Real Estate

Are We Headed for a Housing Crash?

The media has been throwing around the idea that we’re headed for a housing crash. But is this really the case? To answer this question, we need to look at the number one law of economics: supply and demand. Demand is measured by Household Formations, meaning someone is occupying a new property without relinquishing or selling one, like a kid who’s moving out of his parents’ house for the first time. Right now, in the US there are 1.4 million households being formed per year. Then we have supply, which comes in the form of new construction. Here we look at Housing Completions, or homes ready to move into, which currently equals 1.2 million, after counting for those being replaced. This means that demand for homes remains greater than available completed inventory or supply, which bodes well for home prices being supported. What does appreciation look like in your area? Just put your zip code in the comments and I’ll send over a report with your local data.

Now Offering Utah Housing!

We are excited to announce we are now offering Utah Housing for first-time home buyers!

Due to the highly competitive market, it’s a harsh reality that first-time buyers might need an extra boost to gain entry into the market. This Utah Housing program can give them the support they need!

The program is dedicated to increasing accessible and affordable housing throughout the state of Utah, which is why they offer several mortgage loan programs to help first time buyers be able to purchase a home. These 30-year fixed-rate loans range from FHA and VA loans to conventional loans.

If cash at closing is a problem for you, the Down Payment Assistance Second Mortgage program could help you purchase with little to no cash investment. Basically, it’s like taking out a first and second mortgage, and the second mortgage covers your down payment.

A client of ours that used the Utah Housing program for their down payment had this to say, “Working with ALV made the initially terrifying process of buying my first home feel so much more doable. They connected me with a great program that assisted me with my down payment, which made all the difference when I submitted an offer on the home we loved. I’m grateful for the team’s patience in explaining everything to me and always being available for phone calls when I needed clarification. ALV did a great job working with us through the process and helping us make our first home purchase a possibility.”

We can provide the same experience for you! We’ll take the time to explain the ins and outs of the program and be readily available to answer any questions you may have throughout the process.

If you are worried that your lack of down payment may affect your chances of competing in the market, although it can be a challenge there are programs like this out there that are dedicated to helping more first-time buyers get homes.

If you think you or someone you know could benefit from this program, reach out and let’s review your situation, and get you qualified so you can begin your home search!


Market Update: More Inventory Available

In the last month we have seen the housing market start shifting and we are seeing early signs of the market cooling off. People keep asking if the market is going to crash, and I don’t think it’s going to. It feels like the we have hit a plateau in pricing and that the market is beginning to soften. We are still very much in a seller’s market, but we are seeing the market start shift and make strides towards a different environment, one that puts an ease on purchasing. With more inventory becoming available on the market in the last month there is now twice as many homes for sell! As you can see from the chart at this time last year there was only about 2,700 active listing available for purchase. At the end of May this year we had over 5,000 active listings. This means purchasing today may be easier than it was at this time last year. There are twice as many homes to choose from, which means more opportunities for buyers to purchase! I spoke with a realtor recently who had two listings that lasted on market for 13 days, which is twice as long as the usual turn time we have been seeing the last two years. When they did finally receive offers for these listings each home only got one offer each. Interestingly enough each offer was still above list price. All of this together is equating to a calmer market for buyers to compete in. There are more options today, which means it could be much easier to go under contract. Although it may feel like a challenging time to purchase, it’s not impossible. This increase in inventory has already brought a positive shift to the market and eased some of the heat from the overwhelming seller’s market buyers have been caught in the last few years. If you got demotivated last year because you couldn't find anything you liked, there is more inventory available today giving you the opportunity to find exactly what you are looking for. We always say the right house comes along at the right time and this increase in available inventory could be the moment you’ve been waiting for!

Lock & Shop Options – Helping Offset Rising Rates

It’s no secret we are living in a rising interest rate environment. And with it comes uncertainty and a tricky market that makes purchasing a new home or investment property a bit more of a challenge. We are now offering a brand new, innovative program called Lock-and-Shop. This awesome program is a helpful tool that allows you to lock in an interest rate before you find a home, giving you a huge advantage in the current market - TIME. With a limited supply of homes for sale, it may take you longer to find a home you’d like to purchase. It could be a few months between your pre-approval and you going under contract. During this time interest rates have the potential to rise to the point where you no longer qualify for a mortgage, or you can’t afford a home in your price range. Any increase in your debt load or mortgage payment could prevent you from qualifying. That’s why this program is amazing because it allows you stay qualified while you shop for a home. So how does it work exactly? We lock in your interest rate for 120 days even though you have not found a house. The best part is this program comes at no extra cost to you! However, there is a change depending on how long you’d like to lock for. Let’s say a 30-day lock has an interest rate of 5.25%, then a 120-day lock may have an interest rate of 5.5%. When you do find a house if rates are higher good for you, you’re already locked in at a lower interest rate. However, if rates go lower, we do offer an option where we may be able to negotiate a float down to the current market rate. We’ve been seeing a lot of success with this program. Back in February we locked rates for five buyers who were actively looking but hadn’t found the home they wanted to purchase yet. Three of them just went under contract last week and we were able to use a previously locked-in interest rate, that was a full percentage point lower than today’s market rate. Saving them about $400 a month on their mortgage payment! Plus, if you have been considering building a house this program is perfect for you too. Due to rate increases thousands of people who began building a house last fall no longer qualify. They have not only lost their construction deposit, but time they could have been in another house. So, in addition to free 120 day locks we also offer 180, 270, and 360 day locks. (However, these longer locks do require a 1% deposit which will be refunded when you close on your house). If you know anyone who started building a house but then couldn’t qualify or if you have been thinking about building your dream home but don't want to risk interest rates going up, then let’s look at using this program for you. We can lock in your interest rate today for up to 360 days giving you the peace of mind to build, know what your interest rate and payment will be once complete, and know that you will qualify for the loan once the house is built. The Lock-and-Shop program can give you an exceptional opportunity in this market. So if you are serious about purchasing this year and think this program could benefit your situation, give me a call and let’s talk about getting you locked in a rate today.

