One of the greatest resources I have at my disposal for predicting where prices are going to go or stay for the St George Utah real estate market, goes off Supply and Demand. It is not always the case that when supply goes down demand goes up. But it is a pretty safe bet. That is what we have as a dynamic in the market place right now. And when interest rates have not crept up like they are projected to eventually, lower interest rates can also lead to more buyer demand as well.
Here in the Greater St George Utah area I have pulled inventory levels for homes and condo/townhouses all up to about the 250 thousand price-point and have seen how inventory levels are about one third down from where they typically are. This is fairly significant. As such it warranted a market update to let buyers and sellers here in the area know.
Inventory Levels Indicated by Bars
Basically we have more buyers competing to buy the existing inventory perhaps as a result of it shrinking. Sellers can hold out for their little higher price with less difficulty for doing so. I’m projecting that some sellers may benefit with a little 5K difference in price of what they can get for their homes over and above what we would have thought about inventory levels rebounding a little after spring and summer months.
Should buyers take a break and wait till winter has past or for a while, until inventory levels re-establish themselves? That is a good question. For most buyers I’d say no, because it is what it is and it might persist after all. Thus, the variable affecting picking up a “good deal” may have not changed, you have to be a little more astute and persistent is all and maybe less frequent… but lucky as well. The deals can still be had. Most sellers and Realtors understand that the market tends to “right” itself such that a seller cannot get too greedy. The comp base of what has been sold does not lie, it is about what things are worth and there are no “sky rockets” in there.
However, for some buyers that have time, I’d suggest a twofold approach. Utilize winter months, which allow for some staved off buyer demand to see if you can compete with less buyers to make your purchase happen. Secondly, if it does not present then… then when in the Spring months the builders of new construction have possibly over-corrected for the shortage of supply they had last year, you can act with more plentiful inventory levels. This is theoretical, a tougher market on the builders with more price competition because supplies are higher OR the higher inventory levels in the resale market (works in tandem). Then you could seize your resale or new construction opportunity at any point, during Spring or into Summer- the time when builders all know it slows down for them NORMALLY (not this year, maybe next summer to fall if demand lets up). Remember, remember this is no crystal ball, St George is too hot a location, that other factors coming from demand from reallocates could change everything and inventory levels could remain lower.
Another variable is this as a buyer: If prices are appreciating in my estimations of about 3 to 5% a year, it won’t matter to hold and buy then if prices are going up anyway. Investors [and maybe other buyers] often pass up good investments and just take too long to buy something decent. If it takes them more than 6 months to a year, the deal they might have been looking for is past anyway, relatively speaking.
For sellers, I’ve often seen them think winter months are not the best, when if all the sellers pull off the market, it can sometimes, nay often, mean a very good time to sell with the less competition on there.
I hope this market update has helped you to see some variables currently happening in our Greater St George Utah real estate market, helping to inform your ever important decisions involving one of the greatest investments of your lives, your home/condo/townhome.
If you or anyone else you knows ever needs the help of a real estate professional- I’m at your disposal, so please don’t ever hesitate to click on Contact Us to get me now or to forward the contact of somebody you know. Thank you! ~ Brian Habel with HomeSmart Advantage at www.st-george-realestate.com.