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!
I personally like to find my Glass Half Full. Therefore I see things better and I feel better. I like to use that theory in the Real Estate Market as well. We have heard so much negative in the past years and I am sure that the reason I have continued to succeed through these tough pessimistic times is based on my glass half full attitude.
One thing I have learned about Real Estate is that it has NEVER been a 'get rich quick scheme' (as some might think.) The 3 P's have been key for me. Patience, Perseverance (long term) and a Positive attitude.
Among the Positives are some Positive Reports from the NAR President Moe Veissi he stated the following in the most current weekly report:
For me, I am again taking the Glass Half Full for it has not served me a bad glass yet. Cheers to 2012.
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.
Do you remember back in 2007 when homebuyers would literally beg to purchase your home? Even bidding more than asking price for the opportunity to do so? Wow, what a difference a couple of years make! Today, this is not the case. Once the real estate bubble burst and foreclosures poisoned the housing pool, buyers suddenly regained the upper hand. But instead of buying, they're waiting, convinced that housing prices will continue to drop. What's a smart seller to do in this environment?
Here are 10 items that sellers should take a look at and handle TODAY!
Hands down, NOTHING turns off a buyer quicker than a dirty house.
The No. 1 biggest mistake is not getting the home in the best possible condition. Linda Secrist and Associates strongly recommend that sellers go the extra mile, from steam-cleaning tile and grout to replacing carpets. If the carpets are old and smelly, you should put in new. If the carpets are in good condition and are relatively new, then at least have them cleaned by a carpet cleaning professional.
GRIME CAN AND WILL DERAIL A SHOWING! The home should be neat and clean and free of all debris. If it reeks of cats, or the kitchen sinks and counters are filthy and cluttered, agents and their buyers will not want to come in or at least not continue through the rest of your home.
Buyers, it's said, buy with their noses. Make sure your home smells fresh and inviting.
Odors are a big one, especially kitchen odors. You may even want to avoid cooking foods, like fried foods, fish, or using certain spices that can leave lingering odors, such as garlic or curry, while your home is on the market.
Some pet owners mistakenly believe pet smells to which they've become accustomed help make their abode homey. Nothing could be further from the truth. If you're a dog person, you might tend to think everyone else is a dog person. But the truth is, 50 percent of the population hates dogs and doesn't want to be near them. If you have pets in the home, you need to deal with them while your home is on the market, to avoid these odors.
It is a good idea to iliminate all traces of pets, not just pet odors. It's important to get rid of pet paraphernalia and have a "pet plan" to make sure the animals are not around when the house is shown.
Often, sellers will leave pet items out such as dog dishes, cat litter boxes, etc. These items will immediately deter a buyer because they wonder, 'What has that animal done in the house?' Also, some people really don't like dogs. The minute they walk in and see this big, old dog bowl, they immediately won't like the house. Same for cats, rodents and especially reptiles!
The same rules hold true for smokers: Remove all ashtrays, clean all curtains and upholstery, and consider smoking outdoors while your home is on the market.
Want buyers to roll their eyes? Leave old fixtures on your doors and cabinets. This may surprise many sellers, but new cabinet hardware and doorknobs will probably cost all of $400 or $500, but it makes a huge difference.
The same holds true for dated ceiling fans, light fixtures and kitchen appliances.
Sellers often say, 'Oh, the buyers can take care of that.' Well, yes they can, but it's going to impede you from getting the highest price possible for your home and it, most likely, will make your home take longer to sell.
Your grandmother may have had it in every bedroom. Your mom may have loved it as a room accent. But today's buyer wants no part of wallpaper. Wallpaper, in today's market, is a definite NO-NO!
Wallpaper is a pain to remove and simply adds another chore to a buyer's to-do list. Today's buyers are very reluctant to take part in this task and will move on to the next home.
Wallpaper is extremely personalized. You've spent hours looking over books to pick out the wallpaper you want. What are the odds that the person walking in the door will also like that wallpaper that you picked out?
Times change, and with them home decor styles. Acoustic popcorn ceilings, once the must-have for fashionable homes in the '60s and '70s, now badly date your space. Popcorn acoustic ceiling is a major turnoff! Best to get rid of it.
If you can't stomach the cost or the mess to remove the overhead popcorn, be prepared to credit a buyer in certain markets in order to close a sale.
When buyers tour a home, phsycologically, they're trying it on to see how it fits, just as they would a pair of pants. If your house is cluttered with too many personal items, it's like the buyer is trying on those clothes with you still in them. A fit is unlikely.
Anything that makes your house scream 'you' is what you don't want. Linda Secrist tells her clients that how we decorate to live and how we decorate to sell are different, and right now, it's crucial to decorate to SELL!
Sellers should try to eliminate personal items, including family photos, personal effects and even unique colors, she says.
As soon as you have family photos, buyers get very distracted. 'Oh, did I go to school with him? What do their children look like?' Suddenly, you're selling your family, and you're not selling the home.
If you really want to hook a buyer, try to place a mirror strategically so that people can actually see themselves in the home, so they can actually picture themselves living there.
Realtors and buyers alike generally bristle when the seller greets them at the door for a showing.
It can be annoying and a deterrent. They will want to walk around with the potential buyer and put in their two cents' worth. It's not good. Realistically, there is only one out of 10 sellers where it's OK to have them there, and that's because they know what is up with the property and how everything works.
Misrepresenting your house online in the Multiple Listing Service is a sure way to really upset buyers and their Realtors.
No buyer wants to see the perfect house online, go to see it, only to find out there is a commercial development backing your yard. Be up front, even show a photo within the home tour with the commercial development. Otherwise, you may get your home ready to show and the buyer will refuse to even go in. Best to prepare the buyer prior to going to the lengths it takes to get your home show-worthy.
Sellers are going to paint the best picture they can. Some listings we 've looked at and wondered how in the world they got that gorgeous photo without showing all the junk that's around it. When you get there, you wonder why didn't they just be upfront?
Much is made of curb appeal, and for good reason: It's your home's handshake, the critical first impression that lasts with most buyers.
Sellers need to trim and edge their yard to get it into the most immaculate condition possible. Power wash the exterior, make certain mud daubers, wasp and bird nests are removed from around doors. Even freshly mulch the beds and trim the trees. Every little detail counts.
Whether inside or out, less is more when it comes to clutter.
Start in the closets. Your closets should be half-full with nothing on the floor. Why? Because most people looking for a house have outgrown their previous house. Showing them that you've still got room to grow gives them a reason to buy.
Kitchens and built-in bookshelves should showcase spaciousness by following the rule of three. For kitchens, there should be no more than three countertop appliances. Meanwhile, bookshelves should be divided into thirds: one-third books, one-third vases and pictures, and one-third empty.
The home office should be very generic so any type of professional can imagine living there. Keep a laundry basket handy for quick pick up of toddler/children's toys, so that when you get a phone call one hour prior to a showing, this will be a quick and easy clean up.
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.