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.
Reviewing "greater St George area" residential as of March 10, 2023, for the median sale price, 2022 vs. 2023 in January and February, we are down 10% for both months.
Comparing 2021 to 2023, we are up 15% for January and 18% for February.
Comparing 2020 to 2023, we are up 55% for January and 46% for February.
2018 vs 2023 January up 70% February up 72%
2016 vs 2023 January up 115% February up 133%
So where is the "crash" threshold? Our St George, Utah, residential market is already down 10%, but we are still way (way) up from the past several (including pre-covid) years. We may see another 20-40% decline in pricing. Likely settling into the 2019-2020 median prices. Is this considered a "crash"? Maybe for some, but I don't think the majority will view it as much of a crash as a 'correction.' How quickly will we correct? I think it will be slow and steady. My protection is that by the end of the year, we will be down 20% over last year, and we will likely see 30% by the end of next year (world events or the political spectrum may tip the scales faster or the other direction).
Hold or Fold or Hit
Should you wait? That depends. Is your money safer in the stock market? (hint….NO). If you're looking to flip, I'd say wait. We will likely see increased foreclosure activity by the end of the year. Maxed home equity loans ballooning in interest may knock some homeowners out of their half-completed remodels and into foreclosure.
If you're looking for investments, purchasing now could work long-term if you've got all cash or a significant down. A property that needs some updating will yield the best results (new and newer construction will always be higher in price, offering less equity and higher risk for the shorter term). Anything you won't be pressed to sell in the short term will likely pencil at some point. If you're buying for the short term, you'll probably lose money. However, if you purchase something else, you'll recover some loss by paying less for the next home—draw.
When is the perfect time to buy? When you find the home you love—that's the right time! The home that "got away" seems to weigh on the minds of buyers more than coordinating precise financial timing. Real estate is the safest investment. Yes, values will increase and decline, but you still possess the collateral, and it does not vanish. The same can not be said for collateral over $250k in institutions such as Silicon Valley bank.
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.