Cache County Real Estate Market Report - January 2011
Posted by Lisa Udy on Tuesday, February 22nd, 2011 at 12:23pm.The Cache County real estate market is struggling like most markets across the US, but there are a few signs of stabilizing. Prices are on the delince as unemployment stays high in our area hovering around 7%. Good news is, inventory levels are decreasing slightly and home price declines are decelerating.
I've also noticed over the last two months quite an increase in housing activity. Interest rates are on the rise, which I think is a contributing factor to the increase in activity, and it will be interesting to see how the housing market fairs if interest rates continue to rise. Anyways, here are the current statistics for the County Cache real estate market:
As you can see with this graph, price per square foot in Cache County has fallen since it's peak of $88 in July of 2008. This is due in large part to the reduced price of newer Logan homes, as construction companies have sliced prices to keep their doors open as new home starts continue to decline.
Another contributing factor of the decline would be the buyers pool. There are many more first time and lower end buyers under the $200,000 mark than buyers of higher end and luxury homes. Lower end homes are generally priced cheaper per square foot causing a skew in the numbers.
In a declining market, days on market is an obvious indicator of a housing slump. The average days on market for a home sold in Cache County has risen quite dramatically. Many home sellers are still pricing their homes to high putting them behind the market. At 199 DOM, for January, it's the longest since the WFRMLS has been keeping track. From February 2006 to February 2008, days on market for home sales never reached above 110 days.
What does an increase of days on market like this mean for the overall health of the market? Bascially, it means there are a lot of overpriced homes on the market causing them to sit longer. There are still buyers in todays market, but they are only buying homes priced at or just below market value. Buyers today want a great deal, and sellers are struggling to price their homes at prices the market will allow.
As days on market increase, sellers are forced to reduce their price in order to find a buyer bringing down the average sold price of homes in Cache County. Average price per home sold in January 2011 was around $174,000 compared to January of 2010 at $160,429. Of course, Januaray of last year was one of the worst months we've ever seen in for average sold price.
Average sold price is difficult to gage as homes sold vary so wildly from the cheaper 100k homes to homes priced well over 300k. One thing we can gain from this number however, is that we're down overall from the peaks of 2007. Average price of a sold home in January 2007 was $197,000. The higher end homes above 250k just aren't selling like they used to due to tightening lending standards and a decreased buyers pool.
Home sales in January 2011 are up 18% from January of 2010. There were only 39 homes sold last year compared to 46 this year. Looking at this graph, it looks as though home sales went off a cliff after June. But, this is skewed and you should keep in mind that the first time home buyer tax credit expired at the end of June causing buyers to rush to the buying scene in order to qualify.
Overall, the Cache County real estate market is sputtering, but we aren't as bad as many other areas across the nation. Signs point to decreased home prices continuing, but as I write this, we have less than 700 homes active on the market. We haven't had so few homes since 2008, and less inventory means more demand, so hopefully the trend continues.
If you have any questions about the Cache County real estate market, please feel free to contact us.
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