Tuesday, April 21, 2015

Market Hot...But Not Frothy


The real estate market has been in overdrive the past several months.  Homes are selling at an incredible pace, especially in the sub $400K price range.  Inventories are hovering around the 3-month range which is brisk compared to years past.

With homes selling so quickly, there have been some echos of 2006 and 2007.  For those of us in the real estate business, this tends to induce uncontrolled twitching and anxiety.  Having lived through the worst real estate depression in a lifetime, many realtors are still stuffing cash in their mattresses and hoarding food.

So, fearing yet another market belly flop, I decided to do a deep dive into the data and see how our market is really faring.  What I found surprised me, soothed my nerves, and inspired some confidence.  Let's take a look at our first chart regarding house prices themselves.


Since the market bottomed out in 2012, prices have crept upward with a notable surge in 2013.  Since then, prices have plateaued.  Prices are about where they were in the major transitional periods of the first quarter of 2007 and again on the way down in mid 2010.  NOTE: The prices in this chart do not reflect an average or median price but reflect an indexed value (from FHFA data) with a starting value of $100,000 in 1979.  

The plateau in house prices is encouraging since it indicates that the market is not frothy and that homes are being sold based on economic fundamentals like income rather than on goofy hybrid mortgage products during the bubble years.

Yet, another tool I use to measure whether the market is overheated or not is a an inflation adjusted index.  This is a powerful tool which exposes some of the unseen things happening in the market.  Theoretically, if house prices are tied to income as they should be, and all incomes increase with inflation, then if we subtract inflation from the mix we should see house prices as a fairly stable value over time with little or not increase.  If we do see an increase, we know that incomes might be increasing in the county faster than inflation.  This would be a good thing because it means the workforce would be changing to higher paying jobs.  Or, it could mean that there are distortions going on in the real estate market itself like during the bubble years...in this case, weird mortgage products mucking up the works.


     The blue line represents the inflation adjusted price of housing in Weber County.  As you can see, there was a big sag in the 1980's. During this time, Utah was an undervalued market.  That corrected in the 1990's which ended in a slightly frothy 1999 with a recession and real estate market dip that followed.  Since that time, you can see that the indexed value of $100,000 has been a fairly stable point for Weber County.  The real estate bubble is obvious as well.  To give some more detail, lets zoom on in the blue line...


If we assume that the natural price in this chart should be around $100,000, then we have to ask ourselves, why isn't it at that price all the time?  In 1999 you can see the overshoot and market froth.  In 2002 the olympics created a brief period of froth.  Then in 2004-2005 the market sunk into a light recession marked by many short sales and foreclosures.  From 2005 to 2008 we experienced a once-in-a-lifetime real estate bubble. In 2011, the market over corrected on the down side providing lots of buying opportunity.  Since then, the market has returned to what appears to be equilibrium at our $100,000 index mark.

So, what is the takeaway from all this econo-babble?

1.  Your house is worth right about what it should be for a healthy economy.
2.  The next real estate market downturn should be fairly benign compared to the last one.
3.  The market is not overheated despite the brisk sales.  Low inventory is the culprit.

If you are considering putting your home up for sale and want to know what it is worth, CONTACT ME, and let's find out its fair market value.  I promise to spare you of all the econo-babble.  

Monday, April 20, 2015

The Contractor Triangle


With the weather warming up and people wanting to get their homes ready to sell, many folks have improvement projects that need to be completed before they put their homes on the market.

I have renovated many homes and have a lot of experience working with contractors and subcontractors.  When choosing a contractor to work with, make sure you know what you need from the them.


There are three characteristics that every person wants from the work of a contractor or handiman.  They want the work done cheaply, quickly, and at top quality.  Unfortunately, one of these characteristics is always working against the other two. What I have experienced in real life is that you only get to pick two out of the three.

For instance, if you get a really cheap bid, you can expect the work to be quality but slowly done.  If you get an expensive bid on the other hand, you should expect the work to be done quickly and at top quality.  Meanwhile, sloppy work can be done quickly and cheaply.  Keep in mind that you should get at least two of the desired characteristics.  If you are only getting one, you are being cheated.

For work done on our rentals and listings, I always shoot for good quality...even if it costs a little more or takes a little longer to achieve.  In my experience, there is nothing worse than regretting the quality of work done on a project or having to redo it again in a few years due to poor craftsmanship.

