Tooele County Real Estate & HomeTown Stuff

What may be worse than government involvement in something?

How about a government regulated utility?

For years, I've sung the praises of Tooele County.

 Amazing people and amazing quality of life have combined to make Tooele County one of the fastest growing counties in the nation. With that growth comes the need for more electrical power. We need it to entice the business and industry we've been trying to lure here.

So, when I learned that Rocky Mountain Power was proposing a massive project to run 345kv lines into the County, I was of mixed mind. Yes, we need the power, but how will miles of 150 ft to 250 ft towers impact the valley?

 When we saw the proposed route on the "draft" environmental impact study, it was clear that there was no upside. Not only is it going through the most scenic, and therefore expensive real estate in the County, it's not even going to be used in Tooele County!

They are proposing running towers as high as 12 story buildings right across Tooele, near a major reservoir, and within a couple of hundred feet feet of our most expensive homes. Tooele City, Tooele County, Stockton and Grantsville residents, as well as all of those local governments have been attempting to work with RMP to come up with a more acceptable route,but have been met with vague, corporate reasons for the unsuitability of those routes.

 At last nights public hearing with the Tooele County Planning and Zoning commission, to deal with RMP's application for a conditional use permit to construct, their arrogance was finally brought into the light.

Our suggested route was unacceptable because they couldn't risk having two of these lines so close together, in the event of an earthquake (possible but not likely), a plane crash (less likely) or, wait for it...the Great Salt Lake "freezing over".

The fact that they currently are running 4 such lines in one location leading to Camp Williams was lost by the shock at hearing that a body of water with twice the salt content of the ocean is in danger of freezing! 

So much for global warming, I guess.

The final straw for me was the fact that, although they are using the explosive growth of Tooele County as a need for these lines, in this location, there are no plans to bring any of this power to us! It's all going to the Salt Lake valley! 

 RMP also took over 3 hrs to make their presentation to the Commission (don't even get me started on the expert "appraiser" saying that within 12 years, property owners won't even notice the towers, and that there shouldn't be much impact on property owners), hoping that the standing room only group of citizens and public officials would get tired of waiting to talk. That didn't happen. They adjourned around 11:30pm promising to hold another public hearing, to continue the public input. 

 So, while my experience in dealing with the legislature and other groups has taught me a great deal, I was not prepared for the arrogance displayed by a utility that thinks we are either too backward, or flat out don't matter.

 I think they will find out that neither is the case. They will attempt to ram this through anyway.

 I'm guessing the citizens of Tooele County will quit on this one when....the Great Salt Lake freezes over!

A tale of two services...

We just returned from a wonderful vacation.

Berna and I took a 7 day cruise in the Caribbean.

 It was our first actual vacation in years, with no phones, no work, no meetings, no nothing.

 Naturally B and I used it as an opportunity to "sharpen our saw" a bit, and talk about some of the things we want to work on this year to improve our business.

 One of the things we've always prided ourselves on, is the quality of our service to our clients.

 Information, they say, is king in this day and age, but, I would argue that while having the best, most timely and useful information ( which we do!) is certainly the best way to gain new clients.

 I've always believed that the best way to keep your old clients and let them bring new business to you is with service.

This trip gave me an excellent example of how service can affect your business. Our trip took us to several places in the Caribbean, among them Haiti, Jamaica, Grand Cayman and Cozumel.

 I'll use a couple of extreme examples to make my point. "Jerry" was the captain of our catamaran on our snorkeling excursion in Jamaica. Jerry truly is a disciple of the stereotypical Jamaican philosophy of "no problem, Mon!"

That was his attitude when the motor quit in high seas, leaving us in danger of capsizing for a half hour before the "rescue" boat showed up to take us in tow.

At that point, his laid back attitude nearly put us all in the sea, as he directed the rescue boat in such a way that we nearly were run down by it.

Rope after rope broke, and the cat was being torn apart by Jerry's boat handling, (or lack thereof). It was always "no problem", especially to his crew members who kept finding reasons to get aboard the rescue boat, leaving us on the cat.

When we made it back to port, we canceled the remainder of the tour. 

No one would get back on a boat with him or his crew (Royal Caribbean refunded half our money).

Counter "no problem" with our stateroom attendant, Listra. Her attitude was always, "how can I solve your problem"? She was always there when needed, always with a smile, and always with useful information about how things worked on the ship. She knew the tricks of the trade, a true professional. She knew what time we left our room, and we never had to worry about being in her way, or her being in ours. 

