarter of 2008.

Locally, the story is similar. In the Ogden-Clearfield area, 74.4% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the area’s median income of $68,500. That’s up 5% from the previous quarter and up 13% from the same period a year ago.

In Provo-Orem, 65.3% of all homes sold were affordable to families earning the median income of $62,900. That’s up 12% from the previous quarter and up 21% from the same period a year ago.

In Salt Lake, 65.9% of all homes sold were affordable to families earning the median income of $67,800. That’s up 7% from the previous quarter and up almost 20% from the same period a year ago.

For complete details on the report, click here: http://www.nahb.org/page.aspx/category/sectionID=135

Also, last week I shared with you the importance of our upcoming short sale training. Well this week I came across this article which I think helps to further paint the picture for you: http://rismedia.com/2009-05-18/distressed-properties-and-first-time-home-buyers-the-recipe-for-real-estate-recovery/

I’d also like to share a couple of other stories of interest from the week:

• http://rismedia.com/2009-05-20/buyer-interest-in-foreclosures-spikes-says-survey/
• http://www.nytimes.com/aponline/2009/05/19/us/politics/AP-US-Economy.html?_r=2&scp=17&sq=housing&st=nyt

Finally, many of you have asked me questions about the potential changes in the $8,000 tax credit (http://www.realtor.org/RMODaily.nsf/pages/News2009051202?OpenDocument). Essentially the U.S. Department of Housing and Urban development announced that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 first-time homebuyer tax credit as a down payment. FHA's approved lenders will be permitted to "monetize" the tax credit through short-term bridge loans. This will allow eligible buyers to access the funds immediately at the closing table. Here is a CNN Money article which explains some of the details: http://money.cnn.com/2009/05/18/real_estate/tax_credit_as_downpayment/index.htm?postversion=2009051912

While it is an exciting turn of events I would caution you that the execution of this is quite complicated and it may take some time before it becomes a reality. HUD will authorize lenders, non-profits and certain agencies to provide a bridge loan which will then be reimbursed at the time of tax refund. These players are not yet identified. Again, an exciting turn of events but the execution and timing of it have yet to be fully outlined. Watch for more to come.

And with that update in tow, let’s take a look at this week in real estate:

• Davis County— In Davis County Agents are seeing increased traffic through open houses. Buyers seem to be getting more excited about interest rates and are asking more questions about if it’s a good time to try to make a move. Excitement is building for the community yard sale taking place June 6 at North Davis. Several clients have been dropping off items to donate and agents are getting leads from contacting past clients about the event.
• Salt Lake County North—Our Salt Lake office reports that the market is a little slower this week but activity is still good at open houses. Buyers are putting many homes under contract and then withdrawing from the deal during the due diligence either due to physical conditions or low appraisals. Many of our buyers are also getting beat out on short sales due to multiple offers. These buyers are starting to understand they need to be aggressive on their offers to get them accepted in the lower price ranges. Our Union Heights office reports more activity. There is increased activity in almost all price ranges. We are having a very active market with more and more multiple offers. Our Sugar House office reports that sales are occurring in price ranges from $100,000s to mid $400,000. Most are in the $200,000 to $300,000 range.
• Salt Lake County South—The market trend is, "Tell your buyers to hurry and buy before they miss out!" Seriously! 90% of the short sales have 3-4 offers and some close to acceptance from the bank due to three months plus long wait. I think the inventory is just starting to weed out. Buyer's Agents are first asking if we have any offers? Agents are also calling back to get more details after a showing. For $215K I've had on an average two showings a day. Buyers have more realistic news about the market, are getting financing in order; before making a decision to choose a Realtor or see homes. I have noticed the last five listing appointments I have done this week have actually had solds and under contracts for the CMA, where the three months prior, most of the market areas I searched did not. I was lucky to find three good sold and under contract comps. That means more things are selling. With my 20 listings, I have gotten a lot more showing calls the last two weeks. Our Draper office reports two closed sales - 1 buyer controlled and 1 seller controlled in a multiple offer situation.
• Salt Lake County West—Our West Jordan office reports that our office has a large number of short sale offers hanging out there waiting for bank approval. This prompted a look into the actual percentage of active listings that are listed on the MLS as short sale in the cities in the south west part of the Salt Lake Valley. The data represents single family and condo listings. The percentages are: Herriman 35%, Riverton 25%, South Jordan 23%, West Jordan 19% and Taylorsville 19%. That does mean, however, that 76% of the active listings in those cities combined are NOT short sale.
• Tooele County—Our Tooele office reports that accepted offers have slowed but are still higher than first quarter. Closings are up slightly. Agents are busy but having a difficult time putting transactions together.
• Utah County—The market is definitely changed for the better. Agents that I have not seen with business for a long while are doing business. Experienced Agents are doing significantly more business.
• Weber County—One of our under contracts was at $422,500 just under the $500,000 Previews (luxury listing market). Agents are reporting higher activity on their listings with more showings and offers. We're still off 2008 numbers for April, but only by 4% compared to 50% in January. Average sales price is up over 2008 numbers slightly.

