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Washington County New Home Construction: Heading for BOOM or BUST?
Welcome! Today on GoStGeorgeTV I’ve got my hard hat on because:
- We’re going to be talking about the recent construction boom here in Washington County.
- And I believe (obviously) in a “Safety First” philosophy.
I will walk you through this subject and let you know what to expect in the near future as a result of this rise in home construction
So, who is building all these homes? As of May, the top Builders shook up as follows:
- Salisbury Homes is the leader pulling 41 building permits totaling 7 million dollars.
- Henry Walker Homes – 34 permits
- Ence Homes – 30 permits
- Sunriver St. George – 19 permits
- And New Trend Construction pulled 15 permits as of the date of this video.
What people really want to know is if this BOOM is going to BUST, and after the events of the most recent economic meltdown, it’s a valid question! Here are my thoughts:
No, this building boom is not out of control. Note that the total # of building permits pulled in 2013, (1600), is less than HALF of the total # pulled in the “Boom” of 2005 when a whopping 3500 permits were pulled. As a matter of fact, in 2009 85% fewer permits were pulled than 2005, that’s almost a 100% decrease! This is a healthy return to the construction industry based on cooped up demand for new homes.
The real question here is can this level of construction be sustained?
- While I do not believe that we will have a big home construction decline, I predict that 6 months from now there will be quite a few builders who will regret building those last few spec homes, left holding the proverbial “bag”.
- This will likely result in having to sell those homes for a lower price than they had hoped.
- I also predict that the building market will slow down soon due to a decline in housing affordability. NOTE – I did NOT say that the entire market will necessarily slow down, simply that the dramatic increases in new construction costs will price Buyers out of NEW HOMES.
If you have any more questions, feel free to call or e-mail us with anything Also, don’t forget to utilize our FREE MLS home search and home value report links on our website. And our full, detailed St. George Real Estate report is always available 24/7 so you can be the smartest kid on the block! Check it out here: St. George, Utah Real Estate Report
Our contact info once again, (435) 215-4333 or email us: larkingroup@gostgeorge.com.
St. George Real Estate Market Update
For this month’s Real Estate Report, home sales both nationally and for Washington County are down from last year. To be specific, residential sales in Washington County were off by over 10% from the first quarter of 2013…but don’t panic just yet! There’s actually a silver lining here.
WHY are home sales down?
- One factor is the continuous decline of foreclosures and short sales and in turn, this has left fewer homes available for the long-term. That is good news!
- Washington County home values have COME UP nearly 20% since 2011…also great news! But because they’re up, some Buyers are getting priced out of the market, which in turn slows the total # of sales down. But it’s healthy for the market as it prevents another outlandish housing bubble like 2005. And Washington County cannot face another housing bubble – it’s unacceptable! The decline in home sales year-over-year is actually a sign of a healthy, self-balancing real estate market!
Are 4.2 million buyers about to purchase real estate?
However the big question is what’s next. After doing some research, I found the following:
- In 19 of the top 20 major metropolitan areas nationwide, more than 5% of all residents planned to buy within the next year.
- 10% of renters nationwide (yes that’s HUGE) said they would like to buy in the next 12 months.
- If every one of those people surveyed actually did purchase a home, it would represent 4.2 million first-time buyers. More than DOUBLE the 2.1 million first-time Home Buyers in 2013!
Yes, it’s crazy when you really think about the possibilities. Even MORE WILD? That 57% of Baby Boomers want to sell the home they currently own, which means they would replace it with another, and 25% say they’d like to purchase a 2nd home. There is going to be a lot of activity ahead for the market!
If you have any more questions, feel free to call or e-mail us with anything Also, don’t forget to utilize our FREE MLS home search and home value report links on our website. And our full, detailed St. George Real Estate report is always available 24/7 so you can be the smartest kid on the block! Check it out here: St. George, Utah Real Estate Report
Today, on GoStGeorgeTV, we’re going to answer the question: “Can I trust the Zillow home price estimate?”
Zillow has become a wildly popular online tool to get a quick estimated value of home values. We estimate that eight out of ten Sellers we work with first go to Zillow to get an initial estimate for their home. With so many users, so many millions of homes, and having those homes spread across the entire United States, is it possible that the site could have inaccurate estimates? We’ll take a look at the three traditional values for a home and compare them with the Zillow value.
1. The first value is the assessed value. This is the value that the Washington County assessor uses to determine how to tax your property. The assessed value typically falls on the low-side of a home’s market value. Not always, but most often. This value actually has little to do with your home’s true value.
2. The second value is the appraised value. This value is based on the opinion of a qualified appraiser who will come out to inspect your home and establish a very analytical and scientific estimation. This value is often established during the mortgage origination process, but may be updated as the home undergoes renovations. While this value may not reflect “true” market value, it’s still incredibly important as it has the potential to make, or break, a real estate transaction.
3. The third value is the market value. Definition: What a Buyer is actually willing to pay for your property! The market value is the most fluid value because it is dependent on the state of the current real estate market. The market value is what the buyer is willing to pay for your home. Everything else is, quite frankly, quite irrelevant.
These three traditional values are well established in the real estate realm. Recently, the “Zillow value”, or just about any other FREE online home value estimate, have emerged as a fourth value. Zillow, and these other systems, are what is called an “automated valuation model” that takes neighborhood statistics and tax data to determine a value of your home. Because Utah is a “non-disclosure state”, sales prices are NOT available to a company like Zillow.
And because they lack that actual sold data, it’s highly likely that using Zillow as your guide will cause you to either, A. Overprice your home and sit for MONTHS, or..B – underprice your home and leave money on the table…yikes! I encourage you NOT to trust it as a tool to estimate your home’s value. If you want to play around with it, go for it! As a matter of fact, here’s OUR “AVM” (automated valuation model) site, feel free to play around there! www.DixieHomeValue.com
Now, if you are looking for an accurate assessment of your home, I encourage you to reach out to credible real estate professional to receive the most accurate pricing of your home.
If you have any more questions, feel free to call or e-mail us with anything Also, don’t forget to utilize our FREE MLS home search and home value report links on our website. And our full, detailed St. George Real Estate report is always available 24/7 so you can be the smartest kid on the block! Check it out here: St. George, Utah Real Estate Report
