SALT LAKE CITY — After an unseasonably cold winter, the much-anticipated warm spring weather is expected to heat up Utah's housing market, adding momentum to a housing recovery that's already well underway.
Home prices in the Beehive State increased the last three quarters of 2012, and Salt Lake City was among the nation's top 25 cities experiencing home price increases last year. In January, residential real estate website Trulia listed Salt Lake City among the nation's booming housing markets, alongside San Francisco, Seattle, Denver, and San Jose, California.
Meanwhile, growing consumer confidence and record-low interest rates are luring more would-be buyers to step up their house-hunting efforts. The national Consumer Confidence Index rose by 11.2 points to 69.6 in February, higher than last year's average of 67.1. And the Zions Bank Consumer Attitude Index for Utah increased for the third straight month in February to 79.9. The latest data from the Federal Deposit Insurance Corporation show that bank lending is also on the rise, growing 1.6 percent in the fourth quarter of 2012. It was the sixth increase in seven quarters.
As spring approaches, industry experts say the melting snow and parting clouds will give the housing market an additional boost.
"Local weather patterns have a big impact on when people search for homes online. If it's too cold or wet to check out open houses, people search less online," said Jed Kolko, Trulia's Chief Economist. "In general, people search more online when it's warm and dry outside."
In Utah, April is the busiest month for online real estate searches, according to Trulia's analysis of home searches from 2007 to 2012. It kicks off the peak spring and summer seasons, traditionally the busiest time for residential real estate, when the weather tends to be more cooperative and families with school-age children can avoid a mid-school-year move.
In 2012, a combined 9,875 homes sold in Utah during April, May and June, compared to 7,359 home sales during January, February and March. Similarly, the sizzling months of July, August and September 2012 resulted in 10,171 homes sold in Utah, compared to total of 9,076 homes during their colder counterparts of October, November and December.
If you are in the market to sell your home, buy a new one, or refinance an existing mortgage, start planning now to effectively navigate the spring real estate rush.
To take advantage of the upswing in spring real estate activity, start doing the necessary legwork to get your home listed in time. Now is the time to check for repairs, clean and paint. Do your homework in interviewing and selecting a real estate agent who understands your needs and you can trust. If you're going the "for sale by owner" route, plan on spending extra time to find a title agent, and possibly an attorney, and to show and market the house. Increase your selling power by sprucing up the yard, clearing out the clutter inside, and placing fresh flowers around the house as a finishing touch.
Home prices have retreated to 2002 and 2003 levels, with 50-year highs in affordability. It's a great time to consider homeownership, but see that you are realistic about your budget. Consider meeting with a mortgage professional who can answer your questions and give you a nonbinding prequalification or preapproval for a loan. Once you have identified potential properties, visit them at different times during the day and different days of the week to get a better of natural lighting, sun exposure, and the surrounding neighborhood.
The loan process can take anywhere from 30 to 45 days, depending on how quickly application information can be documented and verified. When applying for a mortgage, be ready to provide documentation to your lender, including employment information, recent pay stubs, W-2 forms, bank statements, and other asset information.
With interest rates on residential loans at their lowest level in 60 years, refinancing a home mortgage is a good option for many people. Refinancing, which is essentially paying off an existing loan with the proceeds from a new loan, can help you lower your monthly mortgage payment, pay off the mortgage sooner, and reduce your overall mortgage interest expense.
When deciding whether to refinance, consider your total after-tax interest savings, the net cost of closing fees, and how long you plan to be in your house. Calculate the amount of time it will take for your overall savings to offset refinancing costs. Keep in mind that refinancing usually costs a percentage of the loan's principal and, as with obtaining an original mortgage, often requires appraisal, title search, and application fees.
To qualify for a home mortgage refinancing, you'll generally need a solid credit score and some equity in your home.