Salt Lake County Breaks 1000 Homes Sold In May

What is a normal Market?

You have seen the headlines, "Home sales drop dramatically", "Home sales decline 50%", etc, etc. If you are a regular visitor to this blog, then you already know I like to challenge headlines with "actual" numbers. Often we forget to look at where these numbers are coming from. We had a housing boom, although it was slightly more modest in the great state of Utah, we were affected by artificially inflated home sales. Many would consider the housing boom to have begun early in 2004 and to have tapered off here by the 2nd half of 2007. Taking a look at housing numbers during the boom will give us a clear understanding of what inflated housing sales numbers look like. Lets take the best months and compare straight across. The following numbers reflect homes sold in Salt Lake County.




As you can see here our sales really peaked in 2005 and 2006 with a high of 1953 sales in June of 2005. Since the June numbers are not in for 2008 yet lets look at May across the board. If you were to take May of 2007 and compare it to May of 2008, you could make a really strong case and a very misleading headline that home sales in May were down 65% from last year to this year. However the numbers on this chart are inflated quiet a bit due to the housing boom.

2000-2003 compared to 2008

Comparing 2000-2003 to 2008 will give a better comparison of a normal Real Estate market for Salt Lake County outside of a housing bubble setting.



If we take the same comparison as above you can see that we are getting very close to our 2000, 2001, and 2002 numbers. 2003 inched higher on the verge of the housing boom. While there is no doubt that 2008 has been the worst year on record in the last 8 years, is it really as bad as it looks when compared to more accurate data? In fact if you only take March to April data over the last 8 years we are mirroring 2002 and 2003, some of our healthiest years on record, where Aprils housing numbers increased over March.

The 8 Year Look:

Comparing year over year on the eve of a housing boom and right in the middle of a mortgage crisis can give very entertaining numbers. Remember bad news and wacky news sales. Over the last 2 years I have yet to see one news story that has made these gigantic comparisons with an explanation of what is normal and healthy. It is impossible to determine what a normal market is on such a small scale, specifically year over year. So lets see how we are doing since the start of the century:



Looking at this graph you can clearly see the housing boom. I urge you to print this off, take out a pen, and draw a line from May of 2000 to May of 2008 to get a more accurate feel of where our market currently is. I am sure you will see that our market is making a strong push back to a healthy, "Normal", market.

June is already looking good:

The numbers for June are not in yet but the mortgage and real estate professionals I have spoken with are busy right now working with buyers and new borrowers. My prediction is that June will stun us all pushing numbers well beyond 1100 homes sold in June. May's numbers have already told me that the decline is over and the numbers are beginning to level off. I believe June will only further make make this case. We live in a conservative state, our housing boom was conservative, and our decline in home sales was small compared to the rest of the nation. We have made it through the "housing crisis". Pat yourselves on the back and get ready for another 8 great years of steady economic growth in the state of Utah.

Avoiding Forclosure and What to do if it's close

The Number of Foreclosures have doubled!

Many of you have heard the statistic that the amount of foreclosures have doubled. This is correct we have gone from 1% of all home owners with a mortgage losing their home to foreclosure up to 2%. The good news here is that 98% of all home owners with a mortgage are not losing their homes. 7% of all U.S. mortgages are sub prime mortgages and those mortgages make up 42% of the foreclosures. Almost half. If you take away the sub prime mortgages then foreclosures would be up just over 1%. The bottom line here is that if you have a sub prime mortgage with an arm that is set to reset to a higher interest rate, if you bought more home than you can afford, or if some life altering event has occurred you face a legitimate danger of foreclosure.

Before the Foreclosure:

If you begin to have trouble making your payments the first thing that will arrive in your mailbox will be a a letter from your loan servicing company reminding you that your payment is past due and usually indicating the actions they can and will take to remedy the situation. Ideally if you think you are going to get to a point where you will miss a mortgage payment or your payment is going to adjust above what you can afford, you should look to get help before going 30 days behind on your mortgage. 30 days late is the magic number that will appear on your credit report. A mortgage late can seriously hinder your chances of refinancing out of this bad loan. You still have several options at this point and will want to speak with someone who has your interests in mind and will work with you to find the best possible solution. Please see the next section as it is very important that you recognize and avoid the "Save you from foreclosure" scams.

Once you Receive a Notice of Default:

If it's too late for you and you have fallen several payments behind you will receive a notice of default from the loan servicing company. Sadly this information is public knowledge readily available at most title companies. Your credit will be scarred and you will be in serious jeopardy of losing your home. On top of this many people will begin to contact you about "saving you from foreclosure" and you may even begin to notice the foreclosure help signs on the side of the road or even vehicles. If you are in this boat you NEED to be aware that you have options and steer clear of the foreclosure help scams. Some companies will offer to buy your home and rent it back to you letting the rent go toward the principal and preserving your equity. Others will offer a counseling service and offer a fee. Many will have you sign a "new loan" form and most will require you sign over the title. These programs are bad and clearly designed to prey on your bad situation. The BEST thing to do is to speak with someone you can trust to point you in the right direction.

The Options:

Speaking with someone who understands all the options available in pre-and post foreclosure is the single most important thing you can do to get back on track. In many cases a government secured refinance program called FHASecure can help you refinance to a low fixed rate saving you from getting into the mess in the first place. In other cases aggressively pricing your home and selling it is the best plan of action. If you have fallen severely behind but foreclosure has not started yet one option that may fit your needs is working with a Realtor® on a "Short Sale". This is a process where you and your Realtor® work directly with the bank to allow a sale price of your home that is less than what you actually owe. In any of these cases I would recommend working with someone with experience in the area as it is not a cut and dry solution and what may be the best option for 1 is not the best interest of another.
How To Determine YOUR Best Option:

Determining the right long term solution for you requires an in depth look at your overall situation and your long term goals. If you fear you might not be able to make your payments soon, if you are in an arm that is going to reset, if you have a pre-payment penalty, if you are behind on your payments, or if foreclosure has started, contact me right away and I can get you in contact with the right person for your situation. No I do not charge a consultation fee and no I do not want you to sign over the title. I am a Realtor® and a homeowner just like you and I know how confusing it can be to tell the difference between a helping hand and a shady dealer in times of desperation. It's not too late you DO have options. You may call me directly @ (801) 330-3963 send an e-mail to Dave@ListedInUtah.com or simply use the Messenger box on the sidebar of this page to contact me anonymously.