Monthly Archives: March 2017

2016 Utah home sales highest on record

Utah Home Sales
With nearly 50,000 in sales in 2016, the Utah housing marketing continues to break annual sales records.

Utah’s booming economy, high job growth and low interest rates led the state to a record-breaking year for home sales in 2016. Statewide, Utah Realtors sold 49,399 homes, townhomes and condominiums — the most transactions ever in a single year and more than 800 sales higher than 2015.

That’s according to the newly released December 2016 housing market report from the Utah Association of Realtors.

For a decade, 2005 held the statewide record for the most homes sold in a year at 47,987 sales. Realtors crushed that record in 2015 as Utah’s housing market came roaring back. The momentum continued in 2016 with sales nearly 2 percent higher than the 2015 tally.

“Huge demand from buyers combined with low interest rates created incredibly high housing activity,” said DeAnna Dipo, 2017 president of the Utah Association of Realtors. “While that momentum could lose some steam because of increases in home prices and interest rates, markets are still hot. Even in January, which is the slowest month of the year for home sales, we’ve seen bidding wars for properties.”

In counties with more than 200 sales, the areas with the largest sales gains in 2016 were Wasatch County (up 16 percent), Sevier County (up 11 percent) and Washington County (up 9 percent).

With the high demand, home prices headed up in 2016. At $246,000, the Utah median sales price rose nearly 8 percent from 2015. Prices increased nearly $18,000 during the year. December marked the 57th consecutive month of year-over-year gains.

In counties with more than 200 sales, prices increased the most in Summit County (up 19 percent), Sevier County (up 15 percent) and Wasatch County (up 12 percent).

Utah housing inventory remained at very low levels. As of Dec. 31, 2016, the number of homes for sale in Utah was at an all-time low, according to records dating back to 2003.

The 11,133 properties on the market represent a supply of 2.6 months. In other words, all homes would be sold in less than three months if no additional properties came on the market. Conversely, at the height of the housing downturn, it would take more than 12 months to deplete supplies.

Buyers have the most selection and least competition in the higher price ranges, especially for homes more than $500,000. In fact, sales in the $500,001-to-$750,000 category increased 24 percent. Meanwhile, sales fell in categories below $200,000 as buyers fought for relatively few houses.

“With the market moving as quickly as it is, it’s important for both buyers and sellers to be working with an expert who can guide them through the process,” Dipo said. “Buyers need to know how to make their offers competitive so they have the best chance of getting the property they want. On the other hand, sellers need to be very careful as they manage multiple offers — both to get the best price and to avoid going under contract with two buyers.”

Affordability continues to be a challenge, especially with higher interest rates. The Utah Association of Realtors’ Housing Affordability Index fell 10 percent in 2016 to 121. That means a Utah family making the median income had 121 percent of that needed to qualify for the median-priced home — lower than last year but still better than during the 2006-07 housing boom.

While the jump in interest rates after the election dampened some buyers’ enthusiasm, sales were still strong in December, up about 2 percent from last year. Pending sales, a measure of sales activity over the next couple months, also rose 16 percent — evidence the market is still active despite the higher costs.

Originally published in the UAR Blog.

Solving the Down Payment Problem

Down Payment

Legislatures across the country are considering bills that would create savings accounts for first-time homebuyers

The butterfly effect is a metaphor that originated in meteorology. The notion is that the course taken by a hurricane could be set by a minor perturbation – like a butterfly flapping its wings – thousands of miles away weeks earlier.

In short, the concept is small causes can have large effects.

New York: The Highest Closing Costs in the Country

New York may not be thousands of miles from other states in the country, and hurricanes don’t usually form in the Northeast, but there’s no doubt that when it comes to strategies to stimulate the real estate market, New York was definitely first to flap its wings… and the rest of the country is starting to feel the effect.

In 2016, the New York State Association of REALTORS (NYSAR) began a big push on the state legislature to craft a bill that would create a savings account for first-time homebuyers.

“Looking at trends across the country and specifically in New York, we saw they pointed toward a downturn in first-time buyer participation in the housing market despite historically low mortgage rates and other conditions favoring buyers,” said Mike Kelly, Director of Government Affairs for the New York State Association of REALTORS®. “For our state to grow and thrive, we need to keep our young families and individuals by helping them overcome the barriers to achieving the American Dream in the Empire State. Our NY First Home program will help them get started on the path to home ownership.”

Modeled after the state’s 529 college education savings program, the plan would be to create a dedicated, tax-free savings account that would allow New Yorkers to save money annually and apply it toward the purchase of a first home.

The legislation has been reintroduced in the New York Senate and Assembly this year and would allow individuals to save $5,000 annually and couples up to $10,000 annually with a maximum of $100,000 to be applied to the purchase of a first home.

