The Jared Zimmer REMAX Properties Blog

 

Sept. 15, 2022

Shift... a quick glance into the past, present & speculative future

Shift... a quick glance into the past, present & speculative future

This gorgeous Cedar City property sold in October 2017 for $620,000. It's a stunning 7800 sqft, 7 bedroom, 6.5 baths, 4+ car garage mansion, loaded with every possible feature. It was listed a few months back @ $1.5M and recently expired.

Something to consider: How would such a fabulous dream home sell for so relatively little just five years ago? At that time there was low demand and high inventory. Fast forward to the summer of 2020 and we experienced completely opposite market conditions (low inventory and abnormally high demand) to the point that, by early this year, values had skyrocketed, on average, almost 40%!!! Annual appreciation is 3 to 6% in a normal/healthy market...

Why did I use that comparison? It's a reminder of what local buyers can afford when out-of-state buyers are absent. The correction we are experiencing will bring values back to what's more realistic for the market in which we live.

Since early 2022 we've witnessed a rapid change in market conditions and demand has started to slow down. The correction in property values has been almost as dramatic as it went up. The fear fueled covid-inspired migration from bigger cites and out-of-state buyers has subsided. In fact, nationally, sales spiked so much from mid-2020 to early 2022, it’s likely we will see a lag in the number of sales nationally over the course of the next 18 to 24 months.

Of course it is only natural that many current home owners have seen this exponential growth and want to take maximize the equity they pull from their investments. 2021 brought prices we've never seen before in this area and most likely will not see again for years to come. Unfortunately, as the market continues to slide, many of today's home owners are clinging to yesterday's prices and simply holding on to unrealistic expectations.

Locally, it will be interesting to see how the 30+ subdivisions currently turning dirt, finishing roads, and/or putting new inventory up for sale, will contribute to real estate values. With diminishing demand, more and more inventory sitting, developers will most likely start trimming prices.

So what can you do if you still want to cash out?

The market correction we are seeing is still transitioning and, at this point, nobody knows how far it will fall before it levels out. But the situation today is still better than it's going to get and there are no guarantees that we will see a recovery to pricing as we experienced the past couple of years. So, as values continue to drop... once the market levels out... how many years will it take to get back to TODAY'S VALUES?

Maximizing as much equity as possible on the sale of your home requires a willingness to price and market aggressively.

To achieve this goal, it will be essential to team up with the right agent. Did you know, for example, that 60% of today's agents nationwide haven't even sold a single home in 2022! Even during the boom time of last year, over 70% of agents sold less than three properties.

As should be clear from the rather frank presentation of this newsletter, we are being completely realistic about where the market is going and advising our clients accordingly. Our marketing strategy continues to produce excellent results for our sellers and we have been blessed to help many great clients throughout the year with their real estate goals.

If you’re interested in capitalizing on this market and maximizing the equity from your property, don’t hesitate to reach out. This can't be stressed enough, sooner is better. Feel free to call me on my personal cell at 435.327.2090.

Have a great day,

Jared

Sept. 1, 2022

What's Happening in Our Real Estate Market as We Head into Fall?

What's Happening in Our Real Estate Market as We Head into Fall?What's Happening in Our Real Estate Market as We Head into Fall?

What's Happening in Our Real Estate Market as We Head into Fall?

Numbers don't lie. As the above graphs show, inventory of available homes for sale is building in Iron County and prices are correcting.

While many would-be sellers are "holding out", the reality is that the tidal wave of home sales crested earlier this year and that tide is now heading out!

It's interesting that prices are correcting as fast as they rose. On average, property values have dropped between 8 and 12% this year. Based on current economic factors, it's a safe bet that values will continue to correct by a further 10% over the next six months, or by the Spring of 2023.

So what are the main factors affecting this change?

Essentially we are moving back to a "normal" market. We're no longer seeing the panic buying wave, caused by covid, that led to very low inventory here.

But what is a "normal" market?

The reality is that nothing today can really be called "normal".

Nationally, annual closings jumped by almost 20% in 2021, compared with 2019. So those people who were planning to buy in the next couple of years went ahead and bought. This is likely to contribute to a lag in overall sales throughout the country for the next few years!

