Archive for the ‘Salt Lake City condos’ Category

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Buy a Salt Lake City Condo with 5% down Conventional financing

Tuesday, January 11th, 2011

I spoke to my favorite lender this morning and he informed me that he can now offer Conventional financing for condominiums with just a 5% down payment.  The lowest down payment last year for Conventional condo financing was 10% down.  You can get 3.5% down condo financing with an FHA loan, but the condo project has to be on FHA approved list of condos, which is limitted.

This is great for condo buyers and I also think it’s a good sign that lenders are loosening up a little bit.  Since mid 2007, financing for homes and condos has tightened up with lenders less willing to take risk.  This has led to higher down payments, higher credit requirements and fewer loan programs.  5% down payment convnetional loans for condos is a small step in the other direction.

Kevin Coyle
MBA  Principal Broker
SLC Homes
801-243-0699
Kevin@SLCHomeBuyer.com

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Posted in FHA Loans, Salt Lake City condos, Salt Lake County homes and condos, Utah Condos | No Comments »

Good News for Salt Lake City home buyers!

Tuesday, May 25th, 2010

I just read two articles about Salt Lake City as a place to live and Salt Lake City foreclosed homes.

According to the Salt Lake Tribune and Realty Trac, the number of home foreclosures in Salt Lake City is at it’s highest levels since the beginning of our downward trending real estate market.  Sounds like doom and gloom, but not if you’re renting and thinking about buying.

The second article came from Portfolio.com which ranked Salt Lake City #5 out of 67 cities for quality of life.  Two key factors they used to determine this ranking were that “No market has a lower jobless rate for workers between the ages of 25 and 64 than Salt Lake City and only Washington has a larger share of homes with at least nine rooms.  One-fifth of Salt Lake City’s houses are that size.”

Our unemployment is low, you get a lot of home for the money and our foreclosures are at an all time high.  Our quality of life is great here, I wouldn’t live anywhere else!  And again, as I mentioned last week, interest rates are very low.

It’s a great time to buy Salt Lake City homes and condos!  Representing SLC Home Buyers is what I do best.  Let me know if I can help you.

Sincerely,

Kevin Coyle
MBA, Associate Broker
Kevin@SLCHomeBuyer.com
801-243-0699 (Cel)
SLCHomes Real Estate

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Posted in Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate | No Comments »

Interest rates on mortgages remain stable in April 2010. Good news for buyers of Salt Lake City homes and condos!

Tuesday, April 27th, 2010

At the end of March 2010, the Federal Reserve ended their policy of buying mortgage backed securities to keep mortgage rates low.  I blogged about this on  March 29, 2010.  So far, this change in policy doesn’t appear to have affected interest rates.  Rates are still in the low 5% range for a 30 year fixed rate mortgage which is about where they were in March.

If interest rates start to climb, that would decrease the buying power for buyers of Salt Lake City homes and condos.  Let’s hope these low rates continue!

Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

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Posted in Interest Rates, Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate | No Comments »

More on financing Salt Lake City Condos

Thursday, March 11th, 2010

After writing last weeks Blog entry, I started wondering what percentage of Salt Lake condos actually sold FHA in the last 6 months.  So I went to the Wasatch Front MLS and did a little research.  I chose to evaluate three areas and price ranges.

Area and price range 1 is Salt Lake City, all prices, because SLC has the highest density of condos in the area.  I did a search for condos sold from Gateway to 700 East and from South Temple down to 600 South in all price ranges.

Area and price range 2 was Salt Lake County under $250,000

Area and price range 3 is Salt Lake County above $250,000

Area 1 Salt Lake City all prices:

In the last 6 months, 137 downtown Salt Lake City condos sold and I have listed the way they were financed below:

42% Conventional Loans (57 condos)
29% FHA Loans (40 condos)
27% Cash (37 condos)
2% Other (3 condos)

29% of these condos sold with an FHA loan.  This is a substantial amount and if FHA condo financing was eliminated, this would be bad, but FHA loans for condos aren’t going away, they only eliminated spot check approvals for non-FHA approved condos.  So there will still be a percentage of condos that will be financed with FHA loans, it’ll just be a smaller percentage.  So downtown Salt Lake City looks better than I thought it would.

