Candace Rushton :: Real Estate Tips

Leading the pack: Utah is first in nation in house-price appreciation

By Dave Anderton

Deseret Morning News

The hottest housing market in the nation isn't in Arizona, California or Florida but in Utah, where house prices appreciated 17 percent in the first quarter, the highest rate of all states.

It was the second consecutive quarter Utah held the top spot, according to a report Thursday from the U.S. Office of Federal Housing Enterprise Oversight.

In the three months ended March 31, Utah home prices climbed 17 percent when compared to the same quarter in 2006. From last year's fourth quarter to this year's first quarter, Utah homes appreciated 2.77 percent, the report said.

Three Utah metropolitan areas also ranked among the five highest appreciating among 282 U.S. cities. The Provo-Orem area took the No. 2 spot at 19.67 percent. Salt Lake City came in third at 19.12 percent, and the Ogden-Clearfield region was fifth, with homes appreciating at 15.7 percent.

The No. 1 slot went to Wenatchee, Wash., at 25.6 percent.

Nationally, homes appreciated 4.25 percent during the first quarter compared to the first quarter of 2006.

But while Utah homeowners may be cheering their new equity, Kelly Matthews, executive vice president and economist at Wells Fargo in Salt Lake City, warns that Utah's high home prices are becoming out of reach for many buyers.

"In order to move those homes, in my opinion it would be far better to at least flatten out the price increase," Matthews said. "If we had come in at the national average, I would have had more conviction that a year from now we would be building more homes than we will be if we continue to have 17 percent home appreciation."

A separate report in May by the University of Utah's Bureau of Economic and Business Research said that for the three months ended March 31, permits issued for new houses, condominiums and apartments in the state fell to 5,267, a 13 percent drop from the number of permits issued during the same quarter in 2006.

Timithy Reid, a Sugar House resident, calls Utah home prices "outrageous."

"I'm looking at homes on the east side that are $450,000 that are two-bedroom homes," Reid said. "Unfortunately, it seems like we have to go all the way out to Magna or Tooele to buy a home and commute. I think that it is going to get worse."

Reid, who is newly engaged, said it will take at least two years before he is in a position to buy a home.

Shelly Weiss, executive director of the Park City Community Outreach Center, a nonprofit organization that specializes in low-income housing, said entry-level homes in Summit County are nearly a thing of the past.

"Unless you have a federally funded subsidized program where people can qualify, it's almost impossible to get into homeownership," Weiss said. "At the very bottom, Summit County homes are going for $400,000."

Other states that showed strong appreciation included Idaho at 12.27 percent, Montana at 11.68 percent, Wyoming at 11.67 percent and Washington at 11.63 percent.

Michigan, which ranked dead last in appreciation, saw home prices drop 0.66 percent in the first quarter compared to the same period in 2006. Massachusetts home prices fell 0.56 percent.

With Utah's average annual wage at $34,600, expensive homes could take longer to sell. In addition, a national housing slowdown could have a ripple effect on the state as people moving to Utah find it harder to sell their homes.

"It's a double-edged sword," Matthews said. "Sure, we like the idea of having a strong housing market, but we can't ignore the fact that we have a need to provide homes for a certain population and a certain job base."

Salt Lake Ranked Fourth in 2007 Appreciation Forecast

A new report provides some evidence that buyers waiting on the sidelines may be missing out on opportunities if they wait to buy.

Recently, Fortune, with help from Moody’s Economy.com and Fiserv Lending Solutions, issued a forecast ranking the Salt Lake City metropolitan area No. 4 in the U.S. for 2007 appreciation, saying prices will increase 5.40 percent in 2007 and 1.90 percent in 2008. The only three areas to rank above Salt Lake were McAllen-Mission, Texas (8.5 percent), El Paso, Texas (7.10 percent) and Albuquerque, N.M. (5.90 percent). The report studied the nation’s 100 largest metropolitan areas and found that more than half would experience price increases in 2007.

The results of the Fortune report also show that the areas that largely missed out on the housing boom are the ones least affected by the national slowdown. For example, in the Midwest none of the top metro areas are expected to have price decreases. However, places that experienced huge housing booms — like Las Vegas (which came in second to last) and areas in California, are expected to have some of the largest prices declines in the country.

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12 Good Reasons Not To Sell By Owner

Some people moan at the thought of a Realtor telling you not to sell your own home. Some Realtors have bad reputations, similar to those of the stereotypical used car salesman- and many don't understand that Realtors don't do much more than stick a sign in your yard. They don't understand how we don't get paid until something sells and closes. They don't understand the hours and hours we work for free until something really comes through. Sometimes we don't get paid for months on a deal that we are working on, so the "thousands of dollars" it looks like we get for just one deal, really if you spread it out over 2-3 months (or more) of work on a particular sale, only equals what an average job pays. Also, we do have education behind our licenses. Do you cut your own hair? Do you diagnose your own illnesses and operate on yourself or do you go to a doctor? Do you fix your own car or do you take it to a mechanic? Do you defend yourself in a court of law or do you hire a lawyer?

You can't do these things without professional assistance. It's like the old saying, "You get what you pay for". If you aren't an expert in this field, you are probably going to cause more headache for yourself, not to mention cost yourself more money if you try to do it yourself. So, you might as well do it right in the first place! Selling your own home is no exception. In reality, it can be one of the biggest decisions/mistakes you do in your life. You could lose you thousands...or more.

Some items to think about:

• Correct Pricing- Can you really separate your emotions and price your house properly? Do you think you can price your home not to cheat yourself or drive away prospects? The amount Mr. Johnson across the street sold his house for does not necessarily mean that you will get the same price…and who is to say that he told you the actual selling price? Even worse, sites like zillow.com can often estimate wildly inaccurate prices for homes.

