3/01/2005

St George Housing Costs

I read the article "New-home sales plunge; weather blamed" at http://www.msnbc.msn.com/id/7044977/ and chuckled to myself because of the chaotic home building and prices in the St George area. The article says home building is way down in the United States this winter (mostly in Northeast and Midwest), but the weather is probably the biggest reason why. My question is how to figure out when it will slow down here and the prices will finally level out. Apparenty there are hoards of Californians coming to Southern Utah and throwing cash around like crazy, but this can't go on forever. It now costs between $75,000 - $110,000 for a quarter of an acre. Will the prices drop back down?

4 comments:

salty said...

Prices will start to drop once the interest rates go back up. Right now you can buy a home for 500,000 dollars that isn't worth that amount of money because interest rates are low. My personal advice is that you should buy a house for cheap when interest rates are high and then refinance your home when interest rates drop.

heather said...

I read that same article and it did mention that the west had not slowed, while the rest of the country had. I think home sales and home prices in St. George will steady up sometime, but for right now there is just an incredible amount of demand. This weekend my Bro.-in-law, who is a realtor in St. George, told me that he has never been busier than in the last month.

stockton said...

I think that St.George will continue to grow, regardless of the interest rates. I say that because there is a greater demand to live in St.George where the weather is nice and older people can go to get out of the cold and retire. It will only increase because soon the baby boomers will start to retire and I believe that will send even more people to the southern part of the state.

Dr. Tufte said...

-1 on Homer's post for poorly formatted link.

This is the sort of question that no one has an answer to.

Nationally economists are not sure what is going on with the housing market. It shouldn't be this strong, but it is. That suggests that there is a price bubble, but I am very dubious of people who claim there is a bubble before it actually pops - their track record is not good.

As to St. George, I think the long-term real estate outlook is phenomenal. The things that kept growth in St. George low for decades have mostly been eliminated: heat (AC), water (Lake Powell), cheap power (gas lines), remoteness (interstate and internet). I may not be around, but I think the 600K population estimate for 2050 is low, perhaps by 2/3.