November 28, 2008

Thanksgiving Brings Two New Homes For Northern Utah Families!

Posted to Steve Randall

We hope that each of you had an enjoyable Thanksgiving Day. I know we enjoyed our own family time together and want to thank our facility management personnel and contractors for their extra special effort to get two homes ready for occupancy and allow these two families to move into their new homes on this Thanksgiving weekend. Our team spent their time well into the night to get yards prepared, carpets cleaned, heating systems checked, and the homes properly prepared. We thank them for their diligence in helping these two families realize their dreams.

The talk of the past few days has settled around the lowering of mortgage rates (bankrate.com). In my own family, we talked with our children about moving from adjustable arms to fixed rate mortgages. We concluded that now was a great time to refinance as well as to buy. Wednesday night I received a call from Greg Schaefermeyer at Republic Mortgage. He wanted me to make sure that all our buyers knew of the new interest rates. I receive a daily report from Utah Financial Inc. (Direct Line: 801-546-4619), that shows that rates have been as low as 5.5% this past week with a current monthly average under 6%.

Additionally, in the Wall Street Journal, Bank of America and JP Morgan Chase had full page ads letting customers know that banks had money to lend for qualified borrowers. Bank of America was also working with mortgage holders who needed to refinance their rates as well.

A lower interest rate along with lower home prices makes overall housing in Northern Utah more affordable. For example, a $200,000 loan on a 30-year fixed-rate mortgage has a payment of $1,199.10. With a lower interest rate at 5.5% the payment drops to $1,135.57, or a savings of $63.57 per month. Over a 30-year loan period that savings extends to $22,885.20.

Our encouragement is simple…now is a great time to buy a home. If you are sitting on the sidelines waiting for the absolute bottom you run a great risk of missing these low interest rates in order to save a few thousand dollars on the purchase price. Waiting too long to purchase means catching the bottom of the market when it begins its upswing. It is easy to miss the market turn. We are in a period when homes sales are on the increase, inventory is plentiful, and mortgage rates are at historic lows. Inaction now may result in no action later if you miss the turn.

These two families are in homes now because they acted now. Our next free Home Buyer’s Webinar is scheduled for December 2, 2008, at 7:00 pm. Click here for more details and to register on line . Join in the conference call and bring your questions and concerns. We will have mortgage and title representatives on the call as well. Have a great Thanksgiving weekend.

Posted By: Steve Randall





November 26, 2008

Current Home Sale Reports

Posted to Steve Randall

Yesterday while reading the Wall Street Journal I noticed two pages that caught my attention. The first was the recent report by the National Association of REALTORS® (NAR) that reported a monthly downturn in home sales for October with western states being hardest hit (click here to read the article).

As I perused the local newspaper it also reported statistics from the Utah Association of REALTORS® (UAR) that existing homes sales fell sharply in October.

In Salt Lake County, for example, the number of home sales fell 19.4% from October 2007 to October 2008. In Weber County, homes sales fell 23% during that same time period. In Utah County, home sales were flat; and in Davis County the number of homes sold dropped 17.8%. Please understand these are home sales not home values.

It is important to note that in Davis County the median home value was virtually the same as last year at this time but up 6.5% from September’s numbers. In Weber County the median price was up 4.8% from last year at this time and increased 4.6% from September’s numbers.

About 104,000 existing homes and condos were sold in a 13 state region. Sales were up almost 41% from the same month last year and up by 6% from the totals in September (NAR Report). Many homes were sharply discounted foreclosures.

What does all this mean? When home sales increase we know that the real estate market is about to make a turn for the better. For the past five months that number seems to have bottomed out even though we see some spikes in home sales like we did last month. Some states are reporting an increase in home sales.

The next important factor to consider is the ratio of homes being sold versus homes coming on to the market. If more homes are coming on to the market than are being sold then prices will not rise and likely will drop over time. For example, in Davis County from November 1, 2008 to November 25, 2008, there were 507 new listings added to the market. Only 169 homes actually sold during that time. In Weber County, 375 new listings were added with only 144 properties actually selling.