We should also remember that we are in a deep economic crisis in the US with no sign of relief. Until things stabilize again, the big unknown factor is how long it might take to fully return to a truly "normalized" market.

So what can you do about it today?

Price and condition are the main driving factors in getting a home sold in today's market. As our graphs show, the market is on a downward trend, so a realistic attitude to what your home is actually worth at the moment is essential. Presentation of the property is also now far more critical, as buyers have the luxury of choice once again.

Nonetheless, we are continuing to sell homes in good numbers. Our clients recognize that the relentless efforts we make to sell any property, even in the boom times, are an absolutely essential ingredient for success right now.

Yes, things are now tougher than they were just a few months ago, but we have your back and will be there with you every step of the way to make sure that nothing is overlooked and every opportunity is immediately seized upon.

Why not contact us on 435-327-2090 to discuss your own situation in more detail. We'd love to help.

Aug. 9, 2022

Current Trends in the Southern Utah Real Estate Market

  Current Trends in the Southern Utah Real Estate Market

The above graph, courtesy of Southern Utah Title Company, shows the home sales performance of the Southern Utah real estate market so far in 2022, compared with the whole of 2021.

As can easily be seen, the number of homes sold a month has lagged behind the 2021 totals for the entire year to date.

We can also see a relatively steep decline in July, doubtless the cumulative effect on buyer sentiment of rising mortgage rates and other financial pressures, such as inflation.

It should, of course, be remembered that last year was absolutely exceptional and much of what we are currently seeing is a return to a more normalized market.

We have recently seen some stabilizing of mortgage rates, and that could lead to a leveling out of home sales, as opposed to the quite steady drop we've been tracking in recent months.

A better jobs market and lower gas prices are also good signs. The National Association of REALTORS® reported at the end of last week that it expects home sales to soon stabilize and that we are likely to start seeing steady gains again, as we head into 2023.

So, as we move towards summer's end, there are some reasons to be upbeat. However this does require a sensible approach to pricing your house to what the current market will bear and also paying attention to those presentation details that mattered much less during the buying frenzy of the past couple of years.

We are still selling very healthy numbers of homes right across all sectors, so why not contact us today at 435-327-2090 and discuss your best options.

July 29, 2022

Homes Will Still Sell - With The Right Agent!

Homes Will Still Sell - With The Right Agent!

The three top-of-the-market homes above have all been sold by us very recently, among several others.

Even though this is a tougher market than we've been used to for a very long time, homes are still selling.

But it's essential to team up with the right agent!

So how are we succeeding where others might fail?

We ensure that the home is priced right within the current market conditions. This is a more precise science than it has been for some time. It's easy to under price a home. We avoid that by studying the market literally day-by-day and use our deep experience to arrive at a price that will still attract buyers but achieves the maximum possible return for you.

We talk straight with you about the market and what you need to do. This is not a time to hide your head in the sand about a more challenging market. Doing so will likely mean that your home remains unsold, putting your future plans on hold. Clients have ultimately thanked us for being so frank with them, as it has been the difference between success and a lot of disappointment.

Presentation of your home is simply far more important than it has been in recent times, where homes would often sell regardless of condition. We offer practical suggestions that help you to make the property as attractive to as many buyers as possible.  

But perhaps above all, we simply work harder for you, in terms of aggressively marketing your property and making important daily connections with people who can influence the sale. 

Why not talk to us today at 435-327-2090.

July 18, 2022

Today’s Real Estate Market: “Price War & A Beauty Contest” - Mike Ferry

Today’s Real Estate Market: “Price War & A Beauty Contest” - Mike Ferry

We are now beginning to see some of the nationally publicized negative effects of the current real estate market in our area.

As our above graphic shows, absorption rate for June shows a dramatic increase, compared with June 2021, in terms of the amount of home supply in the market.

We can also see that homes sold last month were 7.4% down on the same month last year.

Conversely, median sale price in Iron County rose by over 39% year-on-year. But that is mostly attributable to the cumulative effect of continuing price growth in 2021.

We are now increasingly seeing what industry expert Mike Ferry recently referred to as "a price war and a beauty contest".

Pricing and condition mattered a lot less throughout 2021. Now both are absolutely critical.

