Call it the state of real estate in Southern Utah, as homeowners, sellers and buyers attempt to adjust to a settling market after record appreciation took the nation by storm three years ago.
In particular, St. George, Cedar City and the second-home market in Duck Creek all have experienced their own level of change, although those adjustments haven't been as drastic as experienced in other parts of the country, primarily because the downturn in prices has been followed with an upswing in buyers.
About a year ago, some buyers found their homes worth less than what they paid for them, and some sellers kicked themselves for not selling when the market was at its peak.
With the downturn came foreclosed properties, more realistic pricing and an educational process that has seen some real estate agents leave the market only to return to their previous jobs. Rather than hang on until the market reversed itself, some owners have chosen to simply let their homes go into foreclosure.
"We just got a notice the other day advising us to watch for foreclosed homes with pools that can now go bad without maintenance," said Ronnie Vause, a 36-year veteran of the real estate market. "With situations like these come health problems and all the rest that can go with foreclosures."
However, the current housing market isn't all doom and gloom in Southern Utah, although Washington County building permits are expected to be only 600 this year compared to a projected 1,200, said H. Allen Carter of Southern Utah Title.
St. George
"We didn't err in our calculations," Carter wrote of the figures that are at a 20-year low. "We simply underestimated the quantity of foreclosures and the speed with which lenders would bring the gavel down. With a current growth rate in Washington County of about 3.5 percent, approximately 2,000 new families will locate here this year. As each family makes its search for nirvana, pricing will likely be the driving mechanism and determinant for most purchases."
While new home construction has slowed, the doors have been opened for the resale market.
Opportunistic buyers are taking advantage of the market's lower prices while sellers come to grips with the reality that their home is worth less than it was three years ago, in most cases. Washington County prices dropped from an average of $339,135 in 2006 to today's level of $219,140, and while some might have scurried away, still others look at the current situation as an ideal opportunity.
"I'd say that home sales are picking up from what they were a year ago, but they're selling for less," said Vause, a native Las Vegas resident who moved to the St. George area almost four years. "The downturn caught a lot of speculators by surprise, and most of them are facing losses because of it. That said, the old phrase 'There never has been a better time to buy' holds true."
During the boom, St. George saw its share of an influx of buyers from across the nation, explained Vause. The silver lining with the decline in prices is that buyers are starting to get off the fence after such a long period of escalating prices.
"As the market heated up in Vegas, it also heated up here," Vause explained. "On a percentage basis, we fared about like Vegas did, although we're a much smaller population with a much smaller realtor population. Nevertheless, we saw prices go up while supply was at a minimum, making prices increase even more. St. George became a haven for investors."
Vause said St. George doesn't appear to have been hit by the foreclosure market as bad as Las Vegas.
"We have had some turmoil, the result of the credit crunch," he said. "The experts a few weeks ago said in a few months, we will all look back and say we hit bottom in April. I'm licensed in both cities. I am finding out that St. George is somewhat affected, but it doesn't appear as bad as in other parts of the country.
"I think the real estate market was a little bit more prepared here," Vause continued. "The buyers and sellers simply used their heads more here. For the most part, St. George isn't as much of a get-rich-quick community. People come here for a better life and not so much to make a quick buck."
Cedar City
Cedar City has gained activity in real estate over the past six months, said Ron Ragona of Century 21 First Choice Realty.
"My people have sold some of their homes out of state and are now relocating to this area," said Ragona, who has been in real estate for six years after living in Las Vegas for 40 years. "Prices have dropped up here in the last year. Some of the expensive homes have dropped 20 to 25 percent, while some of the lesser expensive homes have dropped, too, but not as much. We don't have the foreclosures up here that other cities have. It's just not as extensive as in California, Florida or Las Vegas. We didn't have some of the inventory that some cities had in 2004-2005.
"For the most part, we didn't have the magnitude of investors like they had in Vegas, California or Florida," Ragona continued. "Some people are starting to take advantage of both lower prices and lower interest rates. For someone from out-of-state, Iron County remains a great investment opportunity. This whole area is a baby boomer area."
Steve Bailey of Prudential Cedar City said numbers are about the same this year as last year's total for six months.
"The sales price is down," said Bailey, who has been in real estate in Southern Utah for five years. "Foreclosures are actually very low in Cedar, and a lot of them were for manufactured housing. People felt they could walk away from a manufactured home."
More Cash
Linda Mattson, a marketing director for Terra Title in St. George, said Southern Utah is starting to see more cash buyers. She said there have been more foreclosures recently, but the key is educating the owners to know how to pull out of a bad situation.
"We are beginning to see more cash buyers as this is a great time to buy affordable properties," Mattson said. "We are also seeing more foreclosures, but there are some loan programs in place to help owners get out of a bad situation. The Federal Housing Authority has implemented a program to help borrowers that are in sub-prime adjustable mortgages to be able to refinance into an FHA loan."
Mattson also said the Washington County Board of Realtors has posted valuable information at www.sgtrends.com.
Duck Creek
Duck Creek, which is about 30 miles east of Cedar City, has seen a downturn in activity for second-home residences, said Jerry Koller of Duck Creek Realty.
"I'd say that sales fell as much as 75 percent," Koller explained. "We noticed the change beginning in June of '07. Since our market is directly related to Las Vegas, people are a little apprehensive about investing in the real estate market at the present time. People up here need to be more realistic with their sales prices. However, most people still haven't lowered their prices. We don't have any foreclosures yet, but there are some people who have problems."
Koller said sales have been in the upper price ranges from $600,000 to $1.2 million.
"We have a lot of stuff up here in that price range," he said. "Two years ago, cabins in the price range sold before they were ever completed. Now, they have been sitting on the market for three months. We need buyers. That's for sure."
"The people who do have a lot of money have not been affected as much by the market," added Koller. "They know real estate is a tangible item, and they want to enjoy themselves before they die."
Koller said he is seeing more buyers during the summer. He included baby boomers among those looking for getaway homes.
"I hope that by the end of the summer, there will be another upward trend," he said. "This area is the closest quality getaway place for people from Las Vegas. There is all of the quality in the world for relaxation and recreation."
Cindy Allen, of Coldwell Banker Majestic Mountain Realty, said that while sales have picked up, sellers are coming down on their prices.
"It is definitely a buyer's market up here now," she said.
Mike Henle is a Las Vegas-based
freelance writer and
author of the book “Through
the Darkness: One Man’s Fight
to Overcome Epilepsy.” He can
be contacted at mhenle@aol.com or through his Web site
www.mikehenle.com.
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