As we head into this long, three day weekend I’d like to wish everyone a very happy Memorial Day weekend. Enjoy your time with BBQs, sunshine, maybe a little swimming and (hopefully) a home sale or two.

Until next week,
Make it a great one,

Dan Christensen
President
Coldwell Banker Residential Brokerage Utah

Recent Housing Stats Are Showing Encouraging Signs for Market

This week I thought I’d share some positive stories that continue to permeate not only our local news but on a national level as well.

The National Association of Realtors® said its Pending Home Sales Index, based on contracts signed in March, rose 3.2% as first-time buyers waded into the market to take advantage of favorable prices and mortgage rates.

A report from the U.S. Commerce Department showed construction spending rose 0.3% in March, the first increase in six months.

The pending home sales report added evidence that sales have reached a bottom. “That's critical because once sales bottom, it's only a matter of time before you work off excess inventories. That's the key to stabilization in the financial system and the economy at large. We're closer to that than people thought just a few months ago.”

-- Michael Darda, chief economist at MKM Partners in Greenwich, Conn., “Sales and Construction Data Lift Hopes for Housing,” by Lucia Mutikani, Reuters, May 4, 2009.

On a national basis, the forces driving real estate right now are increasingly turning positive and encouraging.

• Home sales in major markets around the country have shown dramatic gains in the past month.


• In Florida, statewide sales jumped by 30% in March over year-earlier levels, and were up 33% over the previous month. Even condo sales were up by 25%.


• In California, statewide sales rose 64% in March compared with March 2008. Unsold inventory is now just five months -- that's down from 12 months the previous March.


• Median house prices may be bottoming out. The California Association of Realtors® reports the median price of homes sold was up by 2.2% for the past month.”
  
  -- “Real Estate Outlook: Sales Rising in Some Areas,” by Kenneth R. Harney, Realty Times, May 5, 2009.
  
  Also interesting to note:
  


• The current price level of homes seems to be drawing more buyers into the market, according to Jim Gillespie, president and CEO of Coldwell Banker Real Estate. “We are seeing a lot of activity across the nation. Of course we're in the spring market, but we've seen more buyers in the market now than at this same time last year.”


• “Home prices are where they should be. Sellers are accepting the current reality and are pricing more realistically," said Robert Abbott, co-owner and VP of a northern New Jersey brokerage. “More people are not only 'kicking the tires' but actually buying right now. We are showing significant activity when it comes to sales. The number of days for a house on the market is going down.”
  
  -- “More Homes Get Multiple Offers; Downturn May be Nearing End,” by Julie Schmit, USA Today, May 6, 2009.
  
  Multiple bids have picked up in recent months in California and other states hit hard by foreclosures and steep price drops, real estate executives say. “If a house is in a good neighborhood, is maintained and is a good value, it'll get multiple offers. One in 10 homes now draw multiple offers, up from one in 30 last fall.”

-- Julie Holt, owner of a title services company in Florida, “Is Now the Time for Some Home Buyers to Make a Deal?,” by Mark Koba, CNBC, April 28, 2009.

So what does all of this mean for our local market?

Well for starters, we’re definitely starting to feel the effects of the short sale and foreclosure phenomena. It seemed a year ago we were almost immune to it. But, alas, a report released earlier this week noted that Utah saw an increase of 120 percent in foreclosure-related filings over the past year and now we have the sixth highest rate among all states. Here is the online story from the Salt Lake Tribune: http://www.sltrib.com/ci_12364153?IADID=Search-www.sltrib.com-www.sltrib.com

I pulled the stats so you could see a local by county comparison and Utah County has the highest percent total with 20.2% of all listings being short sales. Salt Lake County follows closely behind with 16.8%.

To help our Agents prepare for and be properly educated on the process of short sales, later this month we will be launching a Short Sale Training Seminar that will help streamline the short sale process. It is the first program of its kind to be developed by a residential brokerage firm in Utah. The program is in response to the unprecedented challenges some homeowners face in today’s market. The new training streamlines short sale transactions for lenders and educates the public and our Managers and Agents about the short sale process. If you haven’t yet signed up for the training, I encourage you to do so as soon as possible. It’s a training you and your clients can’t afford to miss.

