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Show Page 18 The Ogden Valley news Volume XV Issue XIV July 1, 2008 Ogden Valley Real Estate Roller-Coaster By Layne Sheridan, Ph.D., ABR, GRI it is hard to read a newspaper or watch a news program on television without being bombarded with stories about the slowing u.s. economy – led by a sharp real estate decline. Many of the current real estate problems stem from the oncewidespread view that real estate prices only go up. unfortunately, the past two years have shattered the expectation of continually increasing real estate values. Between January 2007 and January 2008, existing home sales in the u.s. declines 17.5 percent and home prices dropped 8 percent. But national averages don’t tell the whole story. ultimately, the real estate “market” is a collection of local markets which may vary wildly. For example, between the first half of 2007 and the first half of 2008, home sales in san diego fell 22.9 percent. in contrast, the same period saw salt lake City home sales increase 3.5 percent. the Office of Federal Housing Enterprise Oversight ranked utah number 2 in the u.s. for home price appreciation during the first quarter of 2008. However the picture is not completely rosy. the number of home sales in northern utah declined by one third in the first quarter of 2008 compared with the same period in 2007. Even so, utah’s prospects look much better than many areas of the country. Job growth has been impressive, partly because national migration patterns show far more people moving into the region than moving out. indeed, by almost any measure, utah has been immune to many of the economic problems affecting most of the country. How are we doing in the Ogden valley? the valley is a great example of how real estate markets are local. Clearly the frenzied seller’s market of 2005 is over. sales are down precipitously since 2005 when the sales pace was unusually torrid. results are still dismal. to make matters worse, the number of new listings is growing rapidly. the result is a dramatic increase in inventory and the length of time it takes homes to sell. as of mid-June, there were 187 single family homes for sale in the valley—and there would be more except that many sellers have taken their homes off the market. in contrast, the 2005 inventory of homes for sale tended to fluctuate between 40 and 60 homes, with a low of just 26 homes available. if sales were to continue at today’s pace (unlikely) and no new homes came on the market (virtually impossible) the current supply would last for 42 months. if sales are dropping this much, are prices following them down? no. in fact, except for the last half of 2007, the price has been trending steadily upwards. there are not many sales, but those that do happen reflect increasing prices. although this seems counter-intuitive, it is a common phenomenon in resort areas. there are fewer buyers, but they seem to be willing to pay for what they like. Are the price increases a result of larger homes being purchased? Partly. Homes being built in the last few years tend to be larger and more elegant than those built in previous years. But size is not the only factor. there is a dramatic increase in price per square foot. Clearly, a square foot of living space in the valley is selling for far more today than it was several years ago. this appears to occur more in the newer, fancier houses that would be considered “resort” property. some older, traditional homes have actually declined in value. another factor is the construction boom we have experienced for the past few years. there are more relatively new homes available and buyers seem to prefer these newer homes. the average age of homes sold in 2008 is 13.8 years, compared with an average age of 20.7 years for 2007 sales. Why have our sales slowed more than those in the rest of Utah? Our market is quite different from that in the rest of the state. Ogden valley is becoming a resort area and, as such, appeals to buyers from throughout the country. as we have seen, real estate markets in many other areas are declining. Potential out-of-state buyers who have seen their primary residence’s value declining are understandably reluctant Snowbasin Summer for Kids wOrking parents -- Provide your child with a TGIF treat to have a change of pace and fun in the mountains, in fact, schedule them every Friday! recreating parents -- Take part in the outdoor activities and ensure your kids are taking part too! Enjoy the Sunday afternoon concerts while your kids are making their own concerts. Creative activities for children to explore and discover nature in a beautiful mountain environment. Enjoy your day in the ourdoors knowing that your child is in a beautiful, caring, state licensed facility offering organized activities along with fun play time. OrganizEd aCtivitiEs inCludE: games – Meadow Tag – Making Music in the Mountains arts and crafts prOjects – Plenaire Water Color painting, Moose Silhouettes science prOjects – Learn to make Snowbasin Play dough and create a masterpiece. stOries, dramatic play – Bugs, Bugs, Bugs, Moose, Deer and Bear Puppetry field games – Grizzly Kid Sport Relay Race OutdOOr play – Snow Bubbles, Grass Hopscotch (Make your own marker), Freestyle Frisbee, Cloud Interpretation scheduled gOndOla ride and hike – 3-6 and