Want to buy a house or sell yours? Now is the time to strike!
“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.”
Zillow said Salt Lake will be America’s hottest market next year because of our lower than average unemployment rate, plus population and home value increases of 2 percent or more.
“I think there’s a lot of accuracy in the report,” said Dave Frederickson, who is the president of the Salt Lake Board of Realtors. “There’s a lot of jobs coming and a lot of activity and positive buzz about the state of Utah. Even today, Hill Air Force Base landed a contract which will bring more people into the state.”
It’s not, “if you build it they will come.” They are already en route.
“I would say 76 percent of our clients right now are moving to Salt Lake City from all across the country,” Evans said.
Zillow said home values rose 5 percent nationwide in 2013. The researcher predicts it’ll rise another 3 percent next year, and, despite talk of interest rates rising to possibly 5 percent , “we’re still points and points below average,” Evans said.
Some real estate agents said it’s both a buyer’s and seller’s market. Others say with about a 3 month housing supply, the market leans in the seller’s favor. With a limited housing supply and so much demand, homeowners can sell their houses on average in less than 4 months and some are selling in just a few weeks.
Last week was the annual Salt Lake board of Realtors housing market forecast breakfast. The highly anticipated event, attended by Real Estate professionals from around Salt Lake City, UT, did not bring any real estate news that realtors who are actively buying and selling homes throughout the year did not already know. The Utah Real Estate market had a phenomenal year. Prices of single family homes in Utah increased upwards of 17%. Home prices in Salt Lake County spiked in 3rd quarter and leveled out. We expect 2014 home sales in Utah to follow a similar pattern this year. Now is the time to start preparing your Salt Lake City, Draper, Sandy or Holladay home for placement on the Utah Real Estate market.
Below is the report by James Wood, Director of the Burea of Economic Research.
With a strong performance in 2013, Salt Lake County’s residential real estate market has almost fully recovered from the worst housing recession in our history. Some of the most notable features of last year’s market include:
Utah’s Solid Economy Increases Demand for Housing
Salt Lake County’s residential real estate expansion rests on the strong growth of the local economy. In 2013, the Utah economy had a solid year with an increase of more than 40,000 jobs and an unemployment rate less than 5 percent. Utah currently ranks fourth among all states in relative job growth. In the second half of the year, however, the economy’s momentum slowed a bit as higher interest rates, the sequester and the government shutdown cut into the growth rate. Despite this slight pause in high growth rates the statewide forecast for 2014 shows an increase in every major indicator with record highs for auto and truck sales, exports and nonagricultural employment (Table 1). Most important, employment has recovered from the Great Recession and job growth is leading to higher rates of net in-migration, a very favorable sign for the real estate and home building industry. Net in-migration is one of the most important drivers of demand for housing.
The sale of single-family homes in Salt Lake County increased by 5 percent in 2013 to 11,686 homes (Table 2). Thirty percent of all sales in the county were in Salt Lake City although home sales in Salt Lake City increased by only 1.5 percent in 2013. Sandy and West Jordan were the next largest markets each with roughly 11 percent market share. Sales in Sandy and West Jordan were up 6.8 percent and 10.9 percent respectively. The small city of Bluffdale had the largest percentage gain in sales with an increase of nearly 52 percent to 103 total sales. Only two cities had declines in sales activity; West Valley down nearly 6 percent and Midvale, down about 1 percent.
Single-family home sales in Salt Lake County established an all-time high of 14,878 sales in 2006. By last year sales had recovered to 80 percent of that peak. However, it will likely be some years before the 2006 peak is reached since that was a level that was clearly unsustainable (Table 3). The combined single-family home sales of the Wasatch Front counties also peaked in 2006 at 29,303 units. In 2013, total home sales for the four counties were 23,555 units, 80 percent of the 2006 peak. Utah County is within 10 percent of its all-time high. In the last couple of years Utah County has had remarkable employment growth which has helped to boost home sales, particularly in the north end of the county. In contrast, the recovery in Weber County is lagging well behind the other counties.
Salt Lake Realtors have a significant share of the home sales market in the county. This has not always been the case. Historically, about one-third of all residential home sales have gone to home builders. Presently, the home builder’s share is only 20 percent of all sales. In 2009 it was as low as 10 percent (Figure 1). The home builder’s share of the market will improve in 2014 due to the recent increase in housing prices and decline of foreclosures. Rising home prices are bringing home builders back into the market. Over the past few years home builders simply could not compete with declining home prices due, in part, to price discounts on foreclosed and short sales properties. Now, with prices on the rise and the number of distressed sales greatly diminished homebuilders are in a more competitive position.
Here is a link to the forecast. http://www.slrealtors.com/services/live/
As Real Estate Agents in Salt Lake City we are excited for the upcoming year, if you would like to speak with a professional Realtor about the upcoming sale of your Utah homes please contact a Linda Secrist & Associates team member.
Clutter in a home depleates the space making it look smaller and less valuable. Learn how you can increase the value of your home, by maximizing the space in 5 areas of your home.
