This article not prepared by City Weekly Staff
It’s less than a week before everyone’s taxes are due to Uncle Sam, and folks are already calling me, saying, “My accountant just told me I need to buy something and quit paying all these taxes. Is it a good time to buy?” Or, “Can we sell now? We can afford a bigger house!” Let me share with you my own statistics I’ve been keeping in my head.
Sales figures are up almost everywhere in the state. If you live near oil and gas exploration, you know it’s hard to even find a rental these days, right? It’s hard to believe that sales in Salt Lake City have been up 30 percent, 40 percent in the past few months, when everyone can see that there are a million foreclosures and short sales sitting on the market. And Utah still ranks as one of the highest foreclosure states in the nation, yet sales figures are huge right now.
Here’s what I think is going on: 1. Investors are buying up all the distressed inventory they can get their hands on. They have the time to wait out short sales and can buy foreclosures with cash. That fact alone is what represents the really high sales figures we’re experiencing right now. 2. Investors are either flipping the properties by doing quick makeovers on them or are holding them as rentals. I saw an example of this the other day at the car wash when I ran into a friend who buys these kinds of properties. He showed me his iPad app, where he was watching 30 property bids of his at the same time.
OK, so if all the distressed property is being bought up, what does that do to prices? Higher demand equals higher prices, right? Good time to sell? My humble observation is that the investors are buying up 80 percent of the inventory, and the 20 percent of what’s left for the primary homebuyer is stale inventory that’s been on the market too long because it’s overpriced. The investors are driving prices down, which is reflected by the Salt Lake Board of Realtors bean counters. We’ve lost another 5 percent of value since a year ago, and numbers are still falling. Investors don’t pay full price for these short sales and foreclosures, and thus your home value is being affected by all the low bidders/buyers out there right now.
If you’re looking to buy right now, it’s good to know what you’re up against—professional investors are your biggest enemy. If a property comes on the market in a neighborhood where you want to buy, and it’s not distressed and priced aggressively, you will get the wonderful experience of multiple-offer bidding at its best. Since the majority of homes for sale are distressed, stale and overpriced, you can see why it’s going to be tough getting a new home or condo without a battle. But working with the right professional Realtor is going to help you achieve your goal—whether you want to buy to save taxes or sell because the market may let you make a small profit.
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