Area 2, Salt Lake County under $250,000:

In the last 6 months, 913 Salt Lake County condos under $250,000 sold and I have listed the way they were financed below:

25% Conventional Loans (226 condos)
60% FHA Loans (545 condos)
11% Cash (100 condos)
4% Other (42 condos)

60% had FHA financing.  This is significant!  Due to this high percentage, if I was buying a condo in suburban Salt Lake County outside of downtown Salt Lake City under $250,000, I’d be buying one that is in an FHA approved condo complex, even if I wasn’t doing an FHA loan.  I think I’d look at single family homes too.

Area 3: Salt Lake County over $250,000:

In the last 6 months, 85 condos sold and I have listed the way they were financed below:

55% Conventional Loans (47 condos)
15% FHA Loans (13 condos)
25% Cash (21 condos)
5% Other (4 condos)

Here only 15% of condos in Salt Lake County over $250,000 sold with an FHA loan.  This is probably due to the fact that condos over $250,000 aren’t typically bought by first time buyers and therefore the buyers have more of a down payment.  This looks pretty good.

If a condominium project wants to be FHA approved, they can fill out the paper work and try to get FHA approval.  The process takes at least 60 days and can take longer.  Applying doesn’t guarantee approval either.

So it appears that the elimination of spot approvals for FHA condo loans will have the greatest effect on suburban Salt Lake County condos outside of downtown Salt Lake City, under $250,000.  As you can see from the numbers, there are a lot of condos effected by this.

If I was buying a suburban Salt Lake County condo under $250,000, I would buy one in an FHA approved complex even if I wasn’t doing an FHA loan.  Until there are low down payment Conventional loans for condos or FHA reinstates spot approvals, non-FHA condos under $250,000 in our area will be hard to sell.

The Salt Lake City real estate market is constantly changing and having an experienced Realtor to be your guide can make your home search a lot more enjoyable.  If you need help with the purchase of a Salt Lake City home, condo or duplex, contact me.  I’ve been a Salt Lake City Realtor since 1999 and over the last year, 80% of my clients were buyers!

Kevin
Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

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Posted in FHA Loans, Kevin Coyle, Salt Lake City condos, Salt Lake City real estate, Utah Condos | No Comments »

Salt Lake City condos harder to finance due to elimnation of spot approvals on FHA loans

Tuesday, March 2nd, 2010

FHA loans have been the recent choice for low down payment residential buyers offering loan programs that require just 3.5% down.  Recently FHA decided that they will only lend on condos that are on the FHA approved condo list.  FHA use to allow for spot approvals if a condo was not on the list and this policy changed in February 2010.

So now buyers of condos not on the FHA approved list will need to go with a conventional loan and unfortunately that means a bigger down payment and higher credit requirements.  I’ve checked with lenders I frequently work with and 10% down is a possibility if you have really good credit, but it’s not easy to find and many lender require 20% down for a Conventional condo loan.

This will decrease the number of buyers for condos in projects that are not FHA approved which will most likely effect values in these condo projects.  FHA approved condos may end up actually benefiting from this and there may be more demand for inexpensive single family homes too, but that’s yet to be seen.

The Salt Lake City real estate market is constantly changing.  If you need help with the purchase of a Salt Lake City home, condo or duplex, contact me.  I’ve been a local Realtor for 10 plus years and over the last year, 80% of my client have been buyers.

Kevin
Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

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Posted in FHA Loans, Salt Lake City condos, Salt Lake City real estate, Utah Condos | No Comments »

Salt Lake City Condos: Which SLC Condos are on the FHA Approved Condo list and why is this so important?

Friday, December 11th, 2009

Because of FHA we still have low down payment options, 3.5% down, for the purchase of owner occupied homes and condos in Salt Lake City and across the nation.  There has always been a list of condominium projects that were FHA approved and if the condo you wanted to buy was not in an FHA approved condo project, FHA would allow spot approvals, but that’s about to change. 

 

Spot approval will be eliminated February 1, 2010.  Now the only way to buy a condo with an FHA loan, is if it’s on the FHA approved condo list.

