St George Real Estate Housing Market Conditions and Projections

As we enter December 2023, we find ourselves approaching the concluding weeks of what has proven to be a somewhat turbulent year for the real estate market. I hesitate to label it a "bad" year; rather, it has been a corrective period, a return to what we might consider normal. Defining "normal" in this context, I'll use the pre-COVID era as the baseline, as the post-COVID period appeared to be the instigator of the anomaly. During the COVID anomaly, we witnessed a sharp decline in inventory, accompanied by a surge in sales, offering the younger generations a firsthand lesson in the principles of supply and demand in economics.

Today, some individuals anticipate the return of what they consider "normal" interest rates. However, this is where it becomes intriguing. The current interest rates are, in fact, the "normal". The 2-5% rates we enjoyed over the past several years were the anomaly. It's doubtful that we'll witness those low rates again. The past is shaping the present housing situation, with buyers hesitating in the hope of the return of the once elusive low-interest rates. Sellers are divided, with some reluctant to part with their advantageous rates. Some sellers seek to sell at prices reminiscent of a year ago, which is unacceptable to current buyers. Consequently, the market has experienced a slowdown.

Check out this graph. I pulled Greater St George, showing 2019 to the current (November 2023). It's interesting to note that we are quite similar today in active listing and Sold listings as we were back in 2019, with one exception...PRICES. Housing prices are still significantly higher today compared to 2019. It took 2 years for that anomaly to increase; I suspect the decline will happen quicker. 

Nightly Rental Homes in St George Utah

Vacation Rentals are popular and sought after here in St George, Utah. This article aims to answer frequently asked questions about short-term rentals (STR), also known as vacation rentals or nightly rentals. First things first….STRs in St George and surrounding areas are not sold within single-family residential homes—they are always within an approved "nightly rental zoned" community. Hurricane is a little different, but they have a wait list that can run into a year or more; I will highlight their rules in a future post. 

Here is another article highlighting requirements for STR in St George: www.stgeorgeutrealestate.com/blog/purchasing-st-george-vacation-home-rental/

What are your investment goals?

I want to buy a STR and earn positive cash flow.

--or--

I want to buy a second home where I can enjoy and rent it while I'm not around to offset the costs of owning it. No positive cash flow is required.

Property taxes…

I've been seeking change in Utah's property taxes for more than a decade. Our residential property tax system needs to be fixed. My ideas of what could correct the property tax system are largely modeled from Prop 13 in California (I like to point out that Howard Jarvis initiated Prop 13, and he was a Utah native). While I'm not particularly eager to borrow anything from California, I think this plan brings his idea back to Utah.

My property tax change ideas are specific to residential rather than commercial. Commercial also needs a revised plan, though there are more viable solutions than modeling it identically to residential. It's essential to have a fair and effective system in place that benefits both homeowners and the community as a whole.

Last year, while fighting the property tax increase, I searched many property parcels, including commercial. I noticed that most commercial assessments didn't go up; if they did, it was minimal. I also noticed that many went DOWN. I found these details odd, but I was so focused on residential that I tabled these curiosities. Researching commercial in Utah is complicated because several years ago, one of our larger commercial brokerages left our MLS system—another tabled curiosity.

Over the past few months, I've escalated my approach, reaching out to any of our representatives who will listen to determine WHY our leaders have yet to be interested in correcting our broken property tax system. 

St George home sales have been stagnant. February marks the 5th month of stagnant sales (nearly identical figures); January dropped (normal), but February didn't jump—which is very unusual. Typically February and March have a decent sale increase due to the annual Parade of Homes event. I am holding out hope for the market to do a March rebound, however, as there are currently 285 homes pending (since February 1, 2023). The higher number of homes pending is positive news, and we may see a delayed increase in sales. Lending has been more challenging lately, so the delay of the expected "spring bump" in home sales may result from delayed loan completion.

Year-end St George Real Estate Market Report

Here we are, at the beginning of the new year and ready to speculate on what is on the housing market horizon. We must review the past to know what to expect for the future. This article will focus on Greater St George for 2022 and how the market fared within the year and compared to prior years.

First, my "go-to" infographic was pulled from our MLS. I prefer this graphic for many reasons; I keep the criteria consistent, making it easy to compare.

November 2022 St George housing market report

The housing train has slowed.

You read it here first, folks. I've been telling you this was coming, and here it is. Is this the end? Are we heading for (another) complete housing market crash? 

No…I don't think it will replicate the crash of 2006. I do believe we will witness several similarities. We will push the boundaries of our comfort zone, much like those last few bites of Thanksgiving dinner.

This report will show what was. What is. And what (may) be in the St George and Hurricane housing market. Keep in mind that "what may be" is my opinion—I do not have access to determine the future, and my analysis should be taken as speculation (infused with insight and intuition).

September 2022 has about the same inventory level as we had "pre-covid" September 2019. Last month I wrote that we'd watch this level and see if inventory levels continue to climb. It did.

The genuine concern was the number of SOLD homes. For September 2022, we sold 203 homes; we haven't seen lows like that since February 2016, when we sold 205 (January 2016, we sold 187 https://www.stgeorgeutrealestate.com/blog/st-george-utah-housing-market-report-july-2018/). Ironically around that time, inventory hovered around 1000-1300 listed homes before going lower into 2017, then remaining around the 700-800's available homes. Remember, this is specific to "greater St George residential." I typically do not pull in Hurricane or Zion areas, so comparing past data trends is easier.

Home for Sale in Washington Utah

257 Prickly Pear Drive
Washington, Utah

Price: $425,000
MLS 22-235697

Bed: 5  Bath: 3
NO HOA, RV Parking
Garage: 2
Square Footage: 2,242

September 2022 St George Real Estate Market Report

If you've followed along on my blogs, you'll know where I stand on the market and conditions and my speculation on what will happen. So far, I've been on point. My option tends to go against the grain of many agents in the industry; however, that is nothing new. I am nothing if not opinionated. I refuse to tell people what they WANT to hear, especially if it's self-serving. If my opinion makes you hold off on buying or selling, that is your decision, and I support you. I'd rather sell nothing than have a buyer feel like I only delivered the "pros," ultimately feeling like they made an uninformed decision.

So where are we today in the St George real estate market, and what are the conditions?

"Covid" was an event on multiple levels. Aside from the apparent (health), it becomes a marker in time, much like an epicenter of an earthquake. That moment sent shockwaves and created a ripple effect, spurring a chain of events in housing, stocks, interest, and politics. It was global. The reverberation, though government-induced, is going to change the course. 

It’s August already, the year is progressing, and the St George, Utah, housing market has begun the shift. Our inventory has increased at a very rapid pace. It seems concerning upon an up-close examination. It is disturbing, quite frankly. But sometimes, you must step back and see things from a distance. The photo below is a great example. The top picture shows the housing market for the past TWO years (since July 2020). WOW…PROBLEMS ARE HERE! Inventory is at record levels, and sales have plummeted to their lowest lows.

Now, look at the photo below showing the last THREE years.