Sales are down for December. Is there a crisis looming? Are we headed for a 2007 housing market nosedive?
No, I don’t believe so. Home sales in St George are lower and this is typical for December sales, it is, however, lower compared to the prior December months for 2016 and 2017. The graph below shows 257 homes sold in greater St George for December. Compare this to 2017 having 295 and with 2016 having 289 homes sold—that’s about an 11% decrease in sales for December 2018. Historically, January is even slower than December. Still, I do not believe this to be any reason for concern. I do believe our market it is shifting, but I personally do not fear this shift. I believe we are going from an insane market to a more “normal” market. Normal isn’t a reason for concern, I’ve been more concerned with the market we’ve been experiencing. It’s the abnormal and anomalies that are real reasons for concern. Normal is a little boring for you “fly by the seat of your pants” and “hope like heck we don’t lose our shorts” kind of investors…. but who wants that kind of investment? The housing market is among the safest bets and long-term investments you can make, so in that respect…. normal is awesome. I welcome "normal".
What will normal bring?
We will see likely lower sales numbers and we will likely see prices stabilize. Who won't like “normal”? Sellers. Sellers are likely the beacons of despair you hear in the housing market canyon, expressing a soft cry and perhaps adding to some panic among our bystanders. Sellers who jumped on the caboose of this fast-moving housing train, who are pricing homes at top dollar, and who are being the most stubborn are likely the sellers that will see less of a return.
Now is NOT the time to be overpricing your St George home.
Here is a graph for the past two years:
Home Prices in St George Utah
Top on everyone’s mind…where will the prices go? Personally, I think prices in St George housing will be relatively stable. We may see small spikes and dips, but overall, I expect prices to hold close current levels, likely through the end of the year. I’m anticipating there will be some deals to be had. With the expected listing increase, among them will be motivated sellers. When there is more competition, you will find some deals on homes that need to be sold quick. My advice is to get your financing in order and be ready (there is never any time to “think” when there is a deal in St George). The buyer who can perform quickly with the least amount of conditions will be the buyers to score any deals. Let me know if you need a referral to a local lender.
Here are some St George Housing Market Year End 2018 Year to date (YTD) totals.
The total number of “SOLD LISTINGS” in greater St George is 3,721 which up 4.2% over last year.
The number of “ACTIVE LISTINGS” is also up 3.8% over last year and “NEW LISTINGS” is up 7%. Having a higher number of active & new listings compared to sold shows that we may witness homes taking a little longer to sell, an increasing market absorption.
The AVERAGE SALE PRICE for single-family homes is up 10% over last year, Interestingly, our MLS has a section where we can run a report for “new construction” and while this isn’t entirely accurate as it does not represent ALL new construction (because some agents will instead list a “new construction” under “single-family home”) this shows the AVERAGE SALE PRICE for NEW CONSTRUCTION as being up 33% over last year. New construction IS higher, building costs have gone up and as a result, all of the local builders have had a price increase. So, while this number may not be “exact” it’s for sure going to carry some weight with accuracy. Building is going on all over St George, for residential and commercial. Sunriver is almost finished with their original community. The “Villas” section of Sunriver (which is independent of the original Sunriver) is underway and homes are selling.
There were 187 sold homes in Sun River for 2018 compared to: 210 homes in 2017 (that is almost an 11% decrease in sold homes). As of today, there are 42 available homes (both new and resale) and this number has been consistent over the past two years (or so).
Resale homes will ALWAYS provide the best “deal”, but new construction remains a necessity because our overall inventory is somewhat low (if a buyer can’t find the home they want, they must build). It will cost you more to build, but if it means the home you want, it may be your only option.
My predictions. Take this for what it’s worth…(it's only a prediction)
Builders have been pumping out spec homes as quickly as they can, just to keep up with demand. I suspect this may backfire a bit for some builders as I expect a slight surplus of homes (both resale and new construction) to be available at some point later this year, this will cause some slowdown in the momentum (or market absorption) meaning, it may take a little longer to move inventory. As a result, prices may dip (a little) but a builder holding multiple properties, coupled with carrying costs and the fact that they paid a premium for labor and materials—it may come as a shock to them when their profit margins shrink. Builders who do not have significant financial strength (or who are already spending anticipated future profits) may fold under pressure and we may see a small ripple in that sector. Again…. This is only a hunch.
It’s been a great year for the St George real estate housing market. Home prices in St George have seen an increase and I do expect a wonderful 2019. If you’re ready to make a move, I’m ready to make it happen. If you’re a buyer—let’s find one of those deals I mentioned. If you’re a seller, let’s discuss a phenomenal marketing plan and pricing strategy to get your home sold. My first newsletter has arrived from the printing company and will be hitting mailboxes in the next few days. This is more of a personal and business mix on events, news, and whatever I may feel like sharing. If you're a previous client, or you've sent an email requesting to be on the NEWSLETTER LIST--then you'll be receiving one soon. If you'd like to be on the list, send me an email with your mailing address and I'll add you.
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 as well as witnessing our St George area grow to become one of the fastest growing cities in America. I keep my finger on the pulse and not only pay attention to what is going on, but I've also been able to accurately predict what's to come.
Allow me to be of assistance and earn your business. If you’ve got a home in Southern Utah that you’re thinking of selling and you’d like a property market report, I can send that to you.
If you're ready to buy or sell, I'm ready to make it happen.