5 Questions to Ask Yourself Before Deciding to Buy a Home

Thinking about purchasing a new home this year?

Here are a few questions to ask yourself before buying a home:

1. How long do I plan to live in this house?

2. Where do I see myself in 5 or 10 years?

3. Do I have to or want to make home improvements?

4. Do I want to keep cash on hand for other investments?

5. How quickly do I want to be debt-free?

If you have answers to these questions, give me a call to discuss your options for purchasing. 


Take Advantage of Your Tax Return



Although it’s hard to believe, it’s tax season once again! Many lucky filers will be looking forward to a nice tax refund this spring. If you are planning to get a refund this year before you go on a shopping spree, you may want to consider some other responsible spending options – like using the money as a down payment on a new house or investment property. Although it can be tempting to “Treat yourself,” Resist the urge to splurge! Take a hard look at your finances and figure out what you can do with your tax refund to improve your financial standing this year. There are many ways you can use your tax return to benefit you more long term. If now isn’t the time for you to invest in real estate or refinance maybe take your refund and use it to pay down any accrued debt or complete a few improvements or upgrades around your home. Remember the key to financial success is getting your money to work for you not against you. I would love to talk to you about a beneficial way to spend your refund this year. Give me a call today and let’s review your situation.


Utah Housing Market Forecast

A recent report from the Salt Lake Board of Realtors described 2021 as the year of record-breaking price increases in Utah. Statewide, housing prices increased by 27%, far surpassing the 43-year-old record of 20.1% set in 1978. For the last nine months of the year home prices consistently increased over 20%, when compared to the same month a year early. Price increases were not confined to Wasatch Front; nearly every county in the state saw increases. In 2021, Utah ranked second behind Idaho for rapid acceleration in home prices. These record-breaking price increases are expected to continue in 2022. It’s no secret that Utah is growing and expanding. Between 2020 and 2021, the state experienced an annual population growth rate of 1.8% – which is the highest increase since 2017. ranked Salt Lake City as the #1 housing market positioned for growth this year. Utah is one of the only states where the homeownership rate has never fallen below 60%. The homeownership rate is the percent of occupied housing units that are owner-occupied and luckily the relentless rise in housing prices has yet to threaten this. Nevertheless, many people believe the continuous rise in home prices has placed Utah in a housing bubble that is subject to burst at any time. However, historical data indicates that a housing bubble appears when there are extended price declines associated with a substantial loss in jobs. Every period of price decline from the 1950s to 2008–2011 has been associated with a weak or contracting labor market. So, for Utah to experience an actual housing bubble it would require a rise in jobs losses, which is an unlikely prospect in the next few years. Utah’s unemployment rate dropped from 2.6% to 1.9% by the end of 2021. From this information we can infer that a more likely outcome for Utah over the next two to three years is a period of price moderation. Although price momentum will trend lower, it is expected Utah is in for another year of double-digit increases of 10% to 12%. High prices, interest rate increases, listing shortages, and a slowing rate of job growth is expected to combine and hold sales to around 17,000 units in 2022. Although mortgage rates are expected to rise, the increase will be modest throughout the year as the Fed continue to taper. The average interest rate for 2022 based on forecasts, is 3.55% (APR 3.884%). We have already seen rates slightly increase; however, they are still low when compared to pre-pandemic rates. The flip side to rising home prices is an extreme benefit for existing homeowners who will gain equity from strong price increases. As owning real estate in a high-growth market is a prime opportunity for wealth creation. The report found that in 2021 alone Utah’s 700,000 homeowners’ experienced home equity increases by at least $82 billion. Wealth was created simply by paying their mortgage each month. In contrast, 300,000 renters in Utah who had no increase in wealth - faced double-digit increases in rental prices. Apartment List’s National Rent Report found that rental prices went up $300 per month in 2021. This is staggering! Owning real estate is still the best way that to create wealth. If you are a renter looking to buy, I highly recommend acting sooner than later to take advantage of current interest rates and home prices before they move more. There is a cost in waiting. If you are already a homeowner, you may want to evaluate the idea of a refinance and when the best time to act would be. Our team is watching the market daily and listening to reports from the nation’s experts, in order to help you navigate the market and identify the most opportune time to move forward with your purchase or refinance. If you have any questions about what’s to come in the market or what is the best move for you this year, reach out! I would love to further discuss the market and how you can benefit from it this year.

*Article Resource: Salt Lake Board of Realtors Housing Forecast*