So, while you are thinking of fixing up your rental property or getting your home ready to for sale, think about what you want and need out of a contractor.  Make sure you establish your expectations with them in advance and in writing, and then enjoy getting work done without much sweat on your own part.

If you want to know what improvements to make to your home before putting it on the market, CONTACT ME, and I would be glad to do a walk through and give you some ideas so you get the best return on your money.

Friday, April 17, 2015

FOR SALE: Historic Victorian Restoration Project


I recently listed this amazing Victorian home in Ogden.


Located at 640 22nd Street, this beautiful home is a diamond in the rough.  It is located next to the new elementary school under construction and just several blocks from the recently renovated LDS temple, many diverse worship centers, the Junction, the Ogden River Parkway, and Historic 25th Street.   The home has over 1800 SQFT with four bedrooms and two bathrooms.  The home also boasts the original stairway banister, an elegant entry, tall 10' foot+ ceilings (behind a false drop ceiling), original casings and woodwork, and tons of charm.  There is a two bay carriage house behind the home with a fenced yard.  The home is brick construction built in 1898...just after Statehood.  

Unfortunately, the home was subsequently subdivided into a duplex sometime mid-century.  However, putting the home back together should be fairly simple.  To help with the restoration, Ogden City is offering $20,000 to an owner who will reduce the property to a single family residence.  

Here is a video tour of the property so you can get a feel for layout and condition:


I also went and measured out the interior of the building to get a feel for the floorplan. Here are those dimensions for your benefit:



The measurements aren't exact but they are pretty close.  Estimated costs to fix this property start around $40k and increase from there depending on the level of finishes and hardware you want to use.  The property would be worth around $150k-$160k or more depending on the quality of the work done.  Contact me for a current list price for this property.

If you are looking for an opportunity to restore one of Ogden's beautiful historic Victorian homes, this is one you can't pass up.  CONTACT ME if you are interested.

 

Wednesday, April 8, 2015

FOR SALE: Seller Financed Craftsman Fourplex


I just listed this investment opportunity in Ogden.


Located at 2943 Porter Ave., this property is approximately 3200 square feet and hosts four rental units.  The building generates $1900/mo. in rents with the owner paying gas and water utilities.  There is ample paved parking for the tenants.

The owner of this property will sell the property with seller financing.  A 10% downpayment is required and the monthly payment would be approximately $950 (principle and interest).  Taxes and insurance would be additional.

If you are interested in exploring the possibilities with this investment, please CONTACT ME for current pricing.  I can also email you the income and expense spreadsheets.  If you drive by the property, please have the courtesy not to disturb the tenants.  

Thursday, April 2, 2015

FOR SALE: Updated Mid-Century Tri-Level Gem

I recently listed this home for sale in northern Ogden.


Located at 640 E. 1300 N., this 4 bed 2 bath home sits on a spacious .21 acre corner lot.  The property boasts new windows, siding, refinished hardwood floors, carpet, modern style European cabinets, granite countertops, mosaic tile bathroom finishes and so much more.  This home is a MUST SEE!

Here is a video of the home:



The home has 1672 SQFT with a master suite upstairs and three bedrooms in the basement.  The living area has a nicely finished rock fireplace.  You will enjoy the open feel of the floorplan and the fine finishes.  


If you are interested in viewing this awesome property, CONTACT ME, and we can set up a private showing.  

Monday, March 30, 2015

WACKY PHOTO GALLERY: March 2015


I love my job.  Where else would I get to see such interesting things?  Here is today's gallery of oddball house scenes taken as I have been out shopping with clients.


Every spare tire needs a blue tiger themed closet to call its own.

 
It is a little known fact that vinyl billboard prints can also substitute for roofing.



That moment you realize you forgot to put spacers between your tiles before cementing them to the floor.



The love affair with yellow foam continues.  You can never have too much of a good thing.


Introducing (and quickly laying to rest) the innovative but poorly conceived outdoor sticky tile trend.


Storage of last resort.


Hmmm...something just doesn't seem right here.


Glass broken?  Plexiglass not available?  Plywood to expensive? We have a gray tarp and cardboard for you.



"Hey Sweetheart, do you smell something moldy in our room?"


I hope you enjoyed these photos.  With so many homes to look at, there are always surprises waiting to be found.
 