Listra was from Trinidad, disproving the theory that "no problem, Mon" is an attitude that permeates the Caribbean.

 First time I've ever hugged a staff member of a hotel on the way home from vacation. So, as they both worked for tips, who do you suppose made out better?

Who would I go to again? The answer is obvious. 

So, how do we work this lesson into our business?

Quite easily! Look.

 We all have access to the same information. We all have great websites. We all work hard.

 So, the only thing we can do to set ourselves apart is the service portion of our business. Use the latest technology to reach our people first, with the best.

Go the extra mile.

Remember who it is that pays the bills.

Be and do what our clients want.

 It's the same thing we hear about all the time. Sometimes we just need a Jerry and a Listra to remind us.

 Remember, the best business is repeat business.

 How do we get "clients for life"?

 SERVICE!!!!!

 Lesson learned.

In Utah Real Estate; It's Pointing Fingers and Stating the Obvious!

One thing I've noticed during the last couple of years is that if a Realtor, a Lender and a Home Buyer are having a discussion about Utah Real Estate they will more likely than not end up pointing fingers and stating the obvious. 

These have been some tough times for those involved in any way with buying or selling a home in Utah.

So, I was glad to have had  the opportunity to spend a couple of informative hours this week attending  Governor Herbert's first Real Estate Lending Summit. 

One of the great things about having a Governor that is a Realtor is that we don't have to convince him of the importance of the housing industry to the State of Utah. He Knows what the sale of just one Utah Home means to our economy in the way of jobs, fees, and taxes.

The Governor assembled a panel that included the top officials in the State from all of the "players" in the industry. Bankers, Realtors, Appraisers, Mortgage lenders, Commercial and Residential Builders and regulators all had the chance to have their say.

While there was very little "new" stuff revealed, it was the first time that we had all the players singing from the same sheet of music.

It started out with a lot of finger pointing and blame enough to go around.

But ultimately It was good for the builders and developers to be able to voice their frustration over development and construction lending, and for the bankers to explain their position.

Realtors got to talk to Appraisers about delays and low appraisals, and Appraisers got to talk to lenders about their issues with the changing models in their business.

So, what will this mean to us here in Tooele County?

Probably not much in the short term.

But, long term,  a potential municiple component.

That component was in the form of zoning flexibility and impact fees.

Impact fees have become (after land aquisition costs) one of the major expenses making development and building so costly. 

Realtors in Tooele County have spent the last several years building relationships with City and County officials in the hopes of being able to work together. We want to be able to develop and build in a smart way that benefits everyone, and the Cities and County want smart managed growth and a renewed revenue stream to provide service to it's citizens.

With a new Mayor and Councilmen in Grantsville, and improved communication with Tooele City and Tooele County, it's my hope that we can all work together to create a win for all. No one wins if we don't all work together through this tough time.

That was the best thing to come out of the Governor's Summit. Communication and cooperation will be the key to weathering this storm! 

Actually the best thing to come out of the meeting was a commitment to do it again and again, bringing  new solutions, and new concepts.............. I'll be there to report.!!

If you want to talk about buying or selling a home in Tooele County, give me or my partner (in more ways than one) Berna a call @ 435-840-5029.

If you just want to find out about homes for sale in Tooele City, Stansbury Park, or Grantsville Utah stop by our website @ Tooele Real Estate. 

When you are ready to discuss Utah Real Estate it wont be pointing fingers and stating the obvious.

Tips for selling your home during the holidays - President’s Message

Tips for selling your home during the holidays

President’s Message

Chris Sloan

                With cold, snowy weather and a never-ending to-do list, selling a home during the holiday months may seem unreasonable and impossible. In fact, many homeowners decide to take their homes off the market so they can enjoy the holidays, one reason housing inventory traditionally drops off in December.

For those who need to move, however, holiday home selling has its advantages. For one, there are fewer homes competing for buyers’ attention. December buyers are also known to be more serious, often job transferees or investors wanting to get in another deal before the end of the year.

While selling a home during this busy time may not be ideal, it is doable as long as the home is priced right and the presentation is impeccable. Use the following tips to help your home take center stage this winter.

Make safety a priority

                With cold, dark nights and icy sidewalks, safety must be a top priority. The last thing you want is for buyers to remember your house as the one where they fell or got their car stuck in the driveway.