“Many renters in their 20s and 30s don’t see a path to home ownership. That gap was lost on a lot of them. Not because of interest rates – which are still at all-time lows – but the challenge of overcoming the highest closing costs in the entire country.”

“Many renters in their 20s and 30s don’t see a path to home ownership,” Kelly said. “That gap was lost on a lot of them. Not because of interest rates – which are still at all-time lows – but the challenge of overcoming the highest closing costs in the entire country. Our research shows that more young adults after college are living in their parents’ basements today than at any time since World War II.

“We were looking for a way to assist those people with the largest financial decision of their lives and provide them incentive to get them over the finish line.”

Many millennials, who make up much of the first-time home buying population, struggle to save enough for a down payment, never mind all the closing costs, taxes and fees that come with the purchase of a home.

The struggle comes from mounting college debt, low wages, the high cost of housing in some New York communities or a combination of all three.

And research by American Strategies shows that 82% of New Yorkers support this proposal and that 84% believe that closing costs and down payments are the biggest hurdle to buying a first home.

“It makes sense for the person looking to buy because people are beginning their working life with a lot of debt and uncertainty about where they want to live,” Kelly said. “If they are considering New York we want to give them incentive to stay here.

“We have seen people leaving the state (upstate) for years. We’ve had a brain drain. For the first time in many years we had a population loss in New York in 2016 – even including New York City.”

While the cost of this savings account program would be $1.8 million for all New Yorkers in the first year, the investment would generate $431.5 million in revenue for the state and counties from real estate transaction, sales and income taxes.

“I think it’s a no-brainer,” said Kelly. “It’s an incentive not a giveaway – but it provides people with a path to home ownership and thinking about their future.”

Picking Up Stream Across the Country

Over the course of the past year, this has gained a lot of traction in New York. So much so that other state associations have begun pushing for similar legislation.

There are differences wherever you go – some allow parents or grandparents to setup the accounts for their children or grandchildren. Some allow them to contribute to the account annually as well.

Some allow for individuals or couples who have not owned a home in the past three years to also be eligible to save the money. Some allow it for the purchase of any home.

Others expand the limit of the annual contribution amount. Most have now included opening the account at any bank the individual or couple wishes – as long as they are FDIC-insured.

Proposals are already in place in states like Iowa, Minnesota, Missouri, Oregon and Oklahoma. Other states, like New Jersey and Pennsylvania are considering laying the groundwork as well.

The goal, ultimately, is to get into every state – or at least every state that needs it.

The goal, ultimately, is to get into every state – or at least every state that needs it.

Data from American Strategies shows similar support in these states as well, with 75% or more of the people polled supporting this concept.

And the elected officials are starting to take notice.

“We’re one of the first states to propose a tax deduction on savings for the purchase of a first home and there’s real interest in our state legislature,” said Kelly. “I don’t know of any known opposition, but the trick is, how do you get state lawmakers to understand that this is a revenue generator?

“We have a real estate transfer tax and a recording tax in New York – and they fund programs at state and county levels. Those revenues are generated from real estate transactions at a rate of 5-to-1 over losses from the tax deduction from the savings account. There’s a bit of skepticism because of the deduction so the challenge is still getting the attention of the Governor and state legislature that this should be a priority.”

It’s definitely a surging storm of optimism across the country that could help get more people to achieve the dream of home ownership.

A storm that started with a flap of the wings in New York.

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Montana REALTORS Discuss Homeowner Issues With State Legislators

Manoa flood
REALTORS® from across the state met with legislators to talk about a range of issues important to homeowners.

Montana REALTORS® are not only community builders they are political advocates, working to ensure that homeowners’ legal rights are protected and that they are given a voice in the Capitol. On February 15, a group of around 100 REALTORS® did just that by gathering together at the Montana REALTORS® Association (MAR) offices in Helena.

MAR assisted REALTOR associations throughout the state by organizing transportation so that REALTORS® from all areas could attend the event. Once assembled at MAR offices, the REALTORS traveled together to the state capital where they attended a rally and information session with Governmental Affairs Directors and guest speakers. Afterwards, REALTORS® spent one-on-one time discussing relevant issues with Butte-Silver Bow Legislators as well as others.

Rich Mayo, Vice President at MAR shared details about the event, “We welcomed the legislators to a luncheon in the rotunda of the capitol building. Tables were set up with elevated cards identifying the different regions of the state. Representatives sat at their respective tables with REALTORS® from their areas.”

Rocky Mountain Association of REALTORS® President Jennifer Shea touched on some of the topics that REALTORS® focused on during their time with state legislators. “We discussed water policies, mortgage exemptions, landlord tenant notifications, subdivision phasing, condominium and townhouse conversions as well as other bills facing both the Senate and House.” Mayo added that, “In addition to the conversation, we shared informational card packets containing perspective on all the bills we are working on and the rationale behind them.”

