9/07/2005

Real Estate: will it ever cool down?

I'm sure that you have noticed, especially you home buyers out there, that the cost of homes have gone up drastically over the last year. Even here in our own little Cedar City, UT, although it is not as small as it once was. Cedar City has seen many families, mostly from California and Las Vegas, move into our its area. They sale their homes there, and make a profit, move here and buy all of the homes or just build to suit. With the high demand for new homes here in Cedar City, even the smallest and oldest houses are up in the $150k range. According to www.msnbc.com the U.S. home prices increased by an average of 13% just in the last year. I sure hope that the demand for homes here slows down, because soon people are not even going to be able to afford to live here anymore and people who grew up here won't be able to stay. Maybe people from California should just stay there. Maybe. Just a thought.

15 comments:

Liz said...

I have been in the construction business for going on 5 years now and I have watched the market explode in St. George and now in Cedar. I agree that if things don't change, Californian money is going to push the locals out of town. Cash home buyers are creating a realestate bubble that I hope pops soon or I may have to find a new place to plant roots.

Dan said...

I don't think the problem rests solely on the "outsiders" shoulders. It is the locals who are making most of the money off this real estate boom. Take a drive along the outskirts of town and you will see farm after farm being developed for housing. I don't think it's the Californians who are selling or developing the land. It is sad to see this type of a problem when a young family has to leave the place that they have called home for their entire life, but it will aways come down to the dollars. I guess the best thing to do is to get use to seeing a lot of out of state plates driving around.

Ryan said...

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sara said...

I am a real estate investor/entrepreneur. All of these people that are moving in are creating a huge opportunity to make money. If the locals would just learn to capatilize on the growing market, they could afford to stay in there beloved town.

Tyler said...

I am new to Cedar City but from what I have seen shows me that this city is still relatively small. The city is just beginning to grow, people want the malls, bigger stores, and newer facilities but for what price. We live in a capitalistic society; Cedar City is a great place to raise a family with low property values compared to California. Seems foolish not to move, wouldn’t you?

Bob said...

There is no doubt that property prices will continue to rise here in Cedar City. With the explosion of people moving into Mesquite, Las Vegas, and St. George, people are going to be looking for a more quiet place to live, and that place will be here in Cedar City. I don't plan on living here after I graduate, but I do plan on purchasing real-estate here. I say let the prices rise and I will use it as an investment opportunity just like all those folks from Las Vegas and California are doing.

Connor said...

These rising prices are prime opportunities for those of you who are from this area originally. Granted, it is not a friendly first-time buyer market. However, for those who have been here for a while and already possess land, you can make a huge turn around on it. Or if you do not have land, you probably know someone who does and may be willing to cut you a deal. Don't be reactive, but be proactive in this booming market!

Chloe said...

Those that already have land can definitely use this real estate boom to their advantage. The sad thing is, is that some people get so excited that they can make such a large profit on their home, that they sell it to someone from California and then realize that they have nowhere to go. Real estate is a good investment. The important thing is to make sure that the opportunity cost of selling is worth it to you. Let the out of state people come in, but don’t sell them your house that’s been in the family for years if you don’t know where you’re headed.

Logan said...

If locals can't stay, where will they go? Do you think that this real estate explosion is unique to Southern Utah? My friend in San Diego was tired of renting a two bedroom apartment for $1,800 a month so he and his wife decided to go home shopping. An older 3 bedroom home in San Diego averages around $500,000 dollars! He told me that he is going to move to Southern Utah so he can afford a home! You see, it is all in your perspective. The builders, realators, mortgage companies, and investors love what is happening in this area. Home buyers hate it. It depends on what side of the coin you find yourself. And luckily, being some kind of business major, you sure could take advantage of it if you stop complaining.

Dr. Tufte said...

-1 on Emily's post for grammatical errors.

-1 on Logan's comment for spelling errors.

There is a folk theorem in economics that says that all benefits ultimately accrue to the holders of fixed assets. In this case, that is the (early) holders of Cedar City real estate. I'm emotionally sympathetic to people who are priced out of the market, but the trick is to be the early holder of a fixed asset somewhere else.

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Samuel Dodd said...

I am a real estate agent and I am kind of surprised no one has blamed what is going on in Cedar City on me yet. :) Anyways I just wanted to point you to my investment site about Cedar City Real Estate. cedarcityrealestate.blogspot.com I have a few different options for taking advantage of the growth our city is experancing. There are many options to make good amounts of money with very little of your own money in Cedar City right now. Why wait and be left behind?

Sandeep said...

The current market scenario has brought everyone on his toes. One should be careful before investing in real estate. Do confirm prices by other builders/other sources.
Idaho Real Estate