Make sure to keep your driveway and sidewalks free from ice and snow. Keeping the house well-lit will also help ensure buyers’ safety as well as enable them to locate your house. Pathway lights or a timer for your porch light may be helpful. A large doormat for buyers to easily wipe off wet shoes will also come in handy.

Use holiday decorations to your advantage

                Simple, elegant holiday decorations can create an inviting atmosphere when your home is on the market in December. A simple pine wreath or a well-decorated tree can create an atmosphere that encourages people to buy.

                Nevertheless, holiday decorations must be kept simple. Elegant, white lights on trees or shrubs work well to illuminate your home’s exterior, but blow-up decorations should be saved for another year.

                Inside, keep things simple and classic like the decorations at a high-end hotel or department store. Avoid putting out too many decorations that will make the room or counters appear cluttered. If that means putting some furniture in storage to make room for your Christmas tree, do it. Don’t let your decorations make the home appear smaller than it is.

                Other decorations to avoid are ones with a religious theme or ones that hide the home’s best features. Warm cider and cookies can also add a cozy, comfortable feel and smell to your home, but make sure to not overdo it with scents.

Remember to update your photos

                If your home is still up for sale in February, make sure you are advertising the home with up-to-date photos. Don’t call attention to the fact that your home hasn’t sold by using pictures taken at Christmastime.

Having a variety of high-quality photos in your online advertising is also beneficial since many buyers start their search on the Internet before heading out into the cold.

Consider warmth and lighting

                If you have a fireplace, make sure it’s on so it can create a warm, homey atmosphere. Owners of both vacant and occupied homes should make sure the thermostat is set high enough to keep any potential buyers comfortable. Lights and lamps should also be turned on to create a feeling of warmth during the dark, winter months.

Be flexible with showings

                The buyers who shop during the winter and holiday months are some of the most serious, so it’s to your benefit to accommodate potential buyers and be flexible with showings. Buyers will often use vacation time during the holidays to do home shopping if they urgently need to purchase. If you shut your house down during the holiday weeks, a potential buyer may simply move on to another property. 

Hire a Realtor

                When hiring a Realtor to sell your home during the winter, ask whether he or she will be available during the holidays in case a buyer makes an offer. Start your search for a listing agent by asking family and friends if they can recommend a Realtor who will go the extra mile to get your house sold. This type of Realtor will be invaluable in easing your stress and helping you enjoy the season.

                I’ve enjoyed writing this real estate column for the past year and sharing information with you about home buying and selling. My successor, Lerron Little, 2010 president of the Utah Association of Realtors, will continue this column in the upcoming year and will make sure you’re up-to-date with all  the latest real estate news and information.

Real estate conditions ideal for first-time buyers - President’s Message

Real estate market conditions proved ideal for many entry-level buyers this year who took advantage of historic opportunities to own a home. According to the National Association of Realtors’ newly released “2009 Profile of Home Buyers and Sellers,” first-time buyers became homeowners in record numbers in 2009, comprising 47 percent of all home sales, up from 41 percent in 2008.

The high market share of first-time purchasers, which is the highest on records dating back to 1981, underscores the favorable real estate buying conditions over the past year. A perfect storm of low interest rates, reduced housing prices and a home buyer tax credit worth up to $8,000 motivated buyers to get off the fence. In fact, NAR economists estimate that the first-time home buyer tax credit, which has now been extended and expanded, was responsible for generating at least 350,000 to 400,000 additional home sales.

            Not only has the government offered incentives, but the increases in affordability in recent years have been significant. A survey from the National Association of Home Builders and Wells Fargo said nearly 17 percent of Salt Lake homes sold in the third quarter were considered affordable to those earning the area’s median income, up from 55 percent last year at the same time. The NAR survey also reports that sellers are cutting their prices more. In 2009, the sales price was a median 95 percent of the list price compared to 96 percent in last year’s survey.

            Although most first-time buyers in the NAR survey said “a desire to own a home” was their primary reason for purchasing a home in 2009, a greater percentage of home buyers cited “affordability” as their main reason, 10 percent in 2009 compared to 5 percent in 2008.

            The affordability gains were particularly important to first-time buyers because they often make financial sacrifices to purchase a home. According to this year’s survey, 39 percent cut back on luxury items, 38 percent cut spending on entertainment and 30 percent cut back on spending on clothes.

