Logan Interest Rates/Home Prices Down

Interest Rates on 30 year fixed rate mortgages are the lowest they've been in over two years. I've even seen some mortgage quotes for as low as 5.5%. This makes a huge difference on your monthly payment. A 1% interest difference on a $150,000 loan is $125 a month. Just a few months ago the average 30 year fixed mortgage rate was inching close to 7%.

In addition to increased affordability on home loans, there is also increased home selection. Although home prices haven't actually gone down in Cache Valley, there is more inventory and more selection than there was during the summer. You are more likely to get a desirable home in your price range than you were six months ago.

During the cold winter months there are fewer people who want to buy real estate (less competition for you). Homes are on the market for longer periods of time. Many owners of vacant homes are extra motivated to sell; it's no fun paying to heat a house nobody lives in, and it is even less fun to pay the mortgage on that house. Sellers will often settle for less just to avoid having to make extra payments for a few more months.

If getting a deal on real estate is a priority to you, now is the time to buy. If you're not ready to buy yet, it might be a great time to refinance your existing home loan. Get your self on the right track by getting a free mortgage quote today, then give me a call and we'll get started finding you a great Utah Home for Sale!

November Update - Logan Home Sales Down 18%

Over the last three months (August thru October) Cache County home sales have declined 18% (392 single family homes sold in 2006 vs 320 in '07) compared to the same time period in 2006.

The amount of homes on the market has gradually increased from a low of 411 on July 4th, to a high of 522 on October 26th. This amount may have peaked as the number of homes on the market has hovered around 520 single family residences since that mark. Traditionally winter is a much slower selling season in the Logan Area, so even without much increased inventory this number will likely not start declining until March.

The homes presently on the market have been on the market for an average of 81 days. Traditionally, the average days on market for homes sold in Logan Utah are only on the market for 77 days.

There is also a large disparity between the prices of homes on the market, and the price of the average homes sold. Over the last six months the median price of Logan homes sold is $175,000. Of the active homes on the market, the median listing price is $229,900. These numbers tells us that there is a large surplus of high end homes in Cache County.

It is a great time to buy in the Logan area. There is ample inventory, interest rates are great, and the market looks to be picking up again. If you're looking to sell, make sure you price your house right. There are still plenty of buyers, but you are not their only option.

The Logan Utah Real Estate Market is Slowing... Why?

The Logan Utah Real Estate market is slowing. Not stopping, just slowing. September 2007 market the first time in 7 months that there were less than 100 single family homes sold in Cache County. In 2006 there were 126 homes sold in the month of September vs. 96 this year. A decrease of nearly 25%.

Inventory of availabe homes for sale is also on the rise. As of October 5th there were 503 single family homes on the market in Cache County. In June there were less than 400. At the same time, demand for Logan Utah Houses for Rent is extremely high.

In my opinion the slowing is coming from:

1. Nationwide media and market speculation. The national media constantly brings up the fact that foreclosures are at all time high and that home prices are declining in major markets. This is true, but not the case in Cache Valley. We must realize that real estate is a local thing. Prices are not dropping here, and the rate of foreclosures is far below the national average. Many buyers feel that they can wait a little longer for prices to drop and then can get a better deal. For Cache Valley I recommend buying when you find the right house. Prices will be fairly stable here for the next few months.

2. A trickle effect from struggling national markets. The "crisis" markets do have an effect on our market. Many people wanting to move here from California, Las Vegas, etc. would buy here, but they cannot sell their houses. This especially effects the high end and luxury home markets. I have clients from these markets who have had their homes on the market for over a year. They have dropped the price $50,000 and yet the house still won't sell.

3. The mortgage meltdown and sub-prime crisis. Interest rates are great right now if you have good credit and documented income. You can get a 30 year fixed mortgage for near 6%. But, the window of opportunity has closed for people with questionable credit and very little money to put down. It's a small percentage of home buyers, but it does nevertheless decrease the demand for housing.

Real Estate Markets are a changing.

Logan Real Estate Market Conditions

The Real Estate and Mortgage market is changing. Nationally, there is housing slump, and the recent "Mortgage Meltdown" of subprime loans has caused that slump to worsen. The question is, "What will happen to the Logan Utah real estate market?"

Some Facts:

* Less people are now able to qualify for real estate loans than just a few months ago. During August, I personally had two transactions where "pre-approved" buyers were unable to obtain home loans. A few months ago these deals probably would have closed. It is much harder for people with poor credit and hard to trace income to get mortgage loans. This has had some impact on us locally.
* The housing market traditionally slows down in Cache Valley during the winter months. Over the past three years there has been an average of 96 (26%) more homes sold a year during the third quarter vs. the fourth quarter.
* The number of homes on the market peaked the last week of August to 505 single family homes. This is the greatest amount of inventory in 2007 to date.
* There were less homes sold in Cache County (135) in August of this year than August of 2006 (160). Year to date (through august) there has been more homes sold in 2007 than 2006.