Tuesday, March 24, 2015

URBAN RENEWAL: Ogden's $20,000 Historic Home Grant Program



Have you ever seen some of the classic historic homes in Ogden and thought that it would be a great experience to buy and restore one of these properties?  Have you been discouraged by the fact many of the homes have been subdivided into endless small rental units?  Has the high price of purchasing an "income property" just so it can be turned back into a home been just too much to stomach?

If so, then there is good news for you.  Ogden City has recently been approved to receive special funds from the State in order to promote unit reduction and the restoration of Ogden's beautiful older homes.


The program will provide $20,000 for every rental unit that is eliminated in a property that was built originally as a single family residence.  For example, if the home is a 4-plex, $60,000 would be available to the buyer to renovate the property.  If the home is a duplex, $20,000 would be available to pay for the conversion.


Here is how the program works:
  1. You need to be an owner occupant, meaning that you intend to live in the home when work on the home is complete.  
  2. You need to make an offer on a multi-unit home that is located between 20th Street and 27th Street and Washington Blvd. and Monroe Blvd.
  3. You need to fill out the city application and worksheet to make sure there are sufficient resources to complete the project.     
  4. Close on the purchase of your property and begin work!  
There are plenty of properties in the target area for sale to choose from.

If you would like to learn more about this exciting opportunity to restore a historic home, CONTACT ME, and I can get you all the city forms and details on the program.

Saturday, March 21, 2015

OGDEN RISING: Tearing Down and Building Up


Ogden continues to be a city with momentum for change.  Here are some recent developments which you may find interesting.

Downtown Marriott Courtyard


The Hotel located on 24th Street between Grant Ave. and Lincoln Ave. has been through some significant changes over the past several years.  Operating as a Marriott Hotel until around 2013, the hotel fell out of compliance with the franchise standards. The REIT that had possession of the property at that time wanted to keep it in their portfolio due to its profitability.  They rebranded it the Summit Hotel and continued operations.  Finally, over the past year, the property has been completely remodeled on the interior.  It has recently been rebranded as a Marriott Courtyard.  Part of that rebranding means the property will actually need a courtyard. So, demolition began recently to remove the west wing of the hotel to make space for a courtyard and additional parking.  As can be attested by area business owners, downtown is flourishing and parking is at a premium right now.  This will be a great change for the Historic 25th Street area.

The River Project



The latest in the River Project area is a large luxury apartment complex that is being constructed between Grant Ave. and Childs Ave.  at 20th Street.  I was present for a Planning Commission meeting over a year ago when the developers made their pitch for this project.  It looks like they were able to get the approval they needed.



The finished project should look great.   That large nearly finished structure you see in the background there is a new juvenile court building.

There are other projects going on in the city as well.  I will have more to write about those in the near future.


  

Wednesday, March 18, 2015

FOR SALE: Commercial/Residential Classic Craftsman Home


I just listed this fantastic property located at 750 Washington Blvd. in Ogden, UT.


The home is a giant 3248 SQFT with 4 bedrooms and 1.75 bath.  The basement is partly finished with a mother-in-law kitchenette and could be configured into additional bedrooms and/or living space.  The area is zoned C-2 and the building could make an excellent office or place to house your business.


The home has original oak hardwood floors.  Though much of the home is carpeted, the hardwood floors are intact beneath.  Parking is along the side driveway of the home, or there is access via an easement off 7th Street to park in the back of the home.

Here is an extensive video montage of the home and exterior:


The home as so many vintage original features from 1913 including the clawfoot tub and radiant heat.  A little restoration work would make this property sing.  

  

If you are interested in this property, CONTACT ME, and we can set up a private showing.

Tuesday, March 17, 2015

NEW LAW: Basement Window Egress Equality



The 2015 General Session recently wrapped up and I am happy to report my bill to create window egress equality for older homes was passed by both the House and the Senate.

I wrote about the need for the bill in January prior to the Session beginning.

In a nutshell, if you own an older property that has basement bedroom windows that were in accordance with code at the time the basement bedroom was constructed, a city or county cannot force you to alter your window size to bring it into compliance with current building codes.  The idea being that if the window was good enough back then, its good enough today.  We don't need government forcing owners to retrofit properties at their expense to accommodate an ever changing and ever more rigorous building code.