            Along with reduced home prices, another benefit to home buyers is the fact that a number of sellers are offering incentives as part of the home purchase. Among all recent sellers, 58 percent indicated that they did not offer an incentive. However, 21 percent offered a home warranty policy and 18 percent of sellers reported that they offered assistance with closing costs. Incentives were more likely the longer a home had been on the market.

            An additional incentive for buyers is the government’s tax credit worth up to $8,000, which 6 percent of buyers said was their primary reason for purchasing a home. Formerly set to expire Nov. 30, the tax credit has now been extended to April 30 and expanded to buyers who have already owned a home. This expanded credit is worth up to $6,500 and is only available to buyers who have lived in their primary residence for at least five consecutive years out of the past eight. 

            For those who want to take advantage of this final tax extension, time is of the essence since home-buying is a multi-month process. According to the NAR survey, buyers searched for homes for a median of 12 weeks and viewed 12 houses. That means buyers should start looking at properties by the beginning of February to meet the April 30 deadline.

            Buying home can be a daunting process, even during traditional economic times. In today’s market, buyers who want to get the best price and the best value should make sure they’re working with a Realtor.

Understand how new lending requirements affect you-President's message

                The first big change is that mortgage lenders are now required to provide consumers with a good-faith estimate of the loan costs, called “early disclosures,” at least three days after the borrower applies for a loan. The consumer then has seven days to review the disclosures before the loan can close. Even if the consumer wants less time for review, the lender cannot close the loan until the seven review days have passed.

                Another change is the fact that lenders must provide consumers with the early disclosures before collecting any fees, except for a reasonable fee to obtain a credit report. Only after the borrower has received the initial disclosures can the lender collect fees from the home buyer.

                Finally, the new regulations require the lender to provide the consumer with new disclosures every time the annual percentage rate changes by more than .0125 percent. The buyer then has another three business days to review the updated disclosures before the loan can close.

                While the mandatory seven- and three-day wait periods are designed to give buyers adequate time to review their mortgage obligations, they can also delay closing dates if last-minute changes are made to the loan.

                For example, let’s say a borrower locks her interest rate a few days before the scheduled closing date. If the APR has changed more than 0.125 percent from the initial disclosures, the lender will be required to send updated disclosures and a mandatory three-day review period will be required, which could unexpectedly delay the scheduled closing date. The delay could be even longer if the disclosures are mailed.

                That’s why it’s important for buyers to talk to their loan officer about changes that could affect their closing date. They should keep their Realtor informed of their progress so they can amend and extend their purchase contract if necessary. Potential items that could change the loan’s APR are an interest rate lock or re-lock, a modification to the loan amount, a rescheduled closing date or a change in the loan product.

                Because these items as well as many others could change the APR, thereby affecting the closing date, many major lenders are advising buyers to plan for escrow periods of at least 30- to 45-days. Lenders are also encouraging buyers to lock their loan’s interest rate as soon as possible, preferably 10 days before the scheduled closing.

                With all these rules, some buyers may wonder whether they can waive the mandatory wait periods. Although the government has said the rules are not required in a bona fide financial emergency, buyers should not count on having the wait periods waived. The government has said waivers will only be allowed in extreme circumstances.

                Along with the consumer protections described above, which apply to all mortgages secured by a borrower’s home, a separate regulation provides home buyers with the right to review their appraisal at least three days before closing. Unlike the requirements described above, the borrower can waive this right if he or she desires.

                Taken together, the new changes to the lending rules are designed to protect consumers and give them time to make informed decisions. For more information about the home-buying and financing process, contact a local Realtor and mortgage officer.

Wasatch Front Homes Sales Surged-President's Message

The Wasatch Front-area IE: Salt Lake, Tooele, Davis, Weber & Utah Counties home sales surged in October  as buyers rushed to take advantage of a tax credit for first-time home buyers formerly set to expire Nov. 30.

Now extended and expanded, the tax credit helped boost area home sales, which were up more than 25 percent in October compared to the same month last year.

The Wasatch Front hasn't seen this big an increase in sales since March 2005 during the real estate boom. During October,

Realtors in Salt Lake, Utah, Davis, Weber and Tooele counties sold 2,228 homes and condominiums, up from the 1,778 sold in October 2008. Sales were up 7 percent from September, even though sales typically taper off at the end of the year. In fact, the sales figures rivaled levels seen in June, typically the state's strongest month for home sales. The sales increases were broad-based with each county posting double-digit gains.

The biggest increase was in Tooele County with a 58 percent gain. Coming in second was Utah County with a 28 percent increase. In Salt Lake, Davis and Weber counties, sales were up 23 percent.