With the addition of new inventory to the marketplace the natural supply and demand pressures will be to push prices down slightly. One may ask if now is a good time to buy or should I wait for the rock bottom before I purchase? Timing the market is risky. I personally am buying investment properties now because values are near the bottom and interest rates remain low. If you wait to purchase until the market has bottomed totally you will likely find yourself with a rush of buyers trying to purchase which will quickly force the prices up and you will have missed the best opportunity to buy. Interest rates will also increase when the up-turn is made which can cost you many thousands of dollars. Now is a great time to buy a home because it is such a strong buyer’s market… prices are low, seller’s are paying buyer’s closing costs, inventory is plentiful and loan rates are low.

Conforming Fixed 30-year rate: 5.75%
Conforming Fixed 15-year rate: 5.625%
Conforming 5-year ARM: 6.625%
FHA Fixed 30-year rate: 5.5%!!!
FHA Fixed 15-year rate: 6%
FHA 5-year ARM: 7.25%

Happy Thanksgiving!

Posted By: Steve Randall





November 21, 2008

How and When to Buy Your First Home

Posted to Steve Randall

Helping the first time buyer is such a privilege for those of us in the real estate business. There is so much excitement when you finally get the approval to move into your very first home. Next week we will have the privilege to close on a 5 bedroom, 3 bath, and 2400 square foot home in Layton for $175,000. The Seller is paying the buyer’s closing costs. Buyer’s can find bargains everywhere right now.

I have said it many times before, but now is the time for buyers to jump in the market before the up-turn takes place and price start to climb again.
We know there are a lot of questions that buyer’s have with current market conditions so we would invite you to join one of our monthly Buyer Webinars where you can ask questions of mortgage lenders, title companies, and our team of Realtors. Our next free Webinar is scheduled for December 2, 2008 at 7:00 PM. and you can join from the comfort of your own home, using your own computer and telephone, to view and listen to our PowerPoint presentation. Bring all your questions and concerns!

Some topics include:

  • How Much Can I Afford?
  • What Government Program Can I Qualify For?
  • How can I get the Seller to pay for my closing costs?
  • Can I qualify for any Grant Program
  • If I can’t afford a home now, are the homes I can rent-to-own?
  • How Much Will I need to put down?
  • How much will my closing costs be?
  • Is my credit good enough to buy a home?
  • Do I need a Realtor?
  • How do I buy a HUD Home, Bank Owned property, or Short Sale Property?
  • What areas have the best values for home at this time?

Attending this on-line Webinar could save you thousands of dollars. Participant will receive a free David Knox DVD on the 8 Steps to Buy a Home and free Home Buyer’s Guide.

All you have to do to register to send an e-mail to HomeBuyerWebinar@welchagency.com. For more information, please call our 24 Hour Recorded Information line at (800) 784-9733/ext. 5257.

Please remember that this Webinar can save you thousands of dollars on the purchase of a home and you also get a free Home Buyer’s DVD and Home Buyer’s Guide just for attending. There is no cost or obligation. Now is a great time to buy!

Posted By: Steve Randall





November 17, 2008

Can you see this home's potential?

Posted to Steve Randall

One of the things I love about real estate are the wonderful clients we have a chance to work with. Each have their likes and dislikes, concerns and opinions, and their own set of problems and blessings. Everyday is different which gives a great deal of variety to my life.

One of our clients is a wonderful contractor in California. He has several properties that he has purchased over the years, made repairs, and then rented those units. As you recall, the downturn in the market had a devastating impact on the California construction market, causing his core business to take a tumble.

One of the projects this wonderful client was working to complete was located on the east bench of Layton. This home was built in 1984 with almost 4,000 s.f. of living space. The intent of the client was to update and upgrade the home and then re-market the home or use it as another investment property. As a result, the living room floor which previously was sunken is now raised to the level of the rest of the main floor. Walls in the living room were removed or made as half walls to give a more open feeling. Walls were moved to give bedrooms that were smaller more space with expanded closet areas. Downstairs, the drop ceiling was replaced with dry wall, the bathroom enlarged and additional closet space added. New kitchen cabinets, appliances, and plumbing fixtures were ordered but never installed. New double-paned windows have been installed throughout.

With the crunch in credit, the project never got completed and this 6 bedroom, 3 3/4 bath home is now for sale, as a partially completed home. The financial crisis means that there are some important things missing from this home. Kitchen cabinets, painting, bathroom fixtures, and new carpet would be needed to complete this home. The estimated cost for the contractor to finish this home would be $30,000. One who is handy with tools could purchase the home and pick up some real equity.

