Friday, June 15, 2007

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