MAR felt that it was a very successful event with a lot of productive and healthy dialogue. “We are confident that the legislators left with a better understanding of what we are fighting for and why” stated Mayo. MAR plans to repeat A Day On The Hill next year and will continue to seek opportunities to advocate for homeowners.

Montana REALTORS Oppose Well Permit Ruling

The Montana Supreme Court recently upheld a water well permit ruling that could have serious consequences for state residents. Montana water use law requires permits to be obtained for all interconnected, water wells. Prior to the ruling, small, stand-alone wells that drew less than 35 gallons a minute and 10 acre-feet a year were able to bypass this permitting process.

This meant that developers, homeowners and farmers were able to install small, independent wells without going through an intensive permitting process. However, the court’s ruling reverts everything and forces landowners to go through a time consuming and outdated approval system in order to install a new well on their property.

Some conservationist are in support of this ruling because they have concerns that the increase in small wells will eventually create a reduction in groundwater levels and surface water flow. However, The Montana Association of REALTORS (MAR) disagrees and feels that upholding this ruling does a disservice to Montana residents.

“Exempt wells have served Montanans for years and the detailed scientific studies conducted determined that these exempt wells have virtually no impact on groundwater and stream flows,” MAR association CEO Taylor Oldroyd said.

The association is also concerned that the ruling will force new home developers to build subdivisions that are a great distance from each other. Creating an unwelcome sprawl that takes away from the beauty of Montana’s landscape.

Oldroyd shares that MAR will continue to work closely with their coalition partners in order to pass a new exempt water bill. One that will minimize regulations and support the historic well use that has served Montana developers and homeowners all these years.

Generation X Re-enters the Housing Market

New homowners

The number of Generation X home buyers is increasing thanks to an improving economy, multiple years of strong job growth and a notable increase in home values.

This is according to the National Association of Realtors® 2017 Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers.

What’s been holding Gen X households back?

Unlike Millennials, Gen Xers have higher student loan debt, are more likely to have previously sold a distressed property, and are the generation most likely to have owed more on their mortgage than their house was worth.

“Gen X sellers’ median tenure in their previous home was 10 years, which puts many of them selling a property they bought right around the time home values were on the precipice of declining,” said Lawrence Yun, NAR’s chief economist.

“Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home.”

“Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home. More Gen X sellers are expected this year and are definitely needed to ease the inventory shortages in much of the country.”

The uptick in purchases from Gen X buyers this year (28 percent) was the highest since 2014 and up from 26 percent in 2016.

Millennials were the largest group of recent buyers for the fourth consecutive year (34 percent), but their overall share was down slightly from a year ago (35 percent). Baby boomers were 30 percent of buyers, and the Silent Generation made up 8 percent.

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Heavy Rains in Hawai’i Can Cause Catastrophic Damage to Property

Heavy rains can happen throughout the year, putting property at risk. Cresting streams and rivers, backed-up storm drains, and saturated ground can all cause serious damage when there is an excessive amount of rainfall.

In some instances, heavy rainfall can also lead to flash floods, a rapid flooding of low-lying areas in less than 6 hours. Flash floods are known to roll boulders, tear out trees, and destroy buildings and bridges.

Manoa flood

Flood waters pushed several vehicles into the trees immediately downstream from the Woodlawn Drive Bridge. Source: National Weather Service.

The Manoa Flood

In October 2004, a severe thunderstorm moved onshore from the east-northeast over the Koolau Mountains and into Manoa Valley, causing a flash flood in the early evening hours. The intense rainfall caused Manoa Stream to quickly overflow its banks in several areas.

The worst flooding occurred when a debris-clogged bridge diverted flood waters out of the normal stream channel and sent a flood wave through a residential area and into the University of Hawai’i at Manoa campus.

The worst flooding occurred when a debris-clogged bridge diverted flood waters out of the normal stream channel and sent a flood wave through a residential area and into the University of Hawai’i at Manoa campus.

Flood waters poured into the basement of Hamilton Library and damaged or destroyed archives containing irreplaceable documents. Several instructional facilities and laboratories with critical experiments also sustained significant damage.

Luckily, there were no deaths or reported injuries. But, the total damage reached an estimated $85 million, most of which occurred on the University campus. About 120 homes also sustained varying degrees of damage.

Are You Prepared for a Flood?

Residents and business owners need to prepare for flood conditions. Before the threat of flooding becomes imminent, residents and business owners should:

  • Purchase a flood insurance policy if they do not already have one.
  • Review their current insurance policy, become familiar with what is covered, and ensure the limits are adequate for their building and personal belongings.
  • Make an emergency kit, plan evacuation routes, and keep important papers in a safe, waterproof place.
  • Itemize and take pictures of possessions.
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Source: National Weather Service, Hawai’i Flood Information and’s Flood Risk – Heavy Rain Fact Sheet.