Yesterday there was an article in the Herald Journal that had a pretty negative tone about the Logan Utah real estate market. It quoted me, and apparently riled up a bunch of local real estate agents. They called the local Realtor Board, and complained about the comments I said.

Personally, I didn’t think that the article was that bad. It stated the facts, and explained some of the reasoning of why home sales in January were so low. Sometimes we have to face the reality. We can’t sugar coat everything. The article came across more negatively than I would have liked, but lets face the facts. A journalists goal is to get their articles read, and striking headlines are more often read than boring sales statistic numbers.

With that said, If you price your home right, it is actually a good time to sell for several reasons. One thing to remember is that you only need to sell your house to ONE potential buyer.

1. Buyers Have Urgency - There are lots of potential buyers out there who have a sense of urgency to buy. The home buyer tax credits require that homes go under contract by the end of April. Mortgage interest rates are likely at the lowest they will ever be. Many people realize this, and want to take advantage of mortgage savings.
2. Great Time to Upgrade - There are lots of deals out there if you are looking to upgrade. The deal you get on the house you upgrade to can far exceed the loss you would take on the sell of your house. If you lose $5,000 on the sell of your house, but get $25,000 in equity on the home you purchase you have a net gain of $20,000. The low interest rates and great deals on homes for sale in Logan have personally tempted me into possibly upgrading.
3. Spring is in the Air – Spring is traditionally a huge season for looking for homes for sale in Cache Valley. New potential buyers are starting their home search every day. Remember, they are only going to be buying one house. There are also lots of buyers out there who have seen everything currently on the market that matches their criteria and are looking for something better. They know that lots of new listings are coming out each day and are waiting to find the best home possible.
4. It is NOT a Buyers Market for Starter Homes - Homes priced below $161,000 are actually selling at balanced market paces. Many have multiple offers. It is not a buyers market at all for the less expensive properties for sale in Cache County. Cache Valley home prices between $160,000 and $180,000 are also selling at almost balanced market paces.

There are many good reasons to sell right now. Another reason, especially for those really high end homes, is that home prices might keep dropping. You may be able to get more out of your home now than you will be able to next year. We just don't really know for sure.

In this video Robert discusses what closing costs are when buying a home.

When buying real estate, your closing costs are primarily associated with the fees of getting a mortgage loan. These fees include a mortgage origination fee, processing and underwriting fees, the cost of the appraisal, and the cost of title insurance for your lender.

Another thing that can be considered with the closing costs are pro-rations. Lenders require that property taxes and homeowners insurance are collected and payed by them. They require that the escrow account has some money in it at closing. This amount will vary depending on the time of the year, and whether or not the seller has already paid property taxes for that year.

You will also have a small closing fee from the Title Company you close with. In Cache Valley, this closing fee is usually around $100. If you buy a home with cash, the actual Title company closing fee may be the only fee you actually have to pay.

One thing many buyers do to reduce the closing fees they will actually have to pay is to ask the sellers to pay for their closing costs. Essentially, this just wraps the closing costs into the mortgage loan so they can be paid over an extended period of time. This is beneficial for buyers who don’t have a lot of extra cash on hand when they purchase a home.

A rule of thumb is to expect closing costs of about 3%. Of course, these costs will vary based on the lender you’re using, the amount of your down payment, and the time of year you buy.

One thing to note in the different closing costs is that there is no fee for using a real estate agent. That’s right, when buying real estate, most agents don’t charge you anything. Their commissions are paid by the sellers.

When selling real estate your primary closing cost is your Real Estate Fee. Another big fee you have to pay is for title insurance. You are required to buy a policy of title insurance for the new buyer.

There is another new Federal Government program out their designed to reduce the consequences and liability of people trying to avoid foreclosure by selling their homes as short sales, or else voluntarily giving up their homes with a Deed in Lieu of Foreclosure. This program is called the Home Affordable Foreclosure Alternatives Program. Say that five times fast.

This program will be implemented on April 5th. It is supposed to “streamline” the  short sale process, and remove the ability for banks to seek a deficiency judgement for the amounts they are actually owed from the borrowers. According to the official HMPadmin website:

The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures.

With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.

HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation.

More details are available at this the official site: HMPadmin: Foreclosure Alternatives.

In some ways I like the sounds of this program. As a real estate professional, anything to reduce short sales would be awesome, and would be especially beneficial to buyers. There are currently a lot of homes for sale in Utah that need short sale approval. It is also good for sellers in financial distress, and can help many of these to avoid actually having a foreclosure.

However, I don't like the fact that government is telling people that they can get a free ride. That they are no longer responsible for the debt they willingly took on.

Changes to the Utah MLS

For those of us in the Real Estate world one of the big changes happening this week is the conversion to a new MLS. While this mostly effects the way Realtors do things, it will also have an impact on home buyer’s abilities to query and find Logan Homes for Sale online by giving them more flexibility to find what they are looking for.