 

 

Low down payment owner occupied Conventional Loans require at least 10% down and good credit.  With FHA, you can buy that condo with 3.5% down if it’s on the approved list and meets the other FHA requirements.

 

  

So is the condo you want to buy on the FHA approved condo list?  Here’s a link to the list:

 

https://entp.hud.gov/idapp/html/condlook.cfm

 

The Salt Lake City real estate market is constantly changing.  Having an experienced Salt Lake City Realtor to be your guide can make your home search a lot more enjoyable.  If you need help with the purchase of a home, condo or duplex, contact me.  I’ve been a Salt Lake City Realtor since 1999 and over the last year, 80% of my clients have been buyers.
Helping Salt Lake home buyers is my thing, so send me an email or give me a ring!

Kevin

Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

 

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Posted in FHA Loans, Salt Lake City condos, Salt Lake City real estate, Utah Condos | No Comments »

Salt Lake City condos: New FHA Financing requirements for condos go into affect November 2, 2009.

Tuesday, October 6th, 2009

FHA has delayed the changes to the requirements for financing condos out to November 2, 2009.  The date was October 1, 2009.

This will still likely have a negative effect on the value of Salt Lake City Condos, but some condo projects will be effected more than others.

I recently put a value on a condomimium in an upscale condo project where units are selling for $250,000 to $325,000 and noticed that all of the units that sold in that complex this year were purchased with conventional financing.  It seems like a unit in that complex would be effected less by these changes.

Time will tell how the value of Salt Lake City condos are effected by these changes.  Some projects will be effected more than others.

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Salt Lake City condos: New FHA Financing requirements for condos go into affect October 1, 2009. What are they and how will they affect the value of Salt Lake City condos?

Wednesday, September 9th, 2009

Starting October 1, 2009, HUD has new rules for FHA loans that will change the playing field for condo buyers, sellers and builders.  I just read the letter from HUD to FHA lenders and appraisers (MORTGAGEE LETTER 2009-19) along with some blogs on how this will affect the condo market.

 

The reason this is such a big deal is that right now an FHA loan is the only way to buy a Salt Lake City condo or home with a low down payment of 3.5%.

 

Here’s an overview of some of the requirements that a condo project will require to be eligible for FHA financing starting October 1, 2009.  I’ve made a few comments:

 

1.     At least 50% of the total units must be sold prior to endorsement of any FHA mortgage on a unit.  This will affect new construction!

2.     At least 50% of the units must be owner-occupied or sold to owners who intend to occupy the units.  There have always been owner-occupied rules for FHA.

3.     Projects of four or more units will have no more than 30% of total units insured by FHA.  Projects with three or less units will have no more than one FHA insured unit.  This is a big change!

4.     No more than 15% of total units can be in arrears (more than 30 days past due) of their condominium association fee payment.  Seems to make sense to me.

5.     No more than 25% of property’s total floor area can be used for commercial purposes.

6.     One investor may own no more than 10% of units.  This applies to developers/builders that rent vacant and unsold units.  This makes sense.

7.     For two and three unit projects, no single entity may own more than one unit; all units and common areas must be 100% complete; and only one unit can be conveyed to non-owner occupants.

8.     A current reserve study must be performed to assure that adequate funds are available for the funding of capital expenditures and maintenance.  A current study must be no more than 12 months old—if recent events or market conditions have affected the finished condition of the property that information must be included.  When reviewing the study, consideration must be given to items that have been replaced after the time that the reserve study was completed.  This makes sense to me.  Why should we lend money to buy condos in a condo project that isn’t properly managed?

9.     No more FHA Spot approval on individual condo units in non-FHA approved projects.  The project is either FHA approved or it’s not.  Seems like this is a safe approach for a big organization like HUD.

 

These new rules will most likely have a short term negative effect on the value of Salt Lake City condos and condos across our nation. 

 

 

New construction condos will be affected the most because 50% of the units will need to be sold before the condo project could become eligible for FHA financing.

 

Builders will need to make sure they have a way to finance the first 50% of the condo units they sell.  The builders will need to go out and find financing for their units and then once the units are half sold, FHA financing becomes available if they are approved.  This puts a lot more risk on the builders and their lenders and less on FHA/HUD.