On the positive:

* The economy in Cache Valley is still growing and Cache Valley is a place where people want to live.
* Mortgage interest rates are still very low, and it is possible that they will drop lower before the end of the year.
* Utah Real Estate appreciated at a much slower pace during the nationwide housing boom (nearly dead last from Q3 2001 - Q4 2004), our market had catch up to do and rapid appreciation has come much later (1st exceed the national average during the 4th quarter of 2005), and hasn't been as extreme as it was for many national markets.Our rapid apprecation came when interest rates weren't at the insanely low levels and was driven by a booming economy.
* Cache Valley hasn't really had an extreme appreciation (Our highest appreciation was the 1st quarter of 2007 at 10.2%.) and so there shouldn't be needed correction. Our average home prices are now significantly lower ($198,511) than Salt Lake (296,018) and Utah (292,254) counties. Our average housing cost is much less than the state average, and many will move here just because it's less expensive.

Conclusion:

Times and markets are changing in the Real Estate World. There are natural corrections that need to happen in the real estate world to make up for the accelerated growth and appreciation. Much of the country will correct for a time. Salt Lake and Utah counties may even see some correction. As for Logan Real Estate, we have not had the extremes and will likely not feel major corrections. The recent mortgage industry changes will effect short term home sales. For the next few months I don't think we'll see much appreciation in Cache Valley, but home prices are not going fall. By spring, real estate prices in Cache Valley will likely pick up, and at paces exceeding national averages.

The Springs Subsidized Housing, is it really good for the community?

I have been amazed at a new community in Logan known as "The Springs." Almost overnight, there were hundreds of cute little houses popping up on the South West part of Logan. At first I thought that it was a new retirement community. They were single story stucco houses with well maintained yards and obviously part of a PUD. Turns out, the are actually subsidized housing. People can rent these places for like $200 a month based on their income.

I don't know who funds this project or where the money comes from, but to me it seems like a a misuse of taxpayers money. Yes it's nice that people who may not have the means can find affordable housing, but a brand new, 3 bedroom 2 bath house with a 2 car garage, a community clubhouse, and a yard that is taken care of for them? The economic lesson I get from this type of housing project is that by minimizing your income you can obtain a nicer residence for less cost. It seems to me that it encourages mediocrity. Market value of these houses would be about $160,000 + a HOA fee of $100 a month. Market value of normal Logan Rentals is lower than anywhere else I've ever lived.

There are other government subsidized housing units in town like Hanbury Manor and the Aspen Court off 1800 North. The difference is that these communities are APARTMENTS. The cost per unit is less than half of what it costs to build a single family house like this. From what I hear, Hanbury Manor actually has vacancies. That's something that hasn't happened in years.

Anyways, I would like some input on this and if anybody knows the real details of The Springs Community I would love to hear the facts.

Logan Real Estate - What is the market future?

Over the past year Real Estate in Cache Valley has reached all time high sales and double digit appreciation. The economy has been healthy, and unemployment is among the lowest in the state. Homes for sale in the lower price ranges have experienced sellers market this spring. If a home is clean, priced right, it sells in a matter of days. The question is, how long will this robust real estate growth continue?

Here are a couple factors to consider:

The average price of homes on the market is currently approximately $223,000! Last year the average price of a home sold was close to $177,000. 65% of Single family homes on the market are priced above $200,000.

There is more available homes for sale on the market now than there has been in months. There is more inventory, but not a lot more to make that much of a difference. Traditionally, July and August are the biggest home selling months in Cache Valley, so inventory amounts should remain pretty stable and we shouldn't expect much of a shift in the market conditions.

Interest rates are substantially up. Conventianal 30 year fixed mortgages are nearing 7%. Mortgage rates have increased for six straight weeks. These rates are still historically low. They will deter some potential buyers, but as a whole will not create a major impact.

My prediction is that homes will continue to appreciate at a healthy 5-10% for the next few months. We probably won't see anymore double digit appreciation, and we also won't see a market meltdown or depreciation. There is an ample supply of expensive homes, but less than desired affordable housing.

I also think that rental rates will increase substantially in the next little while... The average Cache Valley resident will not be able to buy, and when it comes to out of pocket monthly cash, renting will be cheaper. What do you think will happen in our market?

Real Estate Logan Utah
Alan Barker - Logan Realtor
Utah Homes for Sale