The Real Estate Market May Take a While to Recover

The one thing that most people will agree with about life is the fact that everything is always changing. The economy is no different.

According to Housing Predictor.com, Utah’s housing market was one of the last in the country to see a turn for the worse. It has affected home values, sending them into a downward spiral.

In an interview with Jamie Lythgoe, realtor and broker for Re/Max Community-Valley, when asked to rank the current market in Utah on a scale of 0-10 (worst to best, respectively), she said “I would rank it at a 6 or 7.”

Lythgoe said the most reliable sign that the market is looking up would be the absorption rate. According to the Wasatch Front Regional Multiple Listing Service, (WFRMLS), an absorption rate is: “the ratio of sold properties over a given length of time.” So if there are 24 properties sold over the past 3 months, the absorption rate is 8 properties per month. (#Sold/#Months)

Looking at the absorption report generated by the WFRMLS website, Utah’s market is looking better than it was 12 months ago, but still 4 times worse than when it was at its peak in 2006. All in all, things are slowly but surely looking upwards.

So, although conditions aren’t completely dismal, they’re not quite there yet. According to an article featured on DeseretNews.com, there are some local analysts who predict that it may be a while before there can be stability in the market.

In the featured article, Zions Bank executive vice president Michael Morris was quoted as saying that there would be: “More of a gradual recovery building into 2011 and 2012, but still with the backdrop of other (economic issues facing the industry).”

In a report generated by the WFRMLS website, sales have been on a rollercoaster ride since 2007, with a huge plummet in 2008. And while things seem to be looking up in the first quarter of 2010, it may not be stable yet.

According to Lythgoe, people need to consider financing before looking into buying real estate in the current market. “Financing is harder than it used to be, so finding out what they qualify for and what payment amount they are comfortable with is the best thing to start with.”

Also, Lythgoe gives a good idea for what she thinks are the best price ranges for buying and selling right now: “The luxury home market has a large percent of price flexibility because there are so few people in that market. Maybe the best deals are the very expensive properties.”

The opposite seems to be true for the seller’s market: “In the Ogden Valley the best price range to be in for sellers are the lower end properties—those under $500k,” said Lythgoe.

Then, when asked what she would consider to be the biggest change in the real estate market in recent years Lythgoe responded: “It would have to be the amount of people that are well versed [in the real estate market]…the amount of information that is easily available.”