A disorganized closet screams to buyers that there is NO SPACE! Buy shelves, drawers, and shoe racks to take control of your clutter and show the optimal space your closet has to offer!
Your attic should not be a place to store unwanted junk and boxes. Turn this underused space into a storage heaven, or better yet a bonus room for guests!
If your basement is unfinished use it for organized storage space, or finish your basement and turn it into optimal living space. A finished basement is an instant home value booster!
As cooking at home is becoming more and more popular to homeowners, a kitchen pantry has become a very valuable asset to the home. Adding products such as spice racks, and canned food organizers is sure to be a plus to prospective buyers.
LINDA SECRIST - LINDA SECRIST & ASSOCIATES - EVERYTHING THEY TOUCH TURNS TO SOLD!
Looking for ways to benefit as a Real Estate Investor? Well, tax season is here and we have provided some tax tips for Real Estate Investors that will help you get the most out of your real estate holdings.
If you turn your investment property into a primary residence. you can avoid capital gains tax altogether. To make this work, you must spend 2 years (or 730 days) living in the home in the last five years. The time doesn't have to be sequential. You just need to establish residency, then you're eligible to sell the home and can make up to $250,000 in capital gains ($500,000 if married filing jointly) without paying any taxes.
TV shows glamorize quick house flipping techniques as they flip a house in a matter of weeks, however when this happens so quickly a large portion of the profit will go straight to the IRS unless you hold a property for a year or more.
Captial gain is considered to be any investment profit and is tax based on the amount of time you've owned the property and on your income.
You'll be charged the income tax rate of 35 percent or more if you hold an asset for less than a year. If you keep a property for more than a year, you'll qualify for long-term capital gains taxes, which normally top out at 15 percent.
Don't be surprised if the IRS consider your several real estate transactions per year as business or trade rather than an investment strategy. While the circumstances may vary from case to case, if you're earning more than half of your income from real estate, your earnings will change from 'capital gains' to a means of producing income that's subject to ordinary tax rates. Plus, there's an additional 15.3 percent in self-employment taxes.
A like-kind exchange is a good option if you are wanting to avoid capital gains taxes, but you want to get a new property. The provision (also known as section 1031 exchange) allows you to 'exchange' one property for another of similar value and defer the tax bill.
Both the property you give up and the one you receive must be used for investment purposes, trade or business in order to qualify. The exchange of any real estate for another piece of real estate, regardless of either's quality is like-kind. It also must be 'like-kind,' or an exchange of two. While you can exchange a parcel of land in the city for a dairy farm in the country, you couldn't exchange that same city parcel for say, a flat-bed truck.
You can also do a tax-free exchange of a rental property that has been used for personal purposes for a similar piece of property, (this came into effect back in March of 2008.) You must have owned the property for 24 months before the exchange, and must have rented the home for 14 days or more in order to qualify. You also cannot have used the property for more than 14 days or 10 percent of the time it was rented in the past two years, whichever is greater.
Remember if and when you decide to sell the property you exchange for, you'll likely owe taxes. Like-kind exhanges will only defer your tax bill.
LINDA SECRIST - LINDA SECRIST & ASSOCIATES - EVERYTHING THEY TOUCH TURNS TO SOLD!
It is easy, especially in this economy, to be tempted to delay or even skip minor home maintenance repairs, cleaning jobs and inspections in your home. But don't be penny-wise and dollar-foolish. That $200 or $300 you save today could result in expenditures of $3,000 or even tens of thousands next month or next year if hidden problems in your home go unnoticed and become worse.
Consider coughing up a little dough to take care of these small jobs before they morph into gigantic, expensive jobs later.
Cost: $200-$300, depending on where you live.
How often: at least once a year.
When: spring or fall. Heating, ventilation and air conditioning, or HVAC, companies aren't as busy, and you're not in dire need of heat or air conditioning.
What an inspection might find:
The furnace blower is not working properly. Cost to repair or replace: $100-$150. Possible consequence of letting it go: a broken heat exchanger. Potential savings down the road: $300-$1,000 to replace the heat exchanger or $750-$3,500, depending on the energy efficiency, to replace indoor or outdoor furnace components.
The reversing switch in the heat pump is broken. Cost to repair or replace: $100-$300. Letting it go results in no heat from the heat pump, and the system switches to a more expensive auxiliary heat. Potential savings: lower heating bills.
Cost: $65 for an inspection; $150 for inspection and cleaning, including removal of creosote buildup, which may lead to a chimney fire.
How often: once a year.
When: before your first fire in winter.
What an inspection might find:
There's no chimney cap. Cost to add: $150. If you let it go, rain water can get into your chimney, damage the chimney liner and damper, and even saturate mortar joints -- causing mold. Potential savings: $2,000-$4,000 to replace the chimney liner.
Other problems may include: a cracked chimney crown, which can be repaired for $300-$500; chimney flashing that needs caulking, which can be done for $80-$100; and waterproofing the exterior brick, $350-$600. All these fixes will prevent rainwater from getting in and mold from forming.
