We wanted to inform you of what could be a significant incoming change in our Iron County Real Estate market.
For some years now, we have been enjoying a seller's market, whereby prices have continually risen and there is high demand for homes.
Although prices are continuing to climb in the area (they rose by an average of 9.5% last year), we are simultaneously beginning to track a down turn in the number of home sales.
Iron County sales in December 2018 were down by 9.7% in comparison with the same period in 2017.
The drop was more dramatic in our neighboring Washington County, where there were 18.3% fewer sales in the same timescale.
Across Utah, and more closely reflecting the situation in Iron County, there was a 10.7% fall.
What these figures possibly suggest, along with other factors, is that we could be transitioning to a buyer's market in Utah.
There's no question that buyers have been under pressure in recent months. Mortgage rates, although currently lower than they have been, are broadly on an upward scale and prices have been rising at a rate that limits what many buyers are able to afford.
So, to some extent, what we are seeing is probably more in the realms of an arguably long overdue market correction.
It's important to point out that the market isn't in any obvious danger of collapsing, however it is looking increasingly likely that the dynamics that control it are going to change.
A market correction like this is far from being totally bad news. Yes, sellers may have to be more realistic about their asking price, but as this occurs we may see more buyers starting to look for homes, if they begin to be more affordable in relation to income.
And there could be mixed messages as we go through 2019. January figures will be interesting as we saw mortgage rates falling and stabilizing, bringing buyers out in numbers very early in the year. This upswing may be counterbalanced to a degree by the recent Government shutdown that delayed the processing of Federal home loans.
Mortgage rates are still expected to rise in the coming months, but as we've seen so many times before this can be very difficult to predict. The recent risk aversion in the stock market actually contributed to the fall in mortgage rates, so the situation is always volatile and impossible to accurately forecast.
The key message is that sellers need to be aware of the changes and factor these in to the decision as to when to list and what price to ask for the property. Right now things are still very favorable, and our market continues to benefit from a strong influx from California, which may continue to help buck the trends we've been noticing recently.
Why not contact us today and we can informally chat with you to explore what the best options are in your own situation.