Before I give you my professional opinion about what will happen to real estate in Utah in 2008, let me tell you that Real Estate is very local and everything you will read below may not apply to you at all.
In my opinion, you are going to see slower seller's market (sell of properties), I expect the activity may pick up once people know the full extent of the mortgage crisis which is expected to peak in 2008. However, mention such a scary word as crisis, let me tell you that financing still exist, you just need to be more patient looking for the right company to work with. I will touch base about some of those programs tomorrow.
Hearing all those national news, I would not be surprised if home prices in Utah will continue to go up. It will not be as fast as 2 years ago, but between 7-10%. Lower-end properties between 175-300K range should increase approximately 7-10%, homes in 300-500K range-about 5%, and properties above 500K may experience some problems and would need to lower the price 10-15% in order to sell.
Overall this state should not experience problems to the same extent as other states. You, certainly, can ask me why and I will tell you:
1. We have tremendous population grown in 2006-2007 year, about 3.2%, in comparison with the rest of the country-0.9%
2. Great Job Growth-about 4.3% in October 2006-2007. U.S. Employment growth for the rest of the country was only 1.2%
3. Unemployment for the same period is 2.8%. U.S. Uemployment growth for the rest of the country was 2.8%
4. Foreclosures in 3rd quarter 2007 in Utah: 3.92%. Same time period in U.S.-5.59%
5. Even though home sale number has dropped about 4%: 2006 3rd Quarter Sales in 2006 24.62%, and same period in 2007-20.39%, average home price went up from 2006 (about 13%). Average Home Price in 3rd Quarter of 2007 (Average in this State): $288,307
6. According to estimates from the state, 2007 had record annual growth of nearly 85,000 people, which translates into 25,000-30,000 new households.
My conclusion is local economy is strong enough, and only good things may happen to real estate in this state.
Houses over $500K may be slightly a different story. Prices were pushed up during the last 2-3 years through a combination of lower-than-expected interest rates, a robust local economy with strong job and population growth, investor activity, and agressive financing. Even though most of these factors are still in place, investor demand decreased substantially (especially from out of state), and based on current mortgage standarts, most people cannot afford these places over $500K.
I will touch base of still available mortgage programs to show you that market is good, and it is a great time to sell or buy.
Thanks,
Marina Vialtsina
(Your Local Real Estate Consultant)
801-649-5883
801-649-5883
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Marina Vialtsina
Showing posts with label opinion. Show all posts
Showing posts with label opinion. Show all posts
Thursday, January 10, 2008
Thursday, November 1, 2007
Quarter Rate Cut
Today's FOMC adjournment brought us the expected quarter point rate cut that was expected by many, but the post-meeting statement created concern about inflation. The Fed referenced the weak housing market as a contributing factor to the change in short-term interest rates, but also indicated that inflation remains an issue, particularly with the high energy and oil prices we are currently seeing.The move and comments leads many to believe that the Fed will not make another rate cut in the near future.
The stock markets have surprisingly reacted well to the news with the Dow up 131 points and the Nasdaq gaining 35 points. However, the bond market and mortgage rates have not faired so well. The bond market is currently down 23/32, which will likely revise this afternoon's mortgage rates higher by approximately .25 of a discount point from this morning's rates.
This morning's release of the 3rd Quarter Gross Domestic Product (GDP) revealed a 3.9% annual pace of economic growth, exceeding forecasts of a 3.1% rate. This means that economic activity was moderately stronger than expected. However, offsetting that was good news in the key inflation reading within the report. It showed a significantly lower reading than was expected, indicating inflationary pressures were well under control.
Also posted this morning was the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. It showed a 0.8% that was slightly lower than forecasts. This can also be taken as good news for bonds and mortgage pricing because it eases wage inflation concerns.
Now that the Fed meeting is behind us, we have to turn our attention to the remaining economic news of the week. There are a couple of high-impact reports still left to be posted that may significantly affect the markets and mortgage rates. September's Personal Income and Outlays report will be posted early tomorrow morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see increases of 0.4% in income and 0.4% in outlays.
The Institute for Supply Management (ISM) will release their Manufacturing Index for October late Thursday morning. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline from September's 52.0 reading. If we get a reading below 51.5, we should see mortgage rates drop tomorrow morning. On the other hand, a reading above 51.5, indicating manufacturing activity may be stronger than thought, could fuel a stock rally and drive mortgage rates higher.
If I were considering financing/refinancing a home, I would....Float if my closing were taking place within 7 days...Float if my closing were taking place between 8 and 20 days...Float if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
The stock markets have surprisingly reacted well to the news with the Dow up 131 points and the Nasdaq gaining 35 points. However, the bond market and mortgage rates have not faired so well. The bond market is currently down 23/32, which will likely revise this afternoon's mortgage rates higher by approximately .25 of a discount point from this morning's rates.
This morning's release of the 3rd Quarter Gross Domestic Product (GDP) revealed a 3.9% annual pace of economic growth, exceeding forecasts of a 3.1% rate. This means that economic activity was moderately stronger than expected. However, offsetting that was good news in the key inflation reading within the report. It showed a significantly lower reading than was expected, indicating inflationary pressures were well under control.
Also posted this morning was the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. It showed a 0.8% that was slightly lower than forecasts. This can also be taken as good news for bonds and mortgage pricing because it eases wage inflation concerns.
Now that the Fed meeting is behind us, we have to turn our attention to the remaining economic news of the week. There are a couple of high-impact reports still left to be posted that may significantly affect the markets and mortgage rates. September's Personal Income and Outlays report will be posted early tomorrow morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see increases of 0.4% in income and 0.4% in outlays.
The Institute for Supply Management (ISM) will release their Manufacturing Index for October late Thursday morning. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline from September's 52.0 reading. If we get a reading below 51.5, we should see mortgage rates drop tomorrow morning. On the other hand, a reading above 51.5, indicating manufacturing activity may be stronger than thought, could fuel a stock rally and drive mortgage rates higher.
If I were considering financing/refinancing a home, I would....Float if my closing were taking place within 7 days...Float if my closing were taking place between 8 and 20 days...Float if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
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