Cost: $75-$200 for an inspection; $200-$300 for a termite protection contract for qualifying homes with no current evidence of termites to cover treatment and repairs for any later infestation.
How often: once a year.
When: any time, although termites are more active in spring and early summer.
An inspection might find subterranean termites that come from the ground or flying termites. If left untreated, these bugs damage framing, trim, drywall, furniture, carpet, copper and other soft metals. Termites cause more than $5 billion in damages a year in the U.S. The average homeowner loss for termite damage is $3,000, but losses can be as high as $30,000 or even $80,000. Most homeowners insurance does not cover repair of termite damage.
Cost: $100-$300 for a 200-square-foot deck, more for a larger deck.
How often: every one to three years, depending on the amount of traffic, moss and mold.
When: any time in sunny weather.
Power washing gets rid of stains, algae, mold, mildew and moss. Algae and mold can make your deck slippery and dangerous. Sealing your deck after it is cleaned helps prevent water damage. Wood soaks up rain like a sponge, expands and then shrinks, Lee says. Sealing makes the water bead up and roll off. And let's not forget -- your deck will look nicer, too.
If you let it go, your deck will warp, nails will pop out and the deck won't last as long.
Potential savings: $4,000 to $20,000 or more to replace your deck, depending on size.
How often: every year.
When: a sunny day.
The purpose is to get rid of lint buildup. If your dryer is not on an exterior wall, it's likely that the vent leading outside is clogged up, says Gessner of A Step in Time Chimney Sweeps.
If you ignore it, the result could be a disastrous fire. Once the vent gets clogged, the dryer starts overheating and it can catch on fire.
Potential savings: your home, your furnishings, your belongings and your life.
Cost: about 50 cents per square foot for hot water extraction cleaning, or $500 for 1,000 square feet of cleaned carpet.
How often: every 12 months; more often for high-traffic areas and homes with small children, pets or smokers. Manufacturers' warranties may require cleaning every 18 to 24 months. You can save money by focusing on regular cleanings for high-traffic areas and waiting up to two years for the entire carpet.
When: any time.
If the carpet looks dirty, you've waited too long because some soil can't be removed with vacuuming. This soil will bind to your carpet and dull the texture, shortening the life of the carpet.
Your home also will be healthier with pollen, bacteria, insecticides and dirt removed, says Howard Partridge, founder and president of Clean as a Whistle, a cleaning company outside Houston.
Potential savings: extending the life of your carpet. Replacing 1,000 square feet of medium-grade carpet, including padding and installation, costs about $3,000.
First-time homebuyers almost always make a few mistakes when buying their home. Whether they simply paid too much, chose the wrong type of mortgage or forgot to budget for needed home improvements and repairs. Working with a trustworthy, experienced lender can help prevent such mistakes. But consumers also need to take responsibility for their budgets and choices.
Following are the four biggest financial mistakes of first-time Utah homebuyers:
Lenders qualify buyers based on their incomes and debt-to-income ratios without considering how much the borrowers spend on items such as transportation, savings, food and other necessities.
1. Too many first-time buyers believe their income will continue to grow and are so excited about buying a home that they borrow the absolute maximum they can afford instead of allowing themselves wiggle room for a partial loss of income or for future expenses such as potential flood or other household disasters, children or health problems.
It's a good idea to review how much you want to spend each month on housing prior to meeting with a lender. In other words, create your own individual budget and know your limits at the time of purchase. It's not a good idea to spend more on a home on prospect of potential increased future income.
Meeting with a lender for a buyer consultation and prequalification for a mortgage should be the first step toward homeownership. Yet many first-time homebuyers wait until they are ready to start house hunting before contacting a lender.
2. It is never too early to set up a free buyer consultation with your lender. Every buyer needs to get prequalified early enough in the process so that they can make some changes if they need to or correct errors on their credit report. Some buyers may need to spend a year saving more money for their down payment, increasing their incomes or cleaning up their credit before making an offer on a home.
A score of 680 to 720 can get you good mortgage rates, while a FICO score of 620 is usually about the lowest score to qualify for most loans and will not earn you the best interest rate.
While most consumers know it's important to have a high credit score, not everyone understands how costly a low score can be. All mortgage lending is done with a tier of interest rates and terms based on consumer credit scores. A credit score of 720 or above will earn you the best rates and can potentially save you thousands of dollars over the term of the loan. Websites such as Bankrate provide information about how to improve your credit score.
3. Another important thing to avoid that is often overlooked: Even after a mortgage approval, consumers must AVOID applying for new credit or taking on new debt, because a second credit check is often required before settlement.
4. Get the loan that fits your needs. No need to pay a premium for a 30 year fixed rate mortgage if you know your company will relocate you within 5 years. A 5/1 Arm may be your best option in this case. First-time homebuyers today typically opt for a 30-year fixed-rate mortgage. Their conservatism is a reaction to stories about the dangers of interest-only mortgagesand adjustable-rate mortgages. Home loan alternatives to a 30-year-fixed sometimes make more sense.
Homebuyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or, if they can afford it, even a 10-year mortgage to reach their goals.