 

These new rules will likely reduce the number of risky condo projects and the overall number of new condo projects being built.  Long term, condo inventories will decrease which should push values up.

 

Also, if you can’t buy a condo, you can still buy a single family home with an FHA loan.  Short term this could have a positive effect on the value of single family homes in Salt Lake City because more people will buy homes instead of condos.

 

During the last housing boom in Salt Lake City, 2005-2007, the value of homes out paced condos until the gap was big enough to pull condos up.  The same thing could happen again.

 

So short term the FHA loan changes for condos will probably have a negative effect on values, but long term this will probably lead to decreasing condo inventory which could have a positive affect on the value of existing condos.

 

This also could result in new loan products for condos with low down payments.  Also, FHA may modify these new rules as they see how it affects the condo market.  Rules can be changed.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’ve been a Salt Lake City realtor for over 10 years and this year 85% of my clients have been Buyers of homes and condos in Salt Lake.

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Posted in FHA Loans, Salt Lake City condos, Salt Lake City real estate, Salt Lake County homes and condos, Utah Homes | No Comments »

Salt Lake City homes and condos: Great Interest rates, Tax Credits for first time home buyers, Great Deals and Many Salt Lake City homes to choose from!

Friday, August 28th, 2009

So far this year, 85% of the clients I have worked with, have been Buyers.

 

All of them learned the market and then found the home or condo that they were looking for in the area that they wanted to live.  A couple of the Salt Lake homes and condos were unique properties that are hard to come by.

 

All of the clients got a fair deal on the home they chose.  A few of the clients got a great deal and went into their new Salt Lake home or condo with instant equity.  One client in particular went in with 20% equity if you compare the purchase price to appraisal.  Those deals aren’t easy to come by, especially on a dream home like this client bought.

 

All of the clients got an amazing interest rate.  Rates have been between 4.5% and 5.5% for most of the year.

 

All of the first time home buyers are getting a tax credit of $8,000.

 

History shows that the price of Salt Lake real estate goes up and down.  We’ve been going down for over 2 years now and eventually it will go back up.

 

History also shows that interest rates go up and down and right now they are very low.

 

One last thing I want to mention.  I was in a seminar last week and one of the big Utah home builders announced that they are going from 19 housing subdivisions in Utah to 40  by the first quarter of 2010.  They also said they are downsizing their homes, which makes sense.  I asked them who their economist is and they weren’t forthcoming with that information, but it made me think.

 

If you plan on spending the next 5 to 7 years in Salt Lake, you might want to start thinking about buying Salt Lake City real estate while it’s still a Buyer’s market and rates are low. 

 

If you already own a home, the gap in price between the home you own and the home you dream about is smaller than it was a couple years ago.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’ve been a Salt Lake City realtor for over 10 years and the majority of my clients are Buyers of homes and condos in Salt Lake.

 Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Posted in Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate, Salt Lake County homes and condos, Utah Homes | No Comments »

Salt Lake City homes and condos: Find out what areas have the most short sales in Salt Lake County

Wednesday, August 26th, 2009

I was searching for homes today on the Wasatch Front Regional MLS for one of the Buyers I’m working with and noticed a neighborhood that had an extremely high percentage of short sales.  41% of the homes in that neighborhood are short sales.

 

It made me stop and wonder about how many short sales are in other areas of Salt Lake County.  Here are the results of that search which includes Salt Lake County homes and condos in all price ranges.

                                               

City                                                       % short sales of Active listings

Salt Lake Aves/Cap Hill                                           3.9%

Salt Lake Central City/South Salt Lake                  10.6%

Salt Lake East City/Mill Creek                                  5.3%

Salt Lake Rose Park/Glendale                                  24.4%

Holladay/Cottonwood Heights                               10.6%

Murray                                                                         9.8%

Midvale/West Sandy                                                 15.6%

East Sandy                                                                  14.5%

Draper                                                                          23.5%             

West Valley City/Kearns/Magna                             27.4%

West Jordan/South Jordan/Copperton                   24.8%

Riverton/Herriman/Bluffdale                                     31.1%

 

Salt Lake County                                                       18.6%

 

*All data taken from Wasatch Front regional Multiple Listing Service on 8/26/09 on Salt Lake County homes & condos.