The rewards are still out there, but it's no longer adequate to just list a home and wait for the offers to almost immediately flood in, as was commonly happening a few months ago.

With such an expansion in the number of available homes for sale, buyers simply have more choice now and sellers have a lot more competition in every market sector. Increasing mortgage rates also mean that most buyers are now having to strike the very best deal they can find.

Now, more than ever, it is vital that you engage with an experienced and seasoned agent who can guide you through what's quickly becoming a more involved and demanding selling process, ensuring that you price optimally to attract buyers and achieve the best possible return, as well as giving all-important advice on the correct presentation of your home in today's more exacting market conditions.

Why not call us today at 435-327-2090 and find out how we continue to produce fabulous results for our clients.  

June 29, 2022

Succeeding in a Changing Real Estate Market - Price and Condition are Key!

Succeeding in a Changing Real Estate Market - Price and Condition are Key!

Succeeding in a Changing Real Estate Market - Price and Condition are Key!

Succeeding in a Changing Real Estate Market - Price and Condition are Key!

The current pressures on the real estate market are all over the news.

Rising inflation and mortgage rates are rapidly changing what buyers can actually afford and today's home seller has to face some new realities.

The astonishing price growth that sellers were enjoying not so long ago has gone.

Our Iron County real estate market jumped up by approximately 40% in two years. Absolutely astounding growth that simply could not sustain.

It all sounds like bad news, and yet it isn't. We aren't seeing a collapse in the market. Instead it's a much needed, inevitable and arguably overdue correction to more normal conditions.

Unfortunately many sellers are having to be very realistic about the value of their property.

While price wasn't much of an issue for buyers in the past couple of years or so... it is now!

Even home condition wasn't critical... it is now!

As one top real estate figure recently put it: "It's a price war and a beauty pageant."

Succeeding in this changing market often requires a different mindset, even compared with a few months ago. 

A home that is priced correctly will still sell. But with fewer buyers having more choice due to increasing inventory, there is simply more competition.

Prices are often dropping as the market finds its new level and the situation will get worse before it begins to improve. But that doesn't mean that most sellers won't achieve great returns in selling right now. Remember also that if you intend to buy another home, that is likely to become cheaper too!

Why not contact us today at 435-327-2090 for an informal discussion of how to take advantage of the great opportunities that still exist this summer.

June 15, 2022

Picking a Winning Strategy in a Real Estate Market That's Full of Contradictions

Picking a Winning Strategy in a Real Estate Market That's Full of Contradictions

Following real estate news developments nationally can be a disconcerting experience for many right now.

Just this week, we've seen mortgage rates break the 6% barrier for a 30-year home loan, and continuing to rise from there! Home buyers are also having to cope with price inflation and, very likely, a further rise in general interest rates for other borrowing too.

It would be absolutely wrong to try and pretend that this is not going to have implications for our homes market here in Iron County, and in some respects it already has.

However, if we look at the above stats for May, it's undeniable that our market is still outperforming the same period last year, when mortgage rates were about half of what they currently are...

So what's going on here?

Buyers are still arriving in our area from other states in high numbers, many using their equity gained in even more lucrative markets and not needing a mortgage.

But it's probably also fair to say that we are still seeing this positive effect most clearly in the mainstream market for homes here. Higher value properties are not selling so easily and that's partially reflected in the graph below:

Picking a Winning Strategy in a Real Estate Market That's Full of Contradictions

Inventory of available homes for sale in May was 65% higher than the same month in 2021. But we are still talking about just over two months of supply in the market, which is arguably still not adequate to accommodate current buyer demand.

The key takeaway right now is that things are very, very likely to worsen before they improve. By listing in these peak summer months, you'll be giving yourself the best opportunity to sell and for the highest possible return.

The great news is that, here in Iron County, we have to some extent been sheltered from the worst of the current real estate negatives. But these influences are likely to have a growing impact here and it would be a huge mistake to think otherwise.

As ever, please don't hesitate to contact us to discuss the current market in the context of your own situation on 435-327-2090.

May 31, 2022

Tracking Key Trends to Understand What's Influencing Our Real Estate Market

Today we'd like to show you a couple of graphs that help to illustrate what's happening in real estate at the moment.

