The economy as a whole is currently performing well. The local housing market has more strengths than weaknesses, housing experts say, and the housing market in Powell is looking good going into the spring season.
“We’re pretty optimistic,” said John Parsons, co-owner of 307 Real Estate.
Across the nation, things are looking good for real estate for both buyers and sellers. Earlier this month, Fannie Mae released its Home Purchase Sentiment Index, which measures Americans’ attitudes toward the housing market now and in the future. It showed its highest levels since June — rising 5.5 points in March to 89.8 — a sentiment driven by increases in the “good time to buy” and “good time to sell” components.
On its blog, Heart Mountain Realty points to three markers to explain what’s happening nationally with the housing market today.
The 30-year mortgage fixed rates have fallen from a high of 4.51 percent to 4.06 percent since January. Those falling rates are combining with hourly earnings rising nearly 2 percent since January 2018, which may drive more home buying.
Adding to that, the U.S. existing home price has fallen from $273,800 in June to $249,500 in February. Put simply, home buyers have more money to spend, and their dollar is going a bit further.
Zillow, a Seattle-based real estate information site, said these factors indicate a “reasonable” amount of mortgage affordability — the share of income necessary to afford a typical house payment — in most markets.
The lower interest rates, Zillow researchers caution in a December 2018 report, may lead people to stay in their current homes rather than sell, which could end up negatively impacting inventory.
Inventory is the area some local brokers say the market has its weaknesses. Parsons, who has been in the area 15 years, said the inventory of mid- to high-range homes is pretty solid. But at the lower price range, the supply on the market is only about 60 days.
“We could definitely use some more inventory,” he said.
The City of Powell has issued about 13 building permits for single family housing every year for the past few years, but this might not be keeping pace with the demand.
Eric Paul, broker/owner of Heart Mountain Realty, said the stock of new housing is too sparse, and that’s where the demand is.
This is a nationwide problem. Zillow notes entry-level and median homes have a shrinking amount of an already low inventory, which are the homes first-time buyers and young families are seeking. This is adding to the trend of young people living with parents longer.
With concerns about slowing global economic growth taking hold, the low interest rates began to rebound at the start of April and the trend could continue. This could reverse some of these positive indicators.
While new housing inventory could be better, Paul said houses coming on the market right now, if priced reasonably, are moving.
This time of year typically is a good time to get a house on a market.
“We’re well positioned to have a strong spring and summer season for sellers,” said Andrew Whitlock, broker/owner of Whitlock Development.
Paul said a seller who waits too long might miss out on what is typically a spring push for buyers.
He cautions there are a lot of factors that can determine how a particular house performs on the market. Besides how it’s priced, there’s also the quality. Throwing a house on the market that isn’t quite ready to sell will not produce the best results.
Sellers also don’t want to have a house selling before they’re ready to move out.
“If you have that flexibility, yes this is the time of year to sell,” Paul said.
Parsons said 307 Realty doesn’t see so much of an uptick in spring. He said it used to be that way, but now people are much more likely to move in the winter.
For example, February, despite record low temperatures this year, was a “solid” month.
“Our winter months stay pretty active,” Parsons said.
Paul characterized Powell as having “barely” a buyers’ market, but Parsons, with 307 Realty, said it was too balanced to say one way or another.
Like Paul, Parsons noted if a house is fairly priced and of good quality, it will sell.
Powell has quite a few things going for it too, which brings in home buyers. The cost of living and property taxes are low. Park County has seen a healthy population growth.
Parsons said Powell gets its share of out-of-state homebuyers. Housing in Wyoming is about at the median price range for the nation. Whether that appeals to buyers, Parsons said, depends on where they’re coming from.
“We have people coming from the West Coast, and they think our prices are a bargain,” he said.
With the cost of living bursting on the West Coast, a lot of out-of-state buyers are coming from that direction.
Economists are predicting a recession in the coming year. It remains to be seen if the optimistic atmosphere continues to flow through the housing market should that happen, but for now, things are looking good.