The home is located in a wonderful neighborhood where homes are valued from $300,000 and up. One can view the property on a virtual tour at www.tourfactory.com/437346.

You ask what is missing in this house? Along with some of the basics, such as kitchen cabinets and bathroom fixtures, what this property really is missing is a buyer. A creative and innovative buyer will purchase this home, finish the repairs, and add some equity to their real estate portfolio.

Posted By: Steve Randall





November 14, 2008

Fact and Perspective - Both Are Needed

Posted to Steve Randall

Having returned this week from the National Association of Realtors® Convention full of enthusiasm and excited to get back to work, I ran into a friend of mine who asked me how the real estate market was faring across the nation. Having heard all the doom and gloom that we view and listen to on the national media, he seemed to have all the facts but lacked the real perspective that related to those facts.

I think he was expecting me to say that we (Realtors®) were all ready to throw in the towel. We understand that these are difficult times and that the market has changed from two years ago. However, there was a general optimism that flowed through the presentations and from the agents and brokers in attendance.

My friend would have never guessed such a response from the newcasts he has been listening to. The media can often present the facts but can miss on the overall perspective. Without perspective, facts have little or no meaning and are rendered useless. Bernice Ross (www.RealEstateCoach.com) reviews some interesting facts that also have perspective. I wish I could remember them all but here are few:

  • In the US, about 35% of the homes have no mortgage… they are paid for
  • 1 out of 464 homes with mortgages in the US have a foreclosure issue (Realty Track)… even though no one likes foreclosures, 99% or more of homes have no foreclosure notices at all. We also understand that some areas have larger problems than others.
  • In some previously depressed areas of the country, the number of new homes and resale homes on the market is declining… a good sign that the market is starting to correct
  • 2007, who everyone thought was such a bad year was actually the fifth best in history!

With the government focused on fixing housing first you can be sure that over time we will see brighter days. If you want to hear good real estate news, please add this website to your favorites list, www.HappyRENews.com. You can look up your state and city and see what good things are happening that never get reported in the daily news. Facts are important, but only in the context of perspective.

Posted By: Steve Randall





November 10, 2008

Real Estate, Lance Armstrong & Disney World

Posted to Steve Randall

This week I have been in attendance at the National Association of Realtors Convention in Orlando, Florida. The training and presentations have been awesome and inspriing. Orlando is also the home of Disney World and Epcot. So what then do Lance Armstrong and Disney World have in common with real estate?

On Saturday, Lance Armstrong, the famous winner of seven straight Tour de France titles and well known for his cancer foundation, LIVESTRONG, spoke to a packed house. He recanted the story of his discovery of cancer and the devastation of his life’s dreams. At first, he was more concerned with not being able to ride again but soon found out that he was in for the battle for his life. His story was fascinating and motivational to me. His last comments to us outlined a conversation with his doctor as he was leaving the hospital. The doctor told him that he could be reserved and quiet about his cancer ordeal…or he could be vocal and open about the experience so that others could benefit from his experience. It was then he decided that he wanted to help others face this illness. At first he thought that would be on a one-on-one basis as he talked with individuals privately. When Nike offered a contribution of “yellow wrist bands” to sell to help fund his foundation, he wasn’t sure if that idea would even work. The rest is now history and this wonderful, talented rider now has raised awareness of cancer all over the world.

Later in the evening after training, meetings, and activities were over, my wife, Kathy, and I headed for Disney World for the last few hours of the day. Arriving late, we had a quick bite to eat, rode several rides, watched the light parade, and then waited for the fireworks show at the end of the day. As I watched the fireworks explode overhead, pondering the thoughts of real estate classes during the day, I couldn’t help but reflect on some of the clients we had recently helped find homes. After taking our buyer friends to many homes, then watching their faces as they walked into the home that lights up their faces like exploding fireworks in the sky I came to appreciate the wonderful opportunity I have to be a Realtor®, a citizen in this great country, with opportunities to be motivated and inspired by great men such as Lance Armstrong.