Above you can see how inventory of available homes for sale in Utah has risen in 2022, compared with the notably lower figures for year-to-date in 2021.

It's important to say that inventory has been way too low for a long time, so this isn't necessarily a negative aspect, in that more supply will unquestionably be welcomed by many buyers, some of which will have been demotivated and discouraged by poor levels of supply in recent months and, indeed, years.

Nonetheless, it's also an indication that the market is becoming more competitive, with more sellers chasing buyers.

And to understand what buyers are facing right now, let's look at the graph below...

What we can see here is the effect on purchasing power as mortgage rates steadily rose between January and April of this year. The implications are clear, in that what was affordable for some buyers at the start of 2022 may be out of reach as we move into June.

Not everyone needs a mortgage, of course, and we have plenty of buyers arriving in Iron County having cashed out of other states. But it does again point to the key trends we are seeing in terms of more pressure on buyers and a less easy time for sellers.

This situation will almost certainly worsen before it improves, and yet we are still seeing very healthy sales levels in our local market, so the message is clear that if you're planning to list then it might not be the best idea to wait and to act now.

Please don't hesitate to contact us at 435-327-2090 for an informal discussion about current market conditions and how to best take advantage of them in your own situation.

May 17, 2022

Where Is The Market Headed?

Where Is The Market Headed?

 

You are probably already aware that mortgage rates have been ascending for most of this year and are now above 5%, on average, for a 30-year loan.

This is a situation we have been tracking in our email communications with you for some time and now we are seeing the results of these rising rates.

The graphs above show the relationship between interest rates over the past year and the number of mortgage loan applications nationally.

We can easily see the direct effect of rates in terms of the declining rate of applications, seen most dramatically here in the lower amount of refinancing in the market.

It’s safe to say the wave we experienced the last 18 months has crested.

Moving forward the biggest question will be: Does the wave come crashing down…? Or, will it gradually roll out into a more normalized market? 

Many forecast a market correction upwards of 20% by this time next year. We have definitely started seeing activity slow down in properties over $800K. It’ll be interesting to see how it plays out over the next few months.

The first thing to say is that our market isn't typical of the bulk of the USA. Significantly, it's a sought-after location for folks migrating out of states like California, many of whom are cashing out and paying for an Iron County home with no need for a mortgage.

And even if prices were to correct here by as much as 20%, we've seen values in this area jump by nearly 40% since early 2020 so, however you look at it, we are likely to remain in a very positive situation.

Right now, as the graph below demonstrates. median sales price for Iron County continues to increase, month-on-month, to the highest level ever seen, further reinforcing that our market is likely to remain very resilient.

Nonetheless, it would be a mistake to think that the overall dynamics of the market aren't changing to some degree, as indicated in the above graph which compares home prices with median incomes. Therefore it's arguably a good idea to assess where you are with your own home equity and to list at a time when there is still excellent demand and growth in returns.

A quick, free and convenient way to do this is to check out your home's value using our online home valuation tool - click here to try it.

Alternatively why not give us a call at 435-327-2090 to discuss your own situation in more detail. We'd love to help.

April 21, 2022

Iron County Real Estate Continues To Flourish

Iron County Real Estate Continues To Flourish

Rising mortgage rates haven't changed the fantastic home sales trends we continue to enjoy in the Iron County area.

As the above statistics for March demonstrate, we are still seeing very positive key pointers.

Median sale price was up by over 29% on the same period last year, reflecting the excellent demand that we continue to see from buyers, many of whom are moving into the region from elsewhere.

Median list price showed an improvement of over 22% on March 2022, more or less rising in tandem with selling prices.

And it took just 68 days to sell an Iron County home, on average. This represents a 27.66% drop compared with March last year, which was an incredibly busy period in its own right.

While the upward trend in mortgage rates isn't a welcome one, so far it appears to be having a minimal effect in our area.

Although they have risen significantly, rates are still very competitive, when looked at from an historic perspective. It should also be remembered that not everyone is looking for a home loan and we continue to see a good flow of cash buyers moving into Iron County.

It makes nothing but good sense to list your home while the local market continues to trend so well, so give us a call at 435-327-2090 for an informal chat about your best options.