 

One thing that intrigued me was the closer you get to downtown Salt Lake City, the fewer short sales there are overall.  Yes, I live downtown, but that’s not why I was so intrigued. 

 

I have a theory.  During our last housing boom in Salt Lake County, 2005-2007, the areas that the majority of the residential new construction homes and condos were built were further away from downtown Salt Lake where the vacant land exists which is on the South and West side of Salt Lake County.

 

By early 2005, the cost of new construction in Salt Lake County was much greater than the cost to buy an existing home of comparable size and location.  This was due to the escalating cost of land, building supplies and a tight labor market.  Also during this time, money was easy to borrow regardless of your credit score so there were plenty of people who could buy.

 

The cost of existing homes in those areas quickly adjusted upward as a result of the increasing cost of new construction creating instant equity for those who bought before 2005.

 

But by 2007 there was 12 months of inventory in new construction, which is primarily located in the South and West part of Salt Lake County.  Then in August 2007 our banking crisis started which led to higher credit standards for home loans and fewer low down payment loan programs.

 

Two things I think happened here are there are many people who bought later in the boom and have now lost their job or had some other hardship.  If they bought with nothing down, and most did, they are upside down on their mortgage.  Short sale! 

 

The other thing I think happened is many people had their home value increase by $50,000 or more in less than a year and took some of their equity out to improve their home, buy toys or pay off other debts. Short sale! 

 

Eventually some of the short sales sell, some owner get loan modifications and some homes go into foreclosure. 

 

There are more theories that can be drawn from the varying percentage of short sales and if you look at smaller areas, some areas are higher and some are lower.

 

This something to consider when buying Salt Lake City homes and condos.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’ve been a Salt Lake City realtor for over 10 years and the majority of my clients are buyers of Salt Lake City homes and condos.

Thanks!

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Posted in Kevin Coyle, Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate, Salt Lake County homes and condos, Short Sales, Utah Homes | No Comments »

Salt Lake City homes and condos: Are residential Short Sales harder to buy than non-short sale homes and condos in Salt Lake County?

Tuesday, August 18th, 2009

It seems like every buyer I meet wants to know about short sales and for good reason, they are a big part of the inventory of homes and condos in Salt Lake.  Most people think short sales are a great deal and some short sales are, but most are a challenge to buy.

 

Over the last few months, short sales on homes and condos in Salt Lake County have been harder to buy than homes and condos that are not short sales.  The table below compares homes and condos in Salt Lake County that are listed on the Wasatch Front Multiple Listing Service.  It shows the number of homes and condos that are Active, Under Contract and Sold in the last 90 days and compares short sales vs. non-short sales.

 

                                                Short Sales                     Non-Short Sales

Listing Status              Volume / % vs. Actives        Vol / % vs. Actives

Active Listings for sale           1,410                                       6,238  

Under Contract                          254 / 18%                             1,408 / 23%

Sold in the last 90 days             329 / 23%                             2,868 / 46%

*Data taken from Wasatch Front regional Multiple Listing Service on 8/18/09 for Salt Lake County homes and condos.

 

As you can see, a much lower percentage of short sales have been successfully sold over the last few months.  There are many reasons for this.

 

One is the length of time that the buyer must wait to buy most short sales.  The Buyer makes an offer to the Seller, a deal is struck and it is submitted to the bank.  A “short sale addendum” is used in the negotiation between Buyer and Seller which gives the lender third party approval.  This is used because the lender and mortgage insurance company have to agree to take a loss.  This is where the process typically slows down.  It can take weeks, months, and sometimes it never happens.  And it can get more complicated if there is a second mortgage.

 

So the Buyer is waiting for a response from the lender.  During this time there is the risk that other offers will be made on the property because it’s a long process. 

 

Some Buyer’s have a time frame in which they hope to move into their new home due to a lease expiring, a new job starting or some other reason.  With a short sale, it’s hard to know how soon you’ll be able to accomplish your move.

 

Finding a home you like is a challenge on its own.  Short sales frequently add to this challenge.  This is something to consider when buying Salt Lake City homes and condos.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’m an experienced Salt Lake City realtor and the majority of my clients are buyers of Salt Lake City homes and condos.