The approaching tax credit deadline had the same impact on U.S. home sales, which also surged in October. Compared to October 2008, sales were up 23.5 percent, and on a seasonally adjusted basis, sales increased 10 percent compared to September. Both locally and nationally, sales in lower price ranges were particularly strong.

For Wasatch Front homes listed below $250,000, sales were up a whopping 39 percent. Sales could continue to post gains in November as the markets continue to see lingering effects from the former deadline. The new cutoff date for the tax credit requires buyers to be under contract by April 30 and to close within 60 days. Experts say the new deadline could create a similar surge in sales in spring and early summer 2010 as another set of buyers rushes to meet the new deadline. "There is still a large pent-up demand that can be tapped before the tax credit expires," said Lawrence Yun, chief economist of the National Association of Realtors. "Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was canceled or fell through - there likely are many more buyers who were attempting to purchase but simply ran out of time."

Along with the tax credit deadline, highly affordable conditions also contributed to the sales boost in October. Locally, Salt Lake homes are the most affordable they've been since 2004, according to a new Wells Fargo/National Association of Home Builders report. Nearly 71 percent of Salt Lake homes sold in the third quarter were considered affordable to those earning the area's median income, up slightly from the second quarter and up from 55 percent last year at the same time. Driving that affordability is a combination of lower home prices and super-low interest rates.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage is at its lowest point since May and more than one percentage point lower than last year at this time. For a 15-year fixed-rate mortgage, rates are the lowest they've been on records dating back to 1991. Low prices are also contributing to the favorable affordability conditions.

 In October, the median price of a Wasatch Front home was $195,000, 9 percent lower than the median price of $215,000 a year ago. On a national level, the price-to-income ratio has now fallen below its historic trend, which means buyers are receiving greater-than-normal value for their purchasing dollars.

The combination of these three factors, low interest rates, affordable home prices, and a tax credit worth up to $8,000 or $6,500, has created a truly unique purchase opportunity that will only last into early next year. To get the latest information on your market and all the incentives available you, contact your local Realtor.

Or you can give us a call @ 435-840-5029 to discuss the Wasatch Front Homes Sales Surge.

Common Housing Market Questions-President's message

Common Housing Market Questions

President’s Message

Chris Sloan

                As we near the end of 2009, we find that housing markets nationally and locally are in much better shape than they were last year at this time. The combination of low home prices, bargain mortgage rates and government tax incentives has created a momentum and demand for homes that is likely to continue into next year and hopefully break the cycle of bad news.

                If you’re thinking about buying a home in the next few months, you’re likely to have a lot of questions about home buying and current market conditions. Here are answers to some common inquiries:

When will the housing market recover?

We’re already seeing some signs of recovery for housing. On both a national and a state level, sales appear to be on the way up. In Utah, third quarter home sales were up 2 percent compared to the same period a year before, the first quarterly rise since second quarter 2006.

Experts have mixed opinions, however, about the direction of home values next year. Lawrence Yun, chief economist of the National Association of Realtors, believes U.S. home prices will get a 3-5 percent boost, while Mark Zandi, chief economist and co-founder of Moody’s Economy.com, believes prices will see more declines as new foreclosures come on the market.

The fact is there is no consensus on when the bottom will be and no home buyer will be able to time it perfectly. Buyers should be aware that price drops or gains will vary significantly depending on the location and the price of homes. In fact, some homes (like lower-end homes or houses in prime locations) have likely already seen their values stabilize.

Is it a good time to buy a home?

Yes, it’s a good time to buy a home depending on your circumstances. If you have a stable job, steady income, good credit and are planning to stay in the house for at least four or five years, then a home purchase may be a wise decision.

Today’s home buyers have tremendous advantages. In many areas, home prices have come down from their peaks and are incredibly affordable when you take into account the super-low mortgage interest rates.“The market is just about as affordable as it’s ever been at least based on incomes,” Zandi told attendees at a National Association of Home Builders conference.

The federal government’s home buyer tax credit is also a significant incentive. It’s worth up to $8,000 for first-time buyers and $6,500 for existing homeowners who have lived in their homes at least five consecutive years out of the past eight.

While consumers shouldn’t rush to make a home purchase if they are unprepared for the financial commitment, buyers who are ready to get into the market shouldn’t procrastinate too long. The extended tax credit ends April 30, and experts expect interest rates will begin to rise next year.