under free 7-12 add $10.00 Day care Ages 6 months to 3 Snowbasin Summer for Kids 3-12 Friday, Saturday and Sunday 9:00 a.m. to 4:30 p.m. Full Day 9:00 p.m. - 5:00 p.m. Half Day 9:00-12:30 or 1:00 - 5:00 Rates: $6.00 per hour Full Day includes lunch and snack. $48.00 Half Day Morning Includes lunch PM includes snack $24.00 (scheduled gondola ride and hike add $10.00 to rates) Reminders: All hiking children must be potty trained. No open toed shoes or heels. A water bottle is required. Your child must arrive with sunscreen on and the bottle must be clearly marked with his/her name on it. For reservations or further information please call Becky at 801-620-1111 or 801-710-3031 Daycare is available, reservations required. to invest in a second home here. also, when sales were thriving in the valley, it was common for buyers to use the equity from their primary homes as down payments. today those values often no longer exist or, because of illiquidity, are not accessible. Finally, the mortgage crisis has made loans much more difficult to get and, in the case of jumbo loans, more expensive. in some parts of the country, the limits for conforming loans have increased to reflect the cost of homes. However, the limits are set by county, and the limits for Weber County are unchanged. in this area, loans over $417,000—substantially below the valley average sales price—are considered jumbo. Does the strange price behavior mean that there are no good values in the valley? not at all. While very many homes are priced unrealistically, some are quite competitive. there are still people who have to move for traditional reasons, e.g., job relocation or family issues, and who cannot afford to carry two homes. not only do these people price their homes more reasonably, they are also more willing to negotiate. selective buyers can do quite well. What strategy should a buyer take? take your time. look at all the properties that fit your needs, not just those that a particular real estate agent selects for you. You know your desires better than anyone else. the more you know about everything available on the market, the better able you will be to judge value and thus make more reasonable offers on a home. Before you make an offer, do your homework. ask for information about recent sales of similar homes, including prices and the length of time on the market. When a property that you really like comes on the market at an excellent price (and some do) be ready to take action quickly. While most homes or lots stay on the market for quite some time, the exceptional opportunities go fast. One building lot in Eden went under contract 20 minutes after it was listed in the Multiple listing service. Clearly this is unusual, but circumstances occasionally make it critical for someone to sell quickly. How can you stay on top of what is available? One simple (not to mention free!) way is to log onto my website – www. laynesheridan.com – and click on “Property search.” then just choose the area you are interested in and your price range. Easier still, call me (801-3882196) or email me (layne@laynesheridan. com) with your criteria and i will set up an automatic email whenever a home matching your criteria comes on the market. How about sellers? if you don’t have to sell now, you might want to wait. But if you do need to sell: • Price the house right or be prepared to wait. in today’s market, the right price is something below the price for similar properties. • stage the house. this means taking inexpensive actions that make the house more appealing to potential buyers. such actions might include reducing clutter, painting some rooms or trimming hedges. little things can go a long way to helping prospective buyers imagine themselves living in your home. a good real estate agent should be able to suggest changes that would make the home more salable. • Marketing is key in any market, but it is especially important when sales are slow. ask for a written marketing plan from your agent. this plan is their commitment to helping you sell your home. it also helps you to hold them accountable for actively marketing your home. look for an extensive internet presence. this is especially important here because so many of our buyers come from outof-state. For them, the internet is the most efficient medium for searching for real estate. the more sites that list your home, the greater your exposure to prospective buyers. For example, i advertise my listings on more than 150 different web sites and portals. How does the future look? real estate, like the rest of the economy, is cyclical. there will be downturns and boom times. Ogden valley is the last largely undeveloped recreational valley in the country. We have a limited amount of land, zoning that limits the amounts of development and an amazing variety of opportunities for fourseason recreation. the turn-around will certainly come – although the crystal ball is cloudy about the timetable. Note: Layne Sheridan is a REALTOR® with Prudential Utah Real Estate in Huntsville. She has a Ph.D. in marketing and has earned the Accredited Buyer Representative and Graduate Realtor Institute designations. She can be reached at 801-388-2196 or <layne@laynesheridan.com> Ogden Valley Residential Real Estate data from the Wasatch Front Regional Multiple Listing Service. |
