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.
I'm pulling 3 years into this search. Interestingly, the inventory line (red—'available' homes) shows the most significant change. The plunge into inventory nothingness compounded prices (supply and demand). While values DID go up (as a result), it's interesting to see that the sold homes (black line) bounced around a little but overall remained pretty consistent. When St George went through the market correction of 2007ish—HOMES STILL SOLD; demand what always there. There has always been demand; what changed was the PRICE (value). The vales plummeted, but overall, sales did not. We have been on a 4-month straight sale decline, though I expect February and March will break the cycle.
Values. Will they plummet again?
Yes. I will venture to guess we will continue to see pricing decline. The pandemic brought a housing twist, creating high demand and relocating people. I saw this coming (you can read that blog HERE: https://www.stgeorgeutrealestate.com/blog/march-2020-st-george-real-estate-market-update/ )
I speculate that nationally (and locally), we will see yet another (less dramatic) relocation migration. People purchased homes, and many were purchased in self-inflicted desperation. Across the county, people were buying anything they could—sight unseen, at extreme prices, just to get it. I think there will be a buyer's remorse housing pandemic (though likely not as catastrophic as the market correction). Not all buyers love the homes they bought, and some are unsatisfied with the areas to which they relocated. Some employees are getting shocking news from the Tech Sector where jobs are being cut, or many companies are returning to "in-person" duties.
I think we will see sales and relocations on a few levels—some will be returning from where they came. Some will be purchasing a home they like better. Some will lose their home because they paid top dollar, and now values are lower, and they need to relocate.
ENTER…. foreclosures. Yes, I think we will again see a substantial increase in foreclosures---but again, I do not expect to see the levels we saw in the correction of 2007(ish). Once the foreclosures get warmed up, investors will begin to pounce, bringing the fence-sitters back into the game…and that folks…will start the next cycle. And yes, prices will move higher once more.
Speculation in short:
-Prices will likely drop 25-40% (see how that will wipe away those large down payments—for those who wanted to argue with my foreclosures theory).
-Inventory will increase
-Sales will slow a bit—but will bounce up and down month by month.
-Rental markets will ease, meaning more options and better prices
So, have you made a mistake by already purchasing? No. Sit tight; you'll be fine. If you're forced to sell (or want to), you'll likely lose some value if you've purchased since 2021—but… you'll be paying less for the next home too, which will offset your losses.
Should you buy now or wait? Well, that depends on your situation. If you're ready to find the perfect home and you find it—I suggest going for it. Yes, prices may come down (they'll also go up), but interest rates will likely continue to increase. If you're determined to sit on the fence until prices are rock bottom, remember, we don't know when they are rock bottom until prices rise. So, by the time you figure that out—you may discover that you waited so long for minimal savings (coupled with higher rates and more stringent lending guidelines). Get off the fence. Get into the game.
If you're trying to sell your home and don't understand why it's taking longer than one week…welcome to normal.
For full disclosure, these are my own opinions. I cannot actually see the future (though it may seem like it sometimes). Take it all (opinions and humor) with a grain of salt. If you're ready to get in the game, or you need out… I'm prepared to make it happen.
I am Paula Smith, Associate Broker with RealtyPath of St George. I have been a licensed, full-time real estate agent in Southern Utah since 2006. I have been selling residential real estate during all of the changes in the market and witnessing our St George area become one of the fastest-growing cities in America. I keep my finger on the pulse, paying attention to market conditions. If you're ready to buy or sell, I'm ready to make it happen.