October Home Sales Down 55%

During the third quarter, home sales in Cache County were down by more than 37%. That was in large part due to the expiration of the home buyer tax credits. Personally, I thought that during the fourth quarter we would start seeing some more normal home sale numbers. Well, it looks like from October's home sales numbers I was wrong. Cache County home sales were down by more 54.55% last month compared with October of 2009. Reported thus far, just 45 residential homes have been reported as sold. This is the lowest month of home sales since January.

While 45, home sales is a low number for October, the 55% decline is a little misleading. The initial home buyer tax credit ended in November of last year, so there were very high home sales numbers during October of last year. From 2000 - 2004, October averaged 69 home sales each month. From 2005-2009, an average of 97 Cache County Homes sold each month.

Due to the season, not due to lots of home selling, the amount of Logan Utah Real Estate is declining. We currently have 844 residential homes for sale in Cache County. This is down 3.1% from a month a go, but up 11.7% from this time last year. At Octobers home sales pace, Cache County Real Estate has 18.75 months of active inventory.

Logan real estate values also continue to decline. Homes just keep getting less expensive. The median list price of Cache Valley Homes is now down to $184,900, while the average list is down to $226,390. This is still quite high considering that the median price of homes sold during October was just $160,000.

One slightly positive aspect of this months real estate numbers is that the number of under contract homes is actually up from last month. 101 residential homes are under contract compared with 99 a month ago. This should mean that November home sales will be better than October.

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.