How do I know my local market is improving?

                One of the best indicators for knowing which way the market is headed is to look at the supply of inventory. In other words, how many months it takes to sell the current inventory at the current sales pace.

Generally speaking, this is about 6 months in a balanced market.  On a national level, Yun reports that it would take about 6 months to sell the current supply of inventory for homes less than $250,000, but it would take about 14 months for homes priced higher than $500,000. To get a better gauge on your own market and price range, talk to a local Realtor about whether inventory is trending up or down.

What happens if home prices fall after I buy?

                As long as you can afford your mortgage payments and don’t need to move anytime soon, a dip in prices probably won’t affect you too much. It could have an effect on your ability to refinance, but with today’s super-low rates you likely wouldn’t be able to refinance to a significantly lower rate.

Also keep in mind that homeownership is a long-term commitment, and home values tend to rise over the long run. For example, data from the National Association of Realtors show that home values tend to rise at the general rate of inflation plus 1.7 percentage points in a balanced market. That means homeownership is usually a pretty safe bet for those who are in it for the long haul.

Nevertheless, it’s important that you not overpay for your home. Before you make an offer on a property, make sure to talk to your Realtor to make sure the price you’re paying is in line with current market values. Also talk to your Realtor about any concerns you have about the home-buying process and ask for information about local market conditions.

For more information on the home-buying process, visit UtahRealtors.com or Realtor.com.

$8,000 tax credit for home buyers extended-President's message

$8,000 tax credit for home buyers extended

President’s Message

Chris Sloan

                Congress has extended a popular tax credit of up to $8,000 for first-time home buyers until mid-2010. Home buyers who were once under a tight Nov. 30 deadline now have until April 30 to be under contract to purchase a primary residence under new legislation President Obama signed last week.

                The bill also expands the tax credit to include existing homeowners who are purchasing a primary residence. Under the new provisions, current owners must have lived in their home for at least five consecutive years out of the past eight and are only eligible for a credit worth up to $6,500, unlike the $8,000 limit awarded to first-time buyers and those who haven’t owned within the past three years. Current homeowners will only be able to qualify if the home purchase is made after Nov. 7.

                Congress also expanded the potential pool of qualifying home buyers by raising the income limits. Under the previous version, home buyers would not qualify for the credit if their incomes exceeded $75,000 for singles and $150,000 for couples. Under the new legislation, single and married buyers can earn up to $125,000 and $225,000 respectively to receive the full credit. Those earning up to $20,000 above those limits may qualify for a partial credit.

                Although the tax credit has been extended, interested buyers should not procrastinate. To qualify for either the $8,000 or $6,500 credit, buyers must have a home purchase contract in place by April 30. Buyers then have until July 1 to finalize the transaction.

                While much of the tax credit has been expanded, Congress has added a couple new requirements. A home’s purchase price must not exceed $800,000, and buyers must provide documentation of the purchase when filing their taxes.

This is the third time Congress has extended the home buyer tax credit. The original 2008 tax credit provided first-time home buyers with up to $7,500; however, the money had to be repaid and was essentially like an interest-free loan. The second credit, which was enacted in February this year, gave first-time buyers up to $8,000 that did not have to be repaid.

                Already that tax credit has been highly successful. The National Association of Realtors estimates approximately 350,000 U.S. home sales this year are directly attributable to the tax credit.

In fact, overall sales began to increase both locally and nationally as the repayment-free credit began to take effect this spring. U.S. home prices even saw signs of stabilization, with prices rising for four consecutive months, according to the S&P Case-Shiller Index of 20 cities.

“We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” said Lawrence Yun, chief economist for the National Association of Realtors. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on records dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”

                Nevertheless, economists fear rising unemployment and another wave of foreclosures will continue to put downward pressure on prices. That why economists like Yun say the passage of this tax credit extension and expansion was critically important.

“Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures,” he said.

With the passage of the tax credit extension, Yun estimates U.S. home sales will rise 20 percent in 2010 and inventories will shrink back to normal levels, creating broad price stabilization across the U.S.

“The housing market will get a nice boost going into next year,” Yun said.

With all this momentum, however, Congress has made it clear that it will not be extending the tax credit for a fourth time. That’s why it’s imperative for home buyers to prepare now to take advantage of the credit before it’s gone for good.

To learn more about the tax credit, home buying in your area and how to get started on your home search, contact your local Realtor.

What's in store for mortgage rates?-President's Message

What’s in store for mortgage rates?