 

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

 

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Posted in Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate, Salt Lake County homes and condos, Short Sales | No Comments »

How to Buy a Salt Lake City Home, Condo or Duplex if you lack the Down Payment and Closing Costs

Thursday, July 23rd, 2009

Just a few years ago there were many ways to buy a Salt Lake City home, condo or duplex with no money down.  You could borrow 100% of the money you needed to purchase the home.  At that time, the market was going up and lenders were loose with their money.  Times changed quickly and those home loans are gone.

 

So how do you buy a Salt Lake City home, condo or duplex if you lack the down payment and closing costs?

 

FHA loans only require 3.5% down for the purchase a home, condo or duplex as long as the buyer intends to move in and occupy the home as their primary residence.

 

FHA also allows for a family member to gift all or part of the down payment and closing costs.  So if your mom, dad, grandpa, grandma or other family members are doing well, they can give you a gift for all or part of the down payment and closing cost for the purchase of your Salt Lake City home, condo or duplex.  It has to be a gift, not a loan.

 

Also, if you don’t have the closing costs, they are frequently negotiated into the deal so that the Seller pays all or part of the Buyer’s closing costs.

 

Regarding Salt Lake City condos, the condo project must be FHA approved to qualify for an FHA loan.  FHA might do a spot approval if the condo is not FHA approved, but that isn’t a sure thing.

 

And I mention again, the buyer must move into the home and occupy the property as their primary residence.  If you’re an investor breaking the rules and get caught, FHA will call the loan due and mess up your life, so please don’t do that.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’m an experienced Salt Lake City realtor and the majority of my clients are buyers of Salt Lake City homes and condos.

 

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Posted in FHA Loans, Kevin Coyle, Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate | 2 Comments »

Business Week article (6/18/09) on Salt Lake City Real Estate and Housing Market

Sunday, July 5th, 2009

This is a reprint of the Business Week article which I contributed too.  Young Buyers June 18, 2009, 5:00PM EST

Salt Lake City: A Still-Hot Housing Market

Millennials, their baby-boomer parents, and even retirees are keeping demand—and prices—high

Salt Lake City is one of the fastest-growing metropolitan areas in the country. But unlike other booming locales, Salt Lake has a largely homegrown citizenry—locals account for 88% of population growth. “Salt Lake City has a high rate of natural increases,” says Robert E. Lang, director of urban affairs and planning at Virginia Polytechnic Institute. “It’s a big family-friendly kind of place.”

The result is that Salt Lake City has a large and expanding pool of ready home buyers: Millennials, the generation born from the early 1980s to the ’90s. Utah, where the Salt Lake environs account for the bulk of the state’s residents, is the country’s youngest state, with a median age of 28.7 years, compared with 35.3 years for the country as a whole. Raleigh, San Antonio, and Colorado Springs also have youthful populations, whereas states such as Iowa, North Dakota, and Pennsylvania are aging fast.

The Millennials, aka Generation Y, will be one of the most powerful demographic forces to enter the housing market in the years to come. By some estimates, they’re expected to account for a third of all home buyers by 2015. They’re already out in droves, taking advantage of the $8,000 federal tax credit for first-time home buyers. “A huge cohort of first-time buyers will be in the market in the next five years,” says David W. Berson, chief economist at PMI Group (PMI), a company that covers banks against borrower default.

Gen Y buyers already have helped prop up the housing market in Salt Lake City. Home prices rose 51% from 2003 through 2008, compared with a roughly 2% drop for the U.S. as a whole. The young buyers’ impact is reflected, in part, in the type of sales: The low end of the market, say local real estate agents, accounts for much of the activity, while some multimillion-dollar homes have been sitting vacant for more than a year. Many properties “weren’t available to first-time home buyers a year ago,” says Kevin Coyle of SLCHomes Real Estate in Salt Lake. “With the downturn, they can now get something they can afford.”

When Gen Yers James and Carleigh Naylor got married last October, the couple moved into a dingy basement apartment they rented from an elderly man who lived upstairs. “It wasn’t glamorous,” says 24-year-old James, who works as a cabinet maker at his father’s shop. Earlier this year the young couple decided to buy their first home, a two-bedroom, one-bath on a cul-de-sac on the south side of town. They beat out six offers with a bid of $137,000—still well below the $230,000 median home price in Salt Lake.