And with that news in tow, let’s take a look at this week in real estate:

• Davis County—Our Bountiful office reports that sales have slowed compared to the previous two weeks. The market under $225,000 is really moving well with new listings. Strangely enough, homes that have been on the market for awhile, even if they are in that "Hot" price range do not seem to be attracting as much attention as the new listings. Our North Davis reports several failed transactions this week for various reasons. Appraisal issues (i.e. not enough data to support sales price) starting to surface more regularly. We did have a listing in Riverdale at $189,900 sell in about a week which we haven't seen in quite some time.


• Salt Lake County North—Our Salt Lake office reported that sales are strong with stabilizing process. Offers are within 95% of asking price on homes under $300,000. In the luxury market, bargain hunters are out there but the market is soft due to limited financing and consumer confidence. Sellers are entering the market in increasing numbers as they want to take advantage of low interest rates. Sellers are becoming buyers on the home they want to be in before value begins to appreciate. Market is beginning to move in all levels under $500,000. Our Union Heights office reports more activity each week. There is increased activity in almost all price ranges. We are seeing a very active market with more and more multiple offers.


• Salt Lake County South—Our Draper office reports that listing inventory was down a little from the previous week and sales activity was up. Our Jordan Commons office provided this update from one of its Agents: My listing on 7704 S. Lincoln had 11 showings last week and one offer. It's still in the negotiation process, but it has only been on the market 10 days. I still have had some great activity on my listings from CB Connect and have picked up a couple of good leads from that. I do have four other leads. There is a sense in the market place that the economy may have hit bottom so buyers are trying to move forward to get the best deal they can before the market changes to a seller's market. I am also seeing some really well qualified buyers who have strong financials moving forward due to this reason.


• Salt Lake County West—Our West Jordan office reports that we had a large number of offers written last week on short sales. We have buyers who have offers in on multiple short sales and are waiting to see if they can get one approved. Interestingly, we are starting to see buyers getting tired of the wait and wanting to look at only “non-short sale” properties. In the past six weeks we have only had two properties go under contract that were over $500,000. The majority have been between $200,000 and $300,000. We had a total of 98 properties go under contract in the West Jordan, South Jordan, Riverton, Herriman and Bluffdale area this past week; 72 of them were under $300,000.


• Tooele County—Our Tooele office reports that Agents are extremely busy. Buyers are still hesitant to make offers. The fall off rate is really high. Most short sale buyers fall off even after price is approved.


• Utah County—Our Orem office reports we are starting to see multiple offers not only on short sales, but under the $300,000 price range. The inventory has depleted and many areas are starting to see a turn towards a sellers market. You will never see prices like this again; if you want to buy a $1,000,000 home for $500K, don't wait. You may want to get out there and buy now.


• Weber County—Our Ogden offices report that we are seeing an increase in business in both listings and sold. The most exciting thing we are seeing is an increase in average sales price. What this means to us is that homes are selling in higher price ranges. We also saw brisk sales in the $100,000 to $250,000 price range. Homes above $300,000 are starting to move with several open between $300,000 & $439,900. Agents report a few multiple offers with at least one home selling for over full price.

Overall I think the market is showing some definite signs of recovery. Even with the increase in short sales—or possibly because of—buyers are finally starting to get the sense that now is a good time to buy and that if they wait, they may loose out on one of the best times in Utah history to purchase real estate. It’s an exciting time so make use of it!

Until next week,
Make it great one,


Dan Christensen
President

Stress Test Reveals There’s More Work to Be Done By the Banks But The Local Real Estate Market Continues to Thrive!

This week the results of the long-awaited Stress Test on the banks were released. What the government hoped to accomplish through this Stress Test was to determine how much more capital the banking sector would need to withstand the recession—much of which was caused by residential mortgages and other consumer loans such as credit cards. The result was that 10 of the nation’s 19 largest banks will need to raise a total of $74.6 billion in capital. The Stress Test revealed that banks like Goldman Sachs and J.P. Morgan seemed to be better positioned than Citigroup and Bank of America.

At this point, according to Kiplinger, “The stronger banks will actively do what they can to return any money borrowed from the government to get out from under restrictions on dividends and executive compensation. Their ability to sell common stock to the public is far better than their weaker counterparts, who may have to privately sell stock to investors or raise capital with so-called mandatory convertible preferred shares.”

According to industry analysts, it seems that until the banks get back on their feet, credit will continue to be tight. That leaves the Federal Reserve responsible for filling in the gaps with its own lending programs aimed at jump-starting lending.