• Cost- By the time you spend your money advertising and sell your home you may have incurred more cost than an agent’s fee. A couple of balloons, an ad in the paper, and some free punch and cookies is NOT going to get it done.

• Exposure- An agent can reach far more people than you can. The networks available to an agent are tremendous. Unless you pay a several hundred dollar listing fee, for example, your home will not be listed in MLS, shrinking the pool of potential buyers by several orders of magnitude.

• Safety- Do you want to open your house up to just anyone? Agents track who is in your home, when, and for how long. They vet potential buyers before those clients enter your house.

• Liability- We live in a culture where people bring law suits at the drop of a hat…can you afford to take on that possibility? A misunderstood statement or a problem not disclosed can lead to big problems. Not only do you open yourself up to litigation, agents do not want to bring their buyers to you. Why? Because you are a liability to them and their clients.

• Time on the Market- If your agent is honest with you on price and how to prep your home, it will sit on the market for a fraction of the time it will take you to sell your home. Next time watch how long the home without an agent sits on the market vs a house that has Real Estate Agent representation. Also consider that a home that is on the market too long is generally perceived to have something wrong with it.

• Ability- Do you have the ability and time to answer every phone call and every knock on the door? Can you leave work to show your home to an out of town buyer at 10:30 am on a Tuesday?

• Hassle- You will have to deal with the questions, the knocks on the door, the phone calls, and people wanting to walk through your home. You will have to deal with the termite inspector, the mortgage evaluator, the home inspector, the people buying your home… and that is not even counting your part of the move!

• Negotiations- Do you have enough emotional control to know how best to evaluate a buyers offer and then respond to buyer contingencies, timetables for appraisals, inspections, financing and much more? Will you be able to diplomatically ask for money if an offer is too low, without alienating a potential buyer?

• Buyers- The majority of motivated buyers use an agent. They are looking to make a quick transaction and they are not going to waste time driving around looking for a “For Sale by Owner” sign. And let’s face it, agents are not going to show your house, either. You are on your own.

• Tribal knowledge- Do you know who the honest lawyers are? How about the home inspector? Do you know what their rates are for their services? Can they be trusted, and will they perform for you? You probably don’t know the answers… and guess what… they know you don’t, too! Many will offer services at a low quality standard and then charge you at higher than normal rates. They know you won’t be back.

• Peace of Mind- Do you really know all the forms, inspections, regulations, and laws concerning property transactions in your area? How about tax liabilities? Are you using a FSBO website as a reference? Your buddy that got lucky selling his house? What if you miss something? Are they coming to your aid when it all goes wrong?

When thinking about selling your own home or investment property, really consider the fact that you are putting yourself in a field you aren't educated or an expert in. What makes the world go round is everyone's specialties and talents! It really is best to hire a professional to do the job for you. Proven fact: you'll make more money with a Realtor representing you and your property, than doing it yourself. It really is worth the Realtor’s commission!

Start Flipping Homes Today

You can't help see the television shows showing all the people flipping homes and making tons of money. Every real estate guru is selling his get rich flipping properties kit. If you are thinking about flipping a property you need a little knowledge. Make sure you read this article so you will know the good, bad and the ugly of flipping homes.

I have flipped homes and some have turned out well and others were very challenging. What I have learned over the years is that each deal is different and there are good homes to flip, bad homes to not flip and ugly homes that I would not touch.

If you have never flipped a home you don't want to start with a home like the ones you see on television. The normal flip on TV is way more than a beginner should start with. The homes they normally flip on television are ugly homes. An ugly home is one which usually is gutted and then rebuilt from the inside out. These homes are typically for professionals only. Typically these homes need new sheetrock, floors, paint, trim work, additions, bathroom and kitchen remodeled, and who knows what else. There is just too much work involved to take an ugly house on for your first project.

The second type of home is a bad home. These are homes that look like good homes but end up having hidden problems. If you decide to buy a property you should always get a home inspection. Even a home inspection can't reveal everything so there is always a risk when buying a home. A bad home can be a nightmare and you most likely will lose money. Stay clear of bad homes by getting a home inspection.

The best type of flip, especially if it is your first flip, is the good house flip. I define a good house as one that needs simple cosmetic repairs. A good home is one that only needs carpet, paint, cleaning and landscaping. I love these types of homes. I don't have to be an expert at anything. I can get someone at home depot to lay carpet and I know how to paint, landscape and clean. These homes are a great first investment. You can find these homes using your local real estate agent. Ask your agent to show you the listed REO's. These homes have been foreclosed and taken back by the bank. Typically they only need minor cosmetic work.

Bottom line is that flipping can be profitable. Make sure you start slow by buying a good home and getting a home inspection. Make your first flip a good one...start small.

Buyer-Broker Agreements

It is required by law that if I show a buyer properties, in the State of Utah, that I get a Buyer-Broker Agreement signed. Here is a quick explanation of why. Home buyers typically sign buyer broker agreements with their real estate brokers / agents before writing a purchase agreement. The buyer broker agreements spell out precisely who represents the buyer. It's also known as buyer representation. This protects both of us. It ensures you will get proper respresentation and my loyalty to you is in full force. It also protects me and the time I spend showing you property that I will get compensation for my work and effort. There aren't too many jobs out there that someone does all the work and waits to get paid. Sometimes if the deal doesn't go through, I don't get paid. This obviously is a huge risk for me. But getting back to the most important issue. . . you need to know how I am help accountable and that I promise to serve your best interest as your buyer's agent.

New Marketing Websites

There are lots of websites out there. FSBO.com, UtahRealEstate.com, etc. Another site to find listings is through the link below. If you find something you like on any of these sites, or if you find something driving down the street, just call or email me so we can make arrangements to go see it!

Real Estate Agents Directory and Homes for Sale