Market Trends and Condition

SALT LAKE CITY — Want to buy a house or sell yours? Now is the time to strike!
Real Estate Researcher Zillow predicts Salt Lake City will be the hottest housing market nationwide in 2014, and the market has certainly come a long way since the 2008 recession.

“There’s no comparison,” said Candice Evans, who is a Hard Rock Homes real estate agent.
The Salt Lake Board of Realtors reports 15,000 homes were sold in Salt Lake County in 2013, which are the best results in the last seven years.
“Nine months ago we were booming,” Evans said. “In August, Hard Rock Homes had just 29 homes under construction in just that one month, and we’re just a small local builder.”

An article this week over at Norada.com by David Campbell speaks to his methodology for predicting real estate prices. His concept of course takes the supply/demand influence into account, but he throws in something else … “capacity to pay.”
Demand Factors
Population growth fuels demand for housing. Job growth fuels population growth. This is true for the vast majority of normal market areas. However, in vacation and resort markets there is outside money in play. The money to buy in these markets comes from other areas. When job growth is stagnant in most areas, you can still see housing price increases in markets that enjoy outside money influence.
Supply Factors

When developers broke ground this month on Tampa's newest apartment skyscraper, they defined their goal as a portrait of homey domestic splendor: neighbors "sharing dinner on a Friday evening, looking west over toward the ... sunset."

But to get there, SkyHouse Channelside's developers had to look in the other direction, toward the Far East. Up to $15 million of the tower's $68 million price tag will come from the American arm of Tokyo-based Kajima Corp., one of Japan's most powerful construction conglomerates.

"The more (developers have) constructed, the more comfortable the Japanese have felt — and the more they have invested," said Steve Gardner, the Tampa real estate attorney with Gardner Brewer Martinez-Monfort who helped seal the financing deal.

RELATED NEWS/ARCHIVE

As I noted in a prior post, activity in the consumer goods sector is often an indicator of health in the housing market. Major home supply retailers often see a jump in sales during or even before a rise in buyer activity. Scenarios like this can have spillover effects as well, with the increase in retail purchases and overall consumer confidence leading to profit surpluses and even job growth.

According to neighborhood scout, the highest appreciating neighborhoods (cities of 25,000 or more) in the USA for the last reporting quarter--4th quarter 2013 is as follows:

rank city
100 Ridgecrest, CA
99 Scottsdale, AZ
98 Titusville, FL
97 Calexico, CA
96 Melbourne, FL
95 Manteca, CA
94 Lake Havasu City, AZ
93 San Gabriel, CA
92 Menifee, CA
91 Victorville, CA
90 Wildomar, CA
89 Lake Elsinore, CA
88 Manhattan Beach, CA
87 South Pasadena, CA
86 Temple City, CA
85 Salinas, CA
84 San Jacinto, CA
83 Kahului, HI
82 West Sacramento, CA
81 North Las Vegas, NV
80 DeLand, FL
79 Hesperia, CA
78 Desert Hot Springs, CA
77 Napa, CA
76 Moreno Valley, CA
75 Merritt Island, FL
74 Perris, CA
73 Cathedral City, CA
72 El Centro, CA

Two articles this week, one at NuWire.com and the other at MortgageNewsDaily.com are talking about rising home prices and fewer homeowners in negative equity (underwater) situations. Over at NuWire, the negative equity rate is said to have dropped under 20% for the first time in years.
The rate of homeowners underwater in their mortgages fell last month to 19.4%. 9.8 million homeowners still remain underwater in their mortgages. However, negative equity has fallen for seven consecutive quarters. Approximately 3.9 million homes exited negative equity situations during this period.

In December, almost 40 percent of the home sales were all cash. Redfin estimates that, on average, 60 percent to 80 percent of San Francisco homes are selling for prices over the original asking price. Most are gobbled up within 16 days of being listed, down from 61 days five years ago, when the nation’s real estate market was still soft.

But here’s the problem: As more people move in, the city will also need more public-school teachers, police officers and firefighters. Living in San Francisco on a city salary is difficult if not impossible.

We have a unique market situation and an outstanding market opportunity. But this window of opportunity is likely limited, for those of who who like to time the market, well the time is now. In all price ranges.

1. We have an increased in new listings. We have an increase in total listings.New contracts are slightly up. Prices are stable, have been since July 2013 after major increases. Sales are down. Average days on the market has been going up for the last 6 months. and the discount rat has increased for the last 8 months.

This translates like this - a BUYER'S MARKET, more inventory, more choices, stable pricing, offer greater than demand, greater discount rate.

AND

As tax time approaches, a HousingWire analysis of metro areas' tax burdens revealed that home owners in housing markets with the lowest overall tax burdens paid a percentage of their income seven times less than the burden in some of the heaviest tax burden states.

For the study, HousingWire evaluated 2012 data by the District of Columbia’s Office of Revenue Analysis, including estimated property taxes, sales taxes, and state income taxes on major cities in all 50 states. The tax estimates were evaluated for a hypothetical family of three and for the average tax rate at household incomes of $25,000, $50,000, $75,000, $100,000 and $150,000.

Warren Buffett is arguably the best investor in the history of the universe. There have been books written on his story. However, when we think of Warren as an investor we think of the stock market. But did you know that he credits real estate for getting his start in investing? Here is an article with him explaining this early real estate experience.

Buffett: Real Estate Taught Me How to Invest
Daily Real Estate News | Tuesday, February 25, 2014

In his annual letter to shareholders, billionaire and Berkshire Hathaway CEO Warren Buffett talks about how two small non-stock investments in real estate from years ago were keys to teaching him about investing.