June 2007 Home Absorption - Salt Lake City Real Estate

  1. Jennifer Steck

    How much inventory is considered a seller’s, neutral and buyer’s market or do they just consider the direction? This is great information.

  2. Keith Jeppson

    Thanks for the visit Jennifer. I updated the post to explain NAR’s interpretation of each market.

    4 months and below - Sellers Market
    5-6 month - Neutral market
    7 months and longer - Buyers market.

    This has been the stat clients seem to like the most. We use it with every listing for setting prices and every buyer when preparing offers. It is very powerful.

  3. Salt Lake Speaks » Blog Archive » Salt Lake City Real Estate - Home Sales June 2007

    […] The average home price in Salt Lake City continues to increase despite continually dropping sales volume and increasing inventories. The number of homes sold during the second quarter are 20% lower than the 2nd quarter 2006 and and 25% less than the 2nd quarter 2005. The number of listings available continues to increase with the absorption rate (the number of months it would take to sell all current listings) now at 6.8 months and growing. It has clearly moved from a balanced market to a buyers market. […]

  4. DR

    With tightened credit and higher rates where are all the buyers going to come from? Real estate in Northern Utah has peaked in price and my even depreciate like the rest of the country–sure the job market is good but my paycheck hasn’t increased 20% like house prices have in the past year. I see to many overpriced listings. A good relestate agent should price to what the market can bear not to last years prices which are out of alignment to Utah’s wage structure.

    http://tinyurl.com/2kk5et

    I’m not in any hurry to buy……….

  5. Keith Jeppson

    DR, thanks for your comment. You make some great points but I don’t agree with all of them. Prices don’t seem to have peaked in all markets. For example, Salt Lake City has increased another 10% during the first 6 months of this year. Yes, units sold has declined and prices usually follow volume, but that doesn’t seem to be happening.

    I believe the reason is the strength of the Utah economy and the growing local job market. Despite those positive factors, my gut tells me we may see some softening in prices across the valley in the coming months. Increasing absorption rates will eventually overcome the strength of the labor market and soften prices.

    The tightening of credit and mortgage programs is also having and will continue to have an impact on the market. Especially on subprime and first-time borrowers. I’ll be writing a post on that this week.

    Regarding where a good agent will price a home. An agent has a fiduciary responsibility to get the most they can for a seller. They don’t price based on last years sales. I’m not sure where you’re getting that from. The must look at current local trends, market direction, current competition for the home, and the features and condition of the home.

    Lastly, I pay limited attention to national market conditions. National trends are important for reference, macro-economic impacts, and to benchmark against our local market. But, the key indicators are local.

    Again, thanks for your comments.

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