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Saturday, January 10, 2009

Prices Continue Plateau

Many people have been concerned about where prices are headed. I have told my clients that prices will likely flatten out for a period of several years before springboarding back up with appreciation. This has tended to be Utah's real estate cycle for at least two generations now. I have attached a chart showing what $1 invested in real estate in 1985 would yield you today. The line shows you what the value of that dollar would be today when adjusted for appreciation. The appreciation data used comes from the Office of Federal Housing Enterprise Oversight.



As you can see, there have been some periods of price depreciation, however, they have been very shallow and for relatively short duration.

You will hear stories of hugely discounted homes. These homes will be distressed property. These are REO, bank owned, short sale, and highly motivated sellers. Keep in mind these homes also make up a very small percentage of the total market. Retail homes will still sell for full price, it will just take longer to sell them. Distressed property will sell more quickly at a discount.

This is a great marketplace for buyers. Sellers must be patient. However, that patience can be rewarded handsomely when purchasing another home.

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