OGDEN — For Kristen Nelson, 27, living in a new home is the culmination of months of searching and waiting that has now resulted in her family’s American dream.
About two weeks ago, she and her husband, Tyler, 23, and their two children moved into their house on Ogden’s east bench. While the young family of four is getting more comfortable with their new surroundings everyday, they never imagined that their first house would be such a find — especially in these challenging economic times.
“The home is immaculate,” she said. “People who have seen the pictures (marveled) at what we paid for the house.”
Thanks to historically low interest rates, the Nelsons were able to purchase their 1,800 square foot three-bedroom, two-bath property for $150,000 through a short sale — where a lender allows a customer to sell a home at fair-market value and pay off the loan for less than the amount owed on the loan — after looking at more than 500 properties online and at least 50 homes in-person.
"I'm pretty picky," she said. "We came from 900 square feet and wanted something where we could open the fridge and open the dishwasher at the same time and not have the person sitting at the dining room table not have to 'suck it in.'"
Fortunately, their search ended successfully and they are among many Utahns who took the plunge into homeownership this summer.
According to a recent report by the Utah Association of Realtors, home sales in July 2011 rose 16.4 percent compared to July 2010.
Additionally, Metrostudy — a nationwide market research firm — said inventory for new single-family homes under construction increased 7.1 percent over last quarter, signaling a demand for new housing.
“There is a healthy balance of inventory of newly-built homes within the greater Salt Lake market,” said Eric Allen, director for the Utah/Idaho region of Metrostudy. “While the annual pace of new home starts for detached single family homes decreased 18.8 percent compared to last year at this time, it’s important to note that last year at this time the market was inflated due to the government tax credit.”
He said the combination of low interest rates and falling home prices have resulted in a prime environment for potential buyers to find affordable properties. Of the 2,000 new single-family homes currently in inventory, 28 percent are under construction and priced below $300,000, Allen added.
“Some people may have been hesitant to buy a home because of the instability of the national economy,” said Amber Wykstra, vice president and residential loan production manager for Bank of Utah. “But, certain favorable conditions in Utah’s housing market have created a great window of opportunity for those anticipating buying a new or existing home.”
And, if you need to sell your existing home, keep in mind that Salt Lake is one of the top five housing markets in the nation, meaning that home values have dropped the least in Utah, she said.
The National Association of Home Builders recently reported that Salt Lake City reached a seven-year high for home affordability. In the Salt Lake area, 79 percent of homes sold in the second quarter of this year were within reach to families that make median area wages.
The Ogden-Clearfield and Provo-Orem areas were also rated as affordable based on mortgage rates, incomes and median home prices. The median price for homes sold in Utah since January has hovered around $175,000.
Add to that, mortgage rates have been at or near record lows for months, with a 30-year, fixed-rate mortgage averaging 4.15 percent. Some government-backed loans are around 3.36 percent for a 15-year fixed rate mortgage, and a five-year adjustable rate mortgage was recently as low as 3.08 percent.
Overall, the current Utah housing market seems to be more of a buyers market than was the case a few years ago.
The number of homes sold statewide and the median price paid for them has declined significantly since 2007, according to data from the Utah Association of Realtors.
Sales fell 3.4 percent from 2009 to last year, while the median sales prices dropped just over 5 percent during the same period. This year, prices have fallen almost 8 percent from January to July, while the number of homes sold has decreased 1.6 percent.
Veteran Realtor David Seiler with ReMax Associates said prices will likely continue to fall as "the market struggles to find its reality" from the artificially high prices of a few years ago.
As the market remained in a state of flux, potential buyers like Davis County resident Amy Pace (and her husband) were on the sidelines trying to decide whether to take the leap into homeownership. Now they are excited to have recently purchased a lot in Layton where they are preparing to build the house of their dreams for their two daughters.
"The reason why we didn't do it a couple of years ago is because we weren't sure where rates were going, and we heard they were going to be dropping," Pace said. "(Now) we're probably going to break ground in about two or three weeks. ... We've got our plans drawn. We're very excited!"
Wykstra said that despite the uncertainty regarding the national economy, Utah's housing market seems to be in a highly desirable position right now due to low interest rates and affordable pricing. She said those who are in a position to make a purchase should take advantage while they can.
“If you have money for a down payment, good credit and a stable income, now is a great time to buy,” Wykstra said.