Wednesday, May 28, 2008

Flashback: The Shupe Williams Candy Factory Fire

A couple years ago my brother-in-law called me up and says,"Hey you gotta come see this fire. The old candy factory is burning." It was really late and I had church the next morning. I told him I wasn't interested and that I had seen house fires before. He wasn't satisfied with my answer and continued, "No. You have GOT to come see this...I will pick you up in two minutes." I had no choice at that point.

The video below is from March 11, 2006. I am filming. Prior to this date there had been a great debate in city hall about the future of the building. The factory was a city landmark and very cool. It was in serious need of restoration. Unfortunately, it was also located directly next door to the local homeless shelter. They were booked up and it was a cold night. Someone started a fire on the second story to stay warm. Click play to see how it turns out.

Tuesday, May 27, 2008

Ogden City Documentary

The Standard Examiner has a clip from a very cool documentary that is set to air on television shortly. My wife and I own the DVD. I would suggest picking up a copy.


Thursday, May 22, 2008

A Dramatic Return to Stable House Prices

OFHEO published its MSA quarterly appreciation numbers today. Here is a snapshot of the Utah Market.

In this chart anything above 0% represents house prices increasing and anything below 0% represents declining house prices overall. The measurement is for appreciation based on house prices a year from when the measurement was taken. For example: Todays OFHEO report for Q1 2008 shows that Ogden appreciated 6.64%. That means that house prices in the Ogden area market (Ogden-Clearfield MSA or better interpreted as Weber/North Davis areas) are 6.64% higher now than they were back in the first Quarter of 2007. That is down from our peak year-over-year reading of above 15% recorded in the beginning of 2007.

The way I read this is that house prices are returning to the regular flat pricing period that traditionally follows our boom cycles. Home prices very rarely decline in our market, they just follow inflation (which has been low for a long time until now) and wait for the next surge in pricing.

So what does this mean for buyers and sellers? Keep in mind that for a homeowner to sell thier home they need about 10% equity in order to pay for marketing and title expenses and any possible seller concessions that normally arise in a buyer's market. Based on this chart, if you bought your home in March 2007 with 0% down you would not have enough money to cover those expenses. That means that unless you put money down on your home you would need to wait for another year or so for your home to appreciate so you didn't come to the table with money out of pocket when you sold the home. Of course, if there is a hardship, short selling the house may be necessary in order to prevent it from being taken back by the bank. We are actually seeing more of these types of transactions in the marketplace right now.

If you have owned your home for more than 18 months (and not refinanced it to the hilt!) then you can still sell your home with ease. In fact, if you are patient, you can find yourself a terrific bargain and actually increase your equity position significantly with the next home. There are great bargains out there for "Scratch-and-Dent" homes.

I have a client who was patient and we were able to him a fantastic bargain on a home. In this particular case, the home is 5 years old in Layton. The list price was at $220K as a short sale. Comparables in the area were $280K. The bank ultimately accepted a price of $230K. That is 50K instant equity for my client! The home needed new carpet and paint. Not a bad deal at all. I will post the information on this deal a little later.

The bottom line is that regardless of what the market is doing, its always a good time to purchase real estate. You just need to know what to look for and have a highly competent agent show you the way.

Friday, May 16, 2008

ECB's Wild Ride

Recently, I was looking at market data for the last couple of months for the Downtown Ogden area. It seemed to me that sales were very low for this time of year. Rather than just scratch my head and move on to something else, I started doing the research. Here is sales volume for the East Central Bench Historic District in Downtown Ogden for the last 4 years.

Winter months are blue. This is an interesting least to me. I think its interesting because this chart defies the normal seasonal cycle that you see in the county based chart from the earlier post. One thing you can see is the huge surge from the summer of 2007 followed by a complete drop off. March and April 2008 sales volume are the lowest in at least 4 years. I will have to go back farther in the data to complete this story.

What are the reasons for the drop off? I believe that due to ECB's non-traditional (i.e. bread and butter suburban style) housing supply, the market in this neighborhood is affected differently than the overall marketplace. Investors make up about 50% of the home owners in this neighborhood. Its reasonable to assume that they are therefore 50% of the buyers in the marketplace. The marketplace is also attractive to those with less than stellar credit. They can purchase an affordable home and still have payments that make sense for their incomes. Since August both of these buyer categories have been under assault by the banks. I believe this explains the significant decline.

I will put another chart together later that shows price movement over this period. From what I saw while mulling through the data it has made some amazing changes for the better over the last 4 years. Stay tuned for that info.

Saturday, May 3, 2008

Picture of the Day

I found this sign on the 500 Block of 23rd St in Downtown Ogden. I couldn't have said it any better myself.