From boom to bust, Washington County real estate market back on rebound
Washington County's real estate market, which fell apart in 2006 after an extraordinary run that attracted national attention, is struggling back to health.
Driven by a revived Utah economy and record low interest rates, sales of existing single-family homes have been moving up since they bottomed out in 2008. Foreclosed and short-sale properties have all but dried up, real estate agents say.
New construction, which reached its nadir a year later, is bouncing back, too. Even prices, which lagged behind the recovery of sales, are coming back.
It isn't a stampede yet, but all signs point to better times in Utah's Dixie.
"Oh, absolutely," said Ryan Andersen, an agent at ERA Brokers Consolidated in St. George.
"In Washington County, we have probably only 20 bank-owned properties left. A lot of people are no longer upside down [in their mortgages]. The biggest problem we have in our market today is getting enough properties to sell," he said.
Just seven years ago, Washington County was one of the hottest real estate markets in the U.S. Fueled by a population boom and the easy lending policies of some local banks, more than 4,200 homes were sold in a county with fewer than 45,000 households. When the collapse came, it hit hard. By 2008, with the Great Recession in full bloom, sales had fallen by more than half from their high in 2005, according to Washington County Board of Realtors figures.
Prices shriveled, too. The median price of homes sold in the county fell from $265,000 in 2006 to $159,300 in 2011 a 40 percent decline.
All that pain hasn't been forgotten, real estate agents and builders say. But it is being replaced with a noticeable good cheer that wasn't easy to detect two years ago.
"All indicators for us indicate things are getting better; not in a shooting upwards trend, but things do continue to get better in a very managed, consistent, steady way," said Jair Almarez, who manages Salt Lake City-based Ivory Homes' construction business in St. George. Last year, Ivory Homes sold 31 houses in St. George. This year, the company expects to sell 47 in two subdivisions on the city's south side.
Demand is greatest for homes priced under $300,000; it is close to blistering for houses in the $150,000 to $200,000 range, agents say. A house priced under $200,000 will sell in a week, Andersen said. There is just a 30-day supply of homes for sale priced above $200,000 and below $300,000, he said. In all price categories, the supply is less than six months which is where it was at the market's high point. By contrast, there was a 17-month supply of homes for sale in the fall of 2008, according to the Board of Realtors.
Deby Bauer, a Re/Max Associates agent who works only with buyers, said most of her clients have resorted to building new homes because the inventory of existing houses is skimpy. Anything priced correctly sells in just a matter of days, she said.
Most of her clients are new to the county. Some live in northern Utah. Others are from foreign countries. Recently, Bauer showed houses to a couple from Sydney, Australia. Apparently, they liked what they saw. Bauer said the couple flew home to put their house in Sydney up for sale. They will be back as soon as they find a buyer, she said.
Right now, Bauer has 15 clients who have contracted to buy homes in the St. George area.
"That's definitely up from where [the number] was a year ago for me," she said.
By most accounts, prices for new and existing homes have jumped significantly. In the first half of 2013, the median sale price averaged $195,000 a 20 percent gain over the same period of last year. Many of Bauer's clients are setting their sights on higher-priced homes. Last year, most didn't want to go above $200,000. Today, they are shopping for homes priced at $300,000 and above, she said.
"They feel comfortable with the economy. They are also seeing a quicker return on their investment because of the continued price increases of our properties here," she said.
There was a small dip in sales in 2012, but agents think the 2.7 percent decline in the number of houses sold was an anomaly. Last year was the only year since 2009 that didn't see a rise. And so far this year, sales have rebounded smartly. If the pace holds up, 2013 sales could rival 2006, when more than 3,200 units changed hands.
"I don't see any reason this recovery has to stop, unless and until values get out of reach for the average buyer," said Jeremy Larkin, who owns the Larkin Group real estate firm.
That's not likely to happen because banks have imposed more restrictive lending practices, Larkin said.
Washington County home sales, prices rebounding
Median sales price
2004 • $165,000
2005 • $228,000
2006 • $265,000
2007 • $249,000
2008 • $220,000
2009 • $190,000
2010 • $169,900
2011 • $159,300
2012 • $169,700
2013 (through June) • $195,000
2004 • 3,951
2005 • 4,234
2006 • 3,243
2007 • 2,696
2008 • 2,063
2009 • 2,573
2010 • 2,853
2011 • 3,149
2012 • 3,065
2013 (through June) • 1,834
Source • Washington County Board of Realtors