On a brighter note, however, the real estate sector of our economy continues to show some positive signs—a good symbol that the programs that the government has put in place are helping. USA Today reported earlier this week that “More homes for sale are attracting multiple offers as buyers pursue lower-price homes and banks low-ball asking prices to attract competing bids on foreclosures.” It’s exactly what we’ve seen locally. Just as I revealed in an earlier blog posting, the first time, entry level home buyer market is fueling this recovery. It’s something we certainly forecasted and it’s finally coming to fruition. Now, we’re seeing, in many markets, multiple offers on starter homes and even some frustrated buyers who are scratching their heads and wondering what happened to the buyer’s market. We warned that the change could come before we knew it and in some price ranges, it might’ve already come and went.

Here are some links to some interesting, positive news stories from the week:

• USA Today: More homes get multiple offers; downturn may be nearing end (http://www.usatoday.com/money/economy/housing/2009-05-05-foreclosure-home-sales_N.htm?loc=interstitialskip)
• Business Week: Want to Sell Your Home? Lower Your Price (http://www.businessweek.com/lifestyle/content/may2009/bw2009055_075566.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis)
• RISMedia: Relocation.com Survey Shows Consumers Moving Further Due to Economy (http://rismedia.com/2009-05-05/relocationcom-survey-shows-consumers-moving-further-due-to-economy/) – This is a good reminder to consumers on why they should choose an Agent who is affiliated with a large, global real estate company that has the breadth and influence to reach the largest pool of buyers.
• NYTimes: Where Home Prices Crashed Early, Signs of a Recovery (http://www.nytimes.com/2009/05/05/business/economy/05turnaround.html?_r=2&hp)
• Realty Times: Real Estate Outlook: Sales Rising in Some Areas (http://realtytimes.com/rtpages/20090505_realestateoutlook.htm)

Now, let’s take a look at this week in real estate:

• Davis County—Our Bountiful office reports that April closed out with another strong week of sales, though it is important to point out that there are still challenges once deals are under contract and seeing them through to closing can be difficult. Current production seems to be steady but not increasing. We have had many inquiries from buyers about seller finance and lease option opportunities. We have seen some walk-in traffic. One buyer this week will be able to take advantage of nearly $20,000 worth of incentives on new construction as the builder will pay all of his closing costs, the state will give the $6,000 incentive and the Fed will kick in another $8,000 tax credit. Couple that with a 5% or lower interest rate and that buyer is feeling like this isn’t such a bad time to buy!
• Salt Lake County North—Our Salt Lake office reported that sales are strong as buyers are gaining confidence in the market and seeing many of the buyers taking advantage of the stimulus grants for first time home buyers and the state Home Run Grant. With inventory shrinking we are seeing multiple offers that are closer to list price stabilizing the market. An estimated 20% of our sales are currently short sales or REOs and as this inventory is removed from the market we should see prices start to rise in the coming months. Our Union Heights office is reporting more activity each week. There is increased activity in almost all price ranges. Very active market; we’re seeing more and more multiple offers. Our Sugar House office reports that the market seems to be steadily picking up thanks to low interest rates. Buyers are starting to jump off the fence. We may see more investor activity with the new Home Path Loan.
• Salt Lake County South—The Draper office had the most under contracts in one week year to date. We also had the most closed transactions in one month year to date. Draper is starting to see a rise in activity. The Jordan Commons office reports lots of activity on listings up to about $275,000, which is where the multiple offers are. Listings that have been sitting awhile are getting showings and offers. Some Agents are seeing "lowball" offers from both investors and owner occupants. Many people are looking for a deal. West Valley City is out of grant money at the moment, but hopes to have more in July or August. Sellers are being more realistic about what they have to do with pricing and condition to get their homes sold. Good, positive feedback from sellers and buyers.
• Salt Lake County West—Our West Jordan office reports that several Agents have reported that when they are taking a buyer back for a second showing on a property, they discover that it's already gone under contract. Buyers, it’s important to be aware!
• Tooele County—Our Tooele office reports that we had 26 accepted offers which marks the sixth week in a row of 25+ accepted offers. This is very good for our area. We should see a jump in closings as a result.
• Utah County—No information reported.
• Weber County—Our Ogden and South Ogden offices report that the market seems to be picking up with sales ranging $94,500 to a large land transaction for $1,750,000. Things are looking up!

What do we do with this information? Spread the word! It’s one thing for me to talk about a recovering market but it’s another when even the most pessimistic analysts are doing the same. The stories above share the real story. All of our offices are reporting similar stories and as I visit our offices and talk with our Agents, I’m hearing the same scenario: the market is changing.

The window of opportunity has been open and it has been inviting buyers in for months. Now, the buyers are acting and if you were sitting, cooling your jets, it may be time to start your engine! Don’t wait until you’re kicking yourself and saying, “I should’ve bought a lot more real estate.”

Until next week,
Make it a great one,

Dan Christensen
President
Coldwell Banker Residential Brokerage Utah