Like many first-time buyers, the Naylors are tapping the new government programs designed to spur home sales. Along with the tax credit, they qualified for a federally backed mortgage, which requires less money up front. And a gift from relatives covered their closing costs and down payment. Says James: “We’re hoping to use this house as a stepping stone to get us into the next house three or five years from now.”

Salt Lake City, Utah

In a state where the median age is 28.7 years, Gen Y’s first-time buyers are propping up the home market

POPULATION

1,067,722

2007 MEDIAN HOME PRICE

$238,020

2008 MEDIAN HOME PRICE

$230,000

Numbers reflect metropolitan area; Data: Fiserv

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Business Week interviews Kevin Coyle about Salt Lake City real estate market

Tuesday, June 23rd, 2009

A few weeks ago I was contacted by a writer for Business Week magazine.  She found me on the internet through my web site, www.SLCHomeBuyer.com.

She interviewed me about the Salt Lake City real estate market and also interviewed one of the first time home buyers I’m working with that had just closed on their first home.  The article talks about the Salt Lake City real estate market and Generation Y first time home buyers.  We are a young state and the outlook is positive! 

Check it out!

 http://www.businessweek.com/magazine/content/09_26/b4137035256318.htm

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’m an experienced Salt Lake City realtor and the majority of my clients are buyers of Salt Lake City homes and condos.

 

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Salt Lake City homes and condos: Supply and Demand

Thursday, June 11th, 2009

Many Salt Lake City home buyers focus on price per square feet as an indicator of how good a deal they are getting.  This is one factor to consider, but there are many other factors like condition, location, commute, schools and the potential for appreciation.  Today we’ll look at potential for appreciation as it relates to supply and demand.

 

It’s hard to know for sure how good of an investment a specific Salt Lake home or condo will be or what the demand will be for it in the future, but you can look at what the current supply and demand is if you’re working with a Salt Lake City Realtor who has access to that information.  It’s a key factor to consider, because supply and demand affects price and appreciation over the long term.

 

To make this comparison we will compare two fantasy condo complexes and the number of units in each that are for sale, under contract and sold in the last 3 months.  From this information we’ll determine how many months it will take to sell all the units in each condo compelx.

 

Primo Condos             OK Condos

Active (units for sale)                                              6 units                      12 units

Under Contract (accepted offer, not closed)         1 unit                          0 units

Sold in the last 3 months                                          3 units                        1 unit

Time to sell current inventory (months)                6 months                  36 months

 

Right now, the OK condos have high condo supply and low buyer demand.  If the supply is high and the demand is low, eventually prices will need to drop to attract more condo buyers.  At some lower price, the OK condos will sell faster, but for now there is 36 months of inventory with only 1 condo unit selling every 3 months.  There is a good chance that the prices will decrease down due to the high inventory in the OK Condos.

 

There is clearly more demand for the Primo condos with 1 selling per month and only 6 months of inventory.  If this trend continues, the prices in the Primo Condos would outperform the prices in the OK Condos.

 

If you were a Salt Lake City condo buyer and you were interested in buying a unit in either the Primo Condos or the OK Condos, all other things equal, it would most likely be a better investment to buy a unit in the Primo Condos.

 

This is one key factor that most of the buyers I work with consider when they work with me to find their Salt Lake City home or condo.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’m an experienced Salt Lake City realtor and the majority of my clients are buyers of Salt Lake City homes and condos.

 

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

 

Further explanation and notes on the examples given above:

 

The Math for the OK Condos: There are 12 units for sale. If 1 sells every 3 months, 4 will sell in a year and it will take 36 months (3 years) to sell all 12 units.

 

The Math for the Primo Condos: There are 6 units for sale. If 3 sell every 3 months, that’s 1 unit sold per month, so in 6 months they would all sell.

 

This example is like looking at a snap shot, a moment in time for sake of comparison and is only one factor to consider when buying Salt Lake City homes and condos.  Also, it’s not a guarantee of price appreciation.

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