To tie together these thoughts, now is a tough time for many industries in the company, real estate being one of them. Like Lance Armstrong we can face them, endure the treatments, and overcome the obstacles to create even a better place and a better person. There is nothing to fear in the future that we can’t overcome. Like the fireworks at Disney World, the joy of working in real estate is in the eyes of the buyer when they find that perfect home for them. It is such a joy to help first time buyers finally get into a home. Their excitement illuminates the room just like Disney’s fireworks illuminated the sky. Most of us in real estate love what we do, try to practice our trade to the best of our abilities by representing our clients best interests fairly. It is nice to know that as Americans, we will get through these hard times and the skies will be aglow with light again with success and prosperity.

In this type of economy, the change will start with buyers. Everywhere I read it states that now is a great time to buy a home with affordable homes everywhere and low interest rates to make purchasing a home possible. With the government focusing on this market segment we are sure to see improvement. When buying a home one of the very first things a new buyer must do is qualify for a loan. One of the most popular loans, because it requires a smaller downpayment, is the government backed FHA or VA loan. It requires 3% in cash supplied by the buyer and interest rates are still relatively low. The loan amount for a $200,000 home in Layton, with 3% down would require a monthly payment of $1,163.12 per month on a 30-year fixed loan, plus taxes and insurance.

I thought you might want to see where limits and rates were last Friday: Now is a great time to buy a home.

FHA Purchase Price Limits
Supplied by Greg Schaefermeyer-Republic Mortgage

  • Davis, Weber & Morgan Counties - $397,500.00
  • Salt Lake, Tooele & SummitCounties - $729,750.00
  • Utah County - $323,750.00
  • Box Elder, Cache & Rich Counties - $271,050.00
  • Uintah & Duchesne Counties - $271,050.00
  • Daggett County - $292,500.00

The following are current loan rates as of November 7, 2008
Supplied by Liz Sears, at Utah Financial, Inc.

  • Conforming Fixed 30-year rate: 6%
  • Conforming Fixed 15-year rate: 5.75%
  • Conforming 5-year ARM: 6.25%
  • FHA Fixed 30-year rate: 6.375%
  • FHA Fixed 15-year rate: 6%
  • FHA 5-year ARM: 6.625%

Posted By: Steve Randall





November 07, 2008

In Search of Buyers

Posted to Steve Randall

With the economic crisis still weighing heavily on everyone’s mind and the government focusing on plans to help with foreclosures, tight credit, and affordable mortgages, we can be sure that in the weeks and months ahead we will see progress. For the real estate market to begin to improve, we need to find buyers who are willing to make home purchases now. With homes now more affordable than ever, it is a great time to buy so here at Welch we are in search of buyers for well-priced, affordable homes in Northern Utah.

Beginning tomorrow, ads will be running in the weekend addition of the Standard Examiner and daily on Standard.Net in search of buyers. David Knox, a nationally renowned real estate expert has produced several DVDs that can be used by buyers and sellers alike to make the home buying process simpler. These videos are free to those who request them. Topics include “The Eight Steps to Buying a Home”, “How to Prepare Your Home For Sale”, “How to Price Your Home for Sale”, and even a video for those who want to sell their own home, “Selling for Sale by Owner.”

In Utah, there is an over supply of homes keeping prices low, making now one of the best times to buy. There are good values in single-family homes, condos, and townhomes in almost every area of the state. Some buyers are waiting for prices to hit rock bottom but the risk a buyer faces is the same risks sellers faced trying to time the sale of their home at the top of the market. Many waited too long to sell and when too many homes hit the market the market prices began to drop. The same effect can happen to buyers by waiting too long to buy and seeing a flood of buyers hit the market at one time forcing prices up. Timing markets is always risky whether it be in stocks or real estate. Now is a good time to buy and make a move to Utah to enjoy great values and a great lifestyle.

Posted By: Steve Randall





November 07, 2008

Investing to Retire & Retiring Where You Invest

Posted to Northern Utah Recreation & Attractions, Steve Randall

Today is a travel day for my wife and I on our way to beautiful Orlando, Florida to attend the National Association of Realtors Convention. As my wife and I boarded the plane we could see lots of families with excited children who could hardly wait to arrive at Disney World. As the plane lifted off from Salt Lake International it was easy to see the first real blanket of new snow that had covered the mountains of Northern Utah. The day before, all the ski resorts with planned openings were busy moving up those opening dates as some resorts got 46 new inches of the world famous Utah powder. Even though we are life long residents, we were impressed with the beauty of the moment and experienced a fresh appreciation for how quickly the season can change in Utah. Two weeks ago I was riding with my son down the newly completed Legacy Highway bike path on our road bikes traveling from the new Farmington FrontRunner Commuter Rail Station… and ending up 14 miles down the trail in Salt Lake County. The trees were full of color and the cool Fall air was perfect for the biking activity. When we return from the convention next week, we can choose from snowboarding, skiing, or snowmobiling. What a beautiful place to live…. and to invest in real estate that will rise in value in the years to come.

