IT’S A SELLERS MARKET!

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I just got back in the office from a meeting with a 94-year old ex-REALTOR because I had an offer on her condominium. She lives in assisted living and I always bring her ‘biscuits’ (cookies) from Ruby Snap which she adores. I’ve been in the real estate business for 32 years and she too .was in for decades. We both lived through markets where interest rates on home loans were 18% (mid-1980’s) and seller’s markets in the 80’s 90’s and 2007.  And we had to laugh because we are currently experiencing yet another seller’s market.

        What’s a seller’s market? – In real estate it’s a phenomenon when the inventory of homes and condominiums is very, very low and there’s nothing to buy. It’s like walking into the men’s jeans section of The Gap and only finding three pairs of green khakis size 44/34, you’re a 30/28 and want blue denim. Why is it a seller’s market? – There are many reasons: 1) after the crash of 2008 people were terrified to ever move again; 2) demand is higher than supply because Utah is seeing a huge growth in jobs and businesses moving in (most counties); 3) investors have been buying up short sales and foreclosures like mad throughout the state since the 2007 crash as rental inventory and 4) parents have been seeing an influx of grown children moving back into their homes because affordable rental housing is hard to find. Oh, and speaking of rental housing, my property manager friends ensure me that we are really low in rental possibilities too in the capitol city. Luckily the flux of students moving in and out of rentals around the semester endings and beginnings allows for more units coming and going than the overall vacancy rate of 3% (meaning 97% of rentals are rented!).

        What happens to buyers in a seller’s market? – They get run over, beaten up and walked on. To win the game, buyers will need to be aware that any ‘good’ property that hits the market will generally have multiple offers within a day or two. Unless you can pay all cash for a property you better be pre-approved with a local lender. The more earnest money (think ‘deposit’) you’re willing to throw upfront at the sellers, the better.  Having your financials in order and having that pre-approval letter in your fist to wave at the seller is absolutely mandatory. And you may have heard it from friends, write a letter to the sellers to accompany your offer. Include a photo of you and the dog, or you and the kids. In multiple offer situations you’ll have to present your ‘highest and best’ bid and sometimes just the photo of that 8-toed cat of yours might win you the home. Really.

RENTAL BLUES

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The Utah Apartment Association tells us that the vacancy rate for apartments in Salt Lake City right now is 3%.  That means that 97% of all rental housing is leased out. That blows if you’re looking for a place to hang your hat, and it’s probably even worse if you have a cat.  Most landlords do not like animals as renters which seems odd to me since most people have a cat or dog, right?

        Here’s a rundown of apartment buildings in Salt Lake City currently under construction or in the planning phases as of March, 2016:

        -165 units on 200 East between 100 & 200 South/Cowboy Partners developers

        -277 units on 100 South between 500 & 600 West called ‘Alta Gateway’/Hunter Group developers

        -the former ‘Carriage for Hire’ site at 400 West between 200 & 300 South-high end apartments adjacent to the Light Rail station there

        -165 Units on 400 West between 400 & 300 South/Garbett Homes

        -about 200 units planned for the former Sizzler Steakhouse property at 400 East and 400 South

        -110 units on 600 West just south of the North Temple Viaduct/Kier Construction

        -158 Units at 260 So. 500 East

        -Salt Lake County announced the sale of its property at 600 So. State to Wasatch Development, which plans for a mixed use development of homes and offices/retail

        The numbers add up to @ 1800 units under construction in or near the downtown core, which adds to the 2000 or so which have been completed in the past three years here.   If you head out a little further south from downtown there’s more plans:

        -The Ritz Classic bowling lanes are now closed forever. The 4.11 acres is scheduled to have 289 units built there in the next 1-2 years

        -The ‘Habits’ bar/property has been sold to the same buyer who built the Lotus apartments on South Temple. He purchased the bar at 832 E. 3900 South and another piece of property at 3723 So. 900 East and is planning about 60-70 townhomes similar to ones he built on the corner of 1700 South and 900 East.

        The Salt Lake Tribune called us recently to ask about all the new condo projects going up in Salt Lake that we knew about. Well, there’s aren’t really any to talk about except the Paragon Station on 300 West and 200 South that is in construction stages right now. Lenders have been very tight on their monies for condo developers but much looser on funds for apartment projects. If you were thinking of buying, lack of inventory is almost as bad as it is with rentals. The average price of a home in Salt Lake County in 2015 was $248,000; Utah County $222,000; David County $229,000 and Weber County $170,000.

What BUYERS Want!

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It’s always interesting to watch trends in housing regardless if you’re a real estate agent or investor.  I’m not talking about the statistics of sales data so much as what kinds of homes are selling and what homes are being built for the current consumer. Maybe you noticed all the articles on living in tree houses, pods, micro-homes and apartments in the last decade? That’s because the economy tanked and people found they couldn’t afford big homes. Fist time buyers were especially hit hard and looked for alternatives.  The American Institute of Architects recently reported that ‘home sizes are beginning to turn around, particularly for custom and luxury homes as well as the market for existing homes.’ That pretty much sums it up-the economy gets good again and people look to building their dreams again and spending the bucks to attain them.

Most interesting and impacting to me as a real estate broker is the effect our aging population has on home sales. Seniors who are close to retirement or newly retired are often shedding their homes and downsizing to condos for the attractive ‘lock and leave’ lifestyle. Two of my clients last month sold their homes because their kids and extended families kept moving back in with them and they really wanted to have peace and quiet without the constant noise of grandchildren. Then again, one client moved up so that she could live with her daughter and son in law because her mobility was slowing decreasing and she was beginning to need assistance.

  The summer Parade of Homes in the Salt Lake Valley polled people to see what they wanted in a new home, as in their ‘must haves’. Here’s the results:

1) Bigger great rooms to gather family and friends for movies, game nights and holiday get-togethers;

2) Master bathrooms with double sinks, walk-in closets and built in organizers in the closets;

3) Tech features such as remote control door locks, live video feeds of the house to smart phones, alarm systems, etc. Also green features . . . tankless waterheaters, and more energy saving appliances and fixtures;

4) Walk out basements. Oh, and speaking of basements, put in a radon venting system at the time of a new home build-so much cheaper than after the fact when the radon is discovered and you have to get an engineer in to mitigate the levels of gas;

5) High ceilings for better light and mental creativity;

6) Three car garages (because so many people in Utah have ATV’s, boats, bikes and ski equipment);

7) Large kitchen pantry-for Costco items methinks!

8)  Central air. It appears that global warming is making the evaporative cooler industry here cool off in unexpected ways.