So, why all the fuss regarding the St George real estate market being in a sad shape? Is it not just relative?& After all, if you are a buyer, this is a great market! So, is this a good or bad market here in St George? If you are a seller it is really lousy. Ever since the housing bubble has been popped, it has been assumed in the media and everywhere that the real estate market is not good. But then again, if you are a buyer, lower interest rates and lower prices are a great thing.
From what I've been able to gather, here is at least a partial answer toward confirming it as being in sad shape overall. First and foremost, St George has been hit with a huge fluctuation of increased values of about 50% over the course of 2004 to 2005. Then what went up, did come back down here and hard. The result is very cautious buyer responses and confidence is stifled as to what can and/or will happen into the future.
The St George Real Estate market is affected mostly by its economic base, retirees, its community values people base of friendly people, its convenient location being geographically positioned in mid-way stopping points for accessing family relatives, its tourism, and its scenary and national or state park like settings. We explore these and other variables in more depth at our St George Real Estate Market Influences page.
In normal markets housing values should have a corollary relationship with new construction prices being somewhat comparable. New construction values are set by the price of land, materials that go into that home, the labor to put it up and the desirability of the location; nothing more and nothing less. When pretty much everywhere, these new construction materials or commodities prices are way above where home values currently are, then one would think that eventually, for expansion to be able to take place, home prices would need to come up to where the prices of products are, that go into making up those homes. Besides, low demand has reset prices as low as they can possibly be perhaps. Right now, it appears that St George new construction and housing starts are still low and that home prices stabilizing to new construction prices, have not taken place. In other words, we are out of balance or their is "a disturbance in the force" as prices of homes should match the commodities market. This disturbance can be especially felt by owners of St George distressed properties.