On the plane I was able to read my emails and noticed another wonderful project being built by Nilson Homes in the hills of Mountain Green, just minutes away from the 2002 Olympic downhill event at Snow Basin. This development is also only 20 minutes from Powder Mountain, another excellent ski resort that many Utahans want to keep quiet about in order to enjoy it themselves! Having learned to ski at Beaver Creek in Colorado and being somewhat acquainted with the resort pricing in those areas, I could appreciate how comparatively inexpensive real estate was in Northern Utah, even though it lies so close to some of the greatest skiing and winter activities in the world.

The Townhomes built at Aspen Meadows start at about $250,000 with the following luxury amenities: granite countertops, tile, rock fireplace, two-tone paint, raised panel knotty alder staggered cabinets, wrought iron railing, jetted tub (great for skiers), pre-wired for surround sound, faux wood blinds, 1500 sq.ft. rock and hardy plan exteriors, and 9’ main floor ceilings. What a great value to invest in now and rent for a number of years to those who come to enjoy the beauties of Northern Utah. Over the years, as one’s mortgage is reduced and retirement approaches, you have an investment that has appreciated in value, the mortgage paid down or paid off, and a place you can retire to with a whole host of activities to be enjoyed during the retirement years. One aspect that I love about being a real estate broker in Utah is helping families buy investment properties that they can use now, assist them in renting the properties for a portion of the time, and then retire to that property in the future. How could it be any better than that!

Posted By: Steve Randall





November 05, 2008

REAL ESTATE VALUES AND TRENDS FOR 2009 & 2010

Posted to Steve Randall

In reviewing the national real estate reports we see that in areas like Florida, Nevada, and Arizona the number of sales is increasing faster than the new listings being added. This means that the over supply of homes on those markets will begin to diminish ever so slowly. As the inventory reduces, supply and demand will take effect and values will begin to increase. Many prognosticators indicate it will take well into 2009, or even 2010 before the market balances again.

Many qualified buyers in Utah may be sitting on the sidelines waiting for the absolute bottom before they make their purchases. Current Sellers are asking how long before Utah will begin to see an improvement in values? Since we tend to lag behind many parts of the nation, our recovery will likely be after the above listed markets. One can watch both coasts to see what they are doing and then find a similar trend in Utah a year or so later.

The key number to watch in order to see when the “turn” will happen is when new listings in Utah are less than the number of homes being sold in a month. For example, in Davis County, August sales were at 265 units. New listings for that month were 353 units. That means that current sellers will be seeing more competition in the future. As a result, homes that sell will do so at lower list prices. That trend has carried over to September and October. Right now, with the current sale pace, there is over a 10-month supply of homes without any new homes coming on the market. Weber County has an 11 month supply of homes currently on the market with more listings being added than are actually selling.

What we expect in the near future is an increase in the number of foreclosures and short sales with reductions in price for the seller. This may appear to be a great thing for buyers but the real risk for buyers is staying on the sidelines too long and missing the bottom. One of the reasons home values declined was that many sellers were waiting for the absolute top of the market before putting their home on the market. When the market peaked, so many homes came on the market that supply overwhelmed demand and prices dropped. In addition we had the subprime mortgage problems and the credit crunch.

The inverse could happen as well. Buyers could wait too long trying to time the very bottom of the market only to find that the market has “turned” and when everyone wants to buy at the same time prices will increase, and at a faster pace than buyers will want. Reports from many real estate experts say that between now and the next six months would be the best time to buy properties. We are buying our investment properties now so we don’t miss these good rates and prices.

One thing is for sure, the Federal Government is focused on fixing housing. There may be some debate as to the best method to do this, but the country’s and the world’s economies depend on this issue getting resolved. With all the chips on the table for many world economies, it would be unwise to be against this effort. Now is a great time to buy real estate.

Posted By: Steve Randall