President’s Message

Chris Sloan

                Last week the Utah Association of Realtors and the Salt Lake Board of Realtors reported that home sales along the Wasatch Front increased about 4 percent in the third quarter. Along with the impact of lower home prices and government programs, one incentive that has helped spur the sales has been the incredibly low mortgage interest rates.

Because most homes are bought using credit, mortgage rates play a significant role in determining the overall affordability of a home. One study suggests a one percentage point decrease in rates is equivalent to a 10 percent price reduction.

Although interest rates have hovered in the 5 percent range all year, there is always uncertainty in regard to whether they will rise or fall in the future. For anyone looking to buy a home in the coming months, the question is particularly important.

Mortgage rates are determined by a variety of market forces, which make it incredibly difficult to predict exactly which way they’ll move. Generally speaking, 30-year fixed mortgage rates follow the yields on 10-year U.S. Treasury bonds, because 30-year mortgages are typically paid off in about 10 years because people move and refinance. Mortgage rates are generally about 2 percentage points higher than the yields on Treasury bonds, because a homeowner is seen as a greater default risk than the U.S. government.

One of the greatest factors in pushing up bond yields, and ultimately mortgage rates, is the outlook for inflation. If investors expect inflation to rise, they demand higher rates of return because inflation dilutes the value of the fixed payments they are scheduled to receive. Hence, if the dollar is weak, then there is less demand for bonds, which in turn pushes yields and rates up.

“Private investors could furthermore be worrying about potential inflation in later years when the economy recovers and want additional premium to compensate for the loss in purchasing power of the invested money,” said Lawrence Yun, chief economist of the National Association of Realtors, in an economic commentary.

Another factor in the mortgage rate equation has been the Federal Reserve’s purchase of mortgage-backed securities and Treasury debt. With the Fed making huge purchases of Fannie Mae and Freddie Mac securities, demand has been pushed higher and mortgage rates have fallen significantly. Mark Zandi, chief economist and co-founder of Moody’s Economy.com, said in a recent conference that without the Federal Reserve purchases, mortgage rates would be closer to 6 percent, rather than today’s rates that are around 5 percent.

The Federal Reserve has stated it will fulfill its commitment to purchase mortgage-backed securities by the end of March. Without this government demand, experts say rates will inevitably rise. Analysts at Barclays Capital in New York forecast mortgage rates will be slightly more than 6 percent by the end of March, according to the Wall Street Journal.

Some groups are hoping the Federal Reserve will expand its purchase program beyond first quarter 2010, which would delay the increase in rates. However, the Fed has to carefully plan its exit strategy so it doesn’t risk having too much money in circulation, which could create inflation risks.

As the Fed plays the careful act of balancing a fragile economic recovery against inflationary pressures, it seems certain that interest rates will rise next year although the timing is uncertain. In its most recent forecast, The National Association of Realtors predicts the 30-year fixed mortgage rate will begin rising at the end of this year and will hit the 6 percent level by the end of 2010.

Of course, your own financial situation will also play a role in determining your mortgage rate, since those with the highest credit scores tend to receive the best rates. You can also purchase a better rate using the point system, where you can incrementally buy down the cost of your loan. Finally, different lenders will offer a variety of rates and fees, so you’ll want to do some comparison shopping to get the best price.

Real Estate Is Still A Good Long-Term Investment-President's Message

Real estate is still a good long-term investment

President’s Message

Chris Sloan

A couple of weeks ago, I read an article from The Associated Press that detailed why, despite recent drops in home prices, “it still generally pays to own a home.” Although that may be hard to believe for the nearly 150,000 Utahan's who owe more on their homes than they are worth, AP writer Dave Carpenter says, “history suggests the American Dream is a pretty safe bet.”

                That’s because home prices since World War II have appreciated about half a percent above inflation, or 4 percent a year, according to the AP article. Separate data from the National Association of Realtors show that home values rise at the general rate of inflation plus 1.7 percentage points in a balanced market. Even during recessionary periods and periods of sales declines, the national median home sales price rose every year from 1968 to 2006.

                Of course, there’s volatility in the market and homes prices may go up or down depending on a variety of factors. But Carpenter’s point was that for those who own for more than a decade, the highs and lows will even out, and homeowners more than likely will come out ahead.

                Take, for example, the Salt Lake home buyer who purchased a home in September 1999 for the median price of $144,000. Although the home would have lost value since the peak median price of $237,000 in August 2007, today’s median price is still $206,000, which is 43 percent more than the median purchase price in 1999.