Here are some of the new features that will happen to the Realtor MLS, and might also then create additional features on our IDX search for the general public:

New Map for Locating the Property’s location – This time it’s google maps that the agents can actually control, instead of five year old out of date maps. This should help with the IDX feeds, that always seem to be in the wrong place. If you’ve used our real estate map search, you know what I’m talking about. Real Estate agents can also use GPS coordinates. This will be great for trying to find rural properties out in the boonies.

It will be interesting to see how many of these changes and individual search queries they will allow to be used on the Public sites... Either way, if you're looking for something specific, Your Realtor can set things up to automatically email you new listings that exactly match your search criteria.

I conduct market condition stats for Logan Real Estate during the first part of every month.  One of the things I pay attention to is the number of homes for sale in Logan Utah. This number has more significance on future pricing trends than anything else. It is simple economics. When there are more homes and less buyers, prices will go down. When there are more buyers than there are homes for sale, prices go up. While doing some statistics today to calculate the percentage of short sales in Logan, I noticed that there are currently 747 homes for sale in Cache County right now.

Just two weeks ago, there were 718 active residential listings in Cache County. That%u2019s a net list vs. under contract of more than two new listings a day. At the rate we are going, we will likely see a record number of homes on the market, and will see more than 900 listings at once by the time summer hits.

In comparison, last  year Cache County had less than 700 homes on the market. February of 2008 had 514 homes listed, and February of 2007 had around 400 listed homes, almost half the number we have right now.

It is possible that many of these homes were listed by people who want to take advantage of the move up tax credit. If this is the case, after April we may see a reduction in Logan Utah Real Estate inventory.

If inventory doesn't go down near the expiration of the tax credits, there will be price drops for Cache County Utah Real Estate.

I listened to a podcast last night on voluntary foreclosures. It was interesting. With a voluntary foreclosure, the borrower elects too let the home foreclose, even though they can afford to make payments because they have so much negative equity.

Strategic defaults are especially popular in areas like Arizona, California, and Nevada, where home values shot up, and then plummeted down in a matter of years. People who bought during the peak have literally seen hundreds of thousands of equity lost in the flighty real estate market.

For people in this situation it becomes an economic deal. They can quickly purchase a new home for half the price of their current property, then stop making payments on the home that they owe far more than it is worth and let the bank take it back.

States like Arizona actually have laws that banks cant seek deficiency judgments for foreclosures, regardless of the reason.

My question is, is behavior like this ethical? These borrowers signed a note where they committed to pay back this mortgage loan. They agreed to these terms.

In my opinion it isn’t ethical. The bank never did them anything wrong, the owners are the ones who agreed to pay back the note when they signed it. Making banks lose $100,000’s of thousands of dollars by strategic default isn’t much different than armed robbery. Either way, the banks are going to lose money they are entitled too.

It's crazy that letting a foreclosure happen on purpose is something people now consider. It really shows how times have changed, values have changed, and the perception/stigma of foreclosures is so much different than it was in he past. It seems so much like society now considers foreclosures he banks fault, rather than the fault of the borrower who committed o pay back a loan.

Cache Valley Short Sales Remain Stable

For the third straight month there are exactly 47 short sales in Cache County Utah. 13 of these short sale homes are found in Logan while the remaining 34 are found in the outlying communities in Cache Valley. While the number of short sale homes for sale has remained the same, the percentage of Cache County homes for sale that are short sales has actually declined, because the number of total residential home listings has gone up. There are currently 747 active residential listings in Cache Valley, meaning that 700 of the homes for sale are not short sales. 6.29 percent of the current listings are seeking short sale approval.

Click this link if you would like to view the current short sale homes for sale in Cache Valley.

Home values in Cache Valley are staying pretty steady. The price declines are gradual enough that Cache County isn't seeing the high numbers of short sales that other parts of Utah County have.

Real Estate in Weber County Utah started out really slowly to begin 2010. Unofficially, January posted just 116 residential home sales. This is down by more than 10% from January of last year, which was also a bad month for number of home sales. This is the lowest single month of total home sales since 1997, when I was still in high school.

The number of homes for sale in Weber County also went up during January. At January’s slow pace of home sales, Ogden Real Estate has an absorption rate of more than 19 months. There are currently 2,108 homes for sale in the Ogden area.

Prices of Homes for Sale in Ogden continue to drop. The current median price of Weber County Real Estate listings is $174,900. The average list price of Ogden Homes for Sale went up last month, it is now at $236,036 (28% higher than January’s average sales price of $168,446)

Of the two counties I've done market stats for thus far this year, it's looking like January is suffering from a serious Government stimulus end hangover. If the stimulus wasn't extended, I wonder how much slower the home sales would be. It's a good thing they extended it so it will end during summer when home sales are traditionally stronger, but after having a strong April, I bet we'll have the slowest May for home sales that we've seen in years.