                Homeowners also reap the benefits of leveraging, which means you enjoy the entire amount of home price appreciation even though you have only used a small portion of your own money for the initial investment. For example, if the value of your home doubles and you only used 10 percent of your own money for the down payment, your cash investment will have increased 1,000 percent. 

                “Dollar for dollar, the rate of return on an individual’s cash down payment is substantial,” says the National Association of Realtors. “Home buyers typically use their own money to cover only a small portion of the purchase price, but the home appreciation they realize is based on the total value of the property.”

The rate of return on a housing investment also increases the longer it is held, according to Harvard University’s Joint Center for Housing Studies.  For example, an owner with a 10 percent down payment whose home appreciates at an annual rate of 5 percent generally will receive a 94 percent return on that cash after owning the home only three years. After owning for five years, the return on the down payment increases to 225 percent. After 10 years, the rate of return jumps to 623 percent.

                Holding a home for a long period also reduces a buyer’s risk of losing money. It evens out the ups and downs in the market and allows for appreciation to make up the transaction costs associated with buying and selling.

                Home-ownership also acts as a hedge against inflation. While rent costs will inevitably rise over time, the mortgage payment for a home bought with a fixed-rate mortgage will remain the same. In fact, real estate has historically been a good hedge against inflation unlike paper financial assets, according to Lawrence Yun, chief economist of the National Association of Realtors.

“Inflation has been a big headache for the country,” Yun wrote in a 2008 article. “A way to assuage that pain, however, is to own commodities — and a simple, good way is to own real estate. If commodity prices further accelerate for some reason, you will automatically be in the game.”

And don’t forget the tax benefits of homeownership, which allow taxpayers to deduct the mortgage interest and property taxes from their taxable income.

                Of course, homeownership provides a tangible shelter as well as an intangible sense of community and security, value greater than that of a possible return on your investment.

“For many, a house is back to what it traditionally was: a long-term financial commitment, a sturdy shelter and a place to hang your hat,” wrote Wall Street Journal columnist M.P. McQueen in a recent article.

Utah economy on the road to recovery-President's message

Utah's economy is currently facing challenges, but the state is well-positioned for an economic recovery. That was the message of the director of the University of Utah's Bureau of Economic and Business Research in a presentation to Utah Realtors on Tuesday.

Real estate incentives not just for first-time buyers-President's message

Price Reduced on 3663 Sun Valley Dr in Northwest

Northwest, Grantsville  -  Announcing a price reduction on 3663 Sun Valley Dr, a 2,505 sq. ft., 3 bath, 4 bdrm single story. Now MLS® $269,000 - Can't Beat The Price.

Property information

Want A Loan For A Fixer Upper?-Try FHA !

Corie Seymour's blog on getting a loan for a fixer upper that allows the home buyer to include the cost of the improvements to the FHA loan  was an eye opener.

The loan has always been available, but was so difficult for the buyer to package that we had almost forgotten about it.

Now if you keep the home improvements under $31,000 it's a piece of cake.

At least that's the way that Doug Walker explained it in Cories blog.

Not only have we sold some Tooele homes that would have been perfect for this type of mortgage, we could have put together some transactions that we couldn't make work before.

Listen to some of what Doug had to say.

Cheap Fixer Upper Financing

In this age of stimulus bills and bail outs you would expect a really cool mortgage loan program to help home buyers.  Well, there is one, but it’s actually been around for years.  There is a little known FHA loan program called the 203(k) that allows you to purchase a home and fix it up with the same loan.  It’s not very well known because most lenders either can’t do them or just don’t want to do them.   They are more work than the average loan officer wants to do and most companies don’t have underwriters that are familiar enough with them to confidently issue an approval that FHA will accept.  At Republic Mortgage we feel the benefit to the client is so big that we have made the commitment to offer this program.   We have loan officers who have been certified on this program (of course, that includes me) and the staff to get them done.

To read the entire article click . FHA Loan.

If you don't have a fixer upper in mind, but would like to search for one in Tooele, Grantsville, or Stansbury Park stop by our website @ Tooele Homes For Sale. You can search for hundreds of homes or Condos listed in Tooele County and receive photos, prices, maps, directions and tips on buying or sellig a home.

Or you can call us @ 435-840-5029. We'll talk to you about Tooele Real Estate or just about getting an FHA  loan for your fixer upper.