Layton, UT

We need Positive Price Action to confirm market bottom. One month of price improve isn't sufficient to confirm the market bottom. We need to see appreciation month over month for three months.

PRICE ACTION

Other good signs in addition to positive price action is lower DOM (days of the market), lower new listings and higher percent of new listings being SOLD.

SUMMARY

Currently we are not seeing the needed positive price action (along with other indicators) to confirm a market bottom. This is NOT a good time for those with low and/or no risk tolerance to purchase.

High and medium risk tolerant investors are making buying decisions and are doing some bottom fishing.

Some are trying to time the market and market timing is risky. Trying to time the bottom is not for the inexperienced buyer and extremely difficult.

Those waiting for a market bottom confirmation will (almost always) miss the bottom. This is because confirming factors are lagging indicators.

Buy and hold is the best buying strategy.

Data considered accurate... However is NOT Guaranteed. Contact your Mark Watterson your Local Property Resource Specialist for the most up-to-date data and help to determine your specific risk tolerance.

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Contact Mark Watterson your Local Property Resource Specialist for the most up-to-date market conditions data for Salt Lake, Davis, Utah and Weber Counties. View comprehensive property resource information at www.markwatterson.com

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In fact it doesn't even seem like business. Because it's all about you, your goals and objectives.

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Here is the updated Layton market snapshot report for the most recent quarter. We are starting to distance ourselves from the frozen credit markets we experienced in the fourth quarter of 2008 and after the first of the year. However, the local real estate market is still a bit sluggish.

We are now starting to report more significant price point impacts as sellers are forced to adjust their pricing in order to obtain offers. As I mentioned in my fourth quarter report, the impact of elevated inventory levels and the increase in distressed properties (e.g. short sales, foreclosures) is being felt as these properties are now being sold and the price impacts being reported. The trend line continues to be downward and most analysis would indicate this trend will likely continue through at least the first half to three-quarters of 2009. The good news is we are continuing to see new inventory counts begin to decline thus slowing the pipeline of competing inventory. However, as you can see from the “Listing Inventory” section of the report, we continue to carry a high on-going inventory in all price categories.

It does appear the Fed’s ability to keep long-term interest rates moderated is helping to some extent. We are continuing to see sales activity, albeit reduced, in all price points. In fact, you might notice in the “Buyer Demand” section that average and median home sale prices in Layton increased slightly from the same period a year ago. This in spite of a 12% decrease in actual unit sale activity. This drop in unit sales is having an impact on average list prices. As the existing inventory begins to sell, I would expect the impact on average price points to be realized.

So have we hit bottom yet? That’s a question I get asked frequently and I have a standard response. “Perhaps, but we won’t really know until we can look back at one or two quarters and then definitively say ‘that was the bottom.’” I have yet to find someone who has the ability to accurately predict a bottom but a vast number of people who can report a bottom . This is just as true in the stock market as it is in the real estate market.

This spring and early summer season (May through July) will tell us a great deal about the market’s ability to reach a stabilization point. My next quarterly report will be prepared near the end of this time period and should provide an interesting view into our market’s dynamics. I hope you find this information helpful. You can also go to my website’s Communities tab and get additional market data reports for several communities in Davis County as well as global reports for both Davis and Salt Lake County

Of course, don’t hesitate to contact me with any questions you may have about this data or if there is more specific information I can provide relative to our current market conditions.

Private Mortgage Insurance (PMI) - Ending Early

Private mortgage insurance, or PMI, is the safety net of the lender. PMI benefits lenders because it guarantees payment on the balance of loans not covered by the sale of foreclosed properties.

If a borrower makes a down payment of 20% of the cost of the home, the lender can generally trust that he will make his mortgage payments faithfully to protect a large investment. In this case, the lender comes out ahead if the borrower is forced to foreclose on his house, because the lender loans 80% of the cost of the house, but will probably recover 100% of the cost of the house. But, if the borrower makes a smaller down-payment, such as 3%, 5% or 10%, and borrows the rest, and then defaults on his loan, the lender loses money.

If a house is purchased with a conventional mortgage and a down payment of less than 20 percent, PMI is almost always a requirement. The insurance benefits the lender, but the borrower pays for it. An initial premium is included in the closing costs, and a monthly amount in the house payment.

The PMI cost varies depending upon the size of the mortgage and the percentage of the down payment. If the down payment is more than 15 percent but less than 20 percent, the borrower will generally pay about 0.32 percent of the loan amount annually in PMI premiums. That totals about $40 a month for a $150,000 mortgage.

But PMI is not fool-proof. Homeowners can sometimes eliminate private mortgage insurance by refinancing their loans -- even if they continue to owe more than 80 percent of the value of the house. And there are new laws that require lenders to remove PMI if a mortgage does not exceed 80% of the value of a home. But, this new law only applies to loans recorded after July 29, 1999. If a borrower has a loan that was recorded before July 29, 1999 and thinks he might like to cancel the mortgage insurance after a few years, he could, depending on the conditions and whether the insurer allows cancellation.

The most common method used to avoid paying private mortgage insurance is for a borrower to get a "piggyback loan" - a second mortgage that allows him to make a 20 percent down payment. For example, a borrower can pay 10 percent down; get a first mortgage of 80 percent, and a second mortgage of 10 percent. The piggyback loan is always at a higher rate. The borrower is not paying for PMI, but is still making a monthly payment, probably for roughly the same amount as PMI. A piggyback loan also has an income tax advantage because it allows the borrower to deduct the interest from his taxable income. However, he can't deduct the cost of PMI.

For homeowners who owe between 80 and 83 percent of the house's value, the best way to avoid PMI when refinancing the loan is to find a lender that won't immediately sell the mortgage on the secondary market. Generally, to eliminate PMI, a homeowner must have a spotless mortgage payment history and be able to fit a certain profile of borrower. Examples of good candidates include:

* A homeowner who is refinancing a mortgage and has had no late payments in the last year or two.

* Someone who is barely over the 80-percent PMI threshold. (For example, if he owes $85,000 on a $100,000 house, he probably won't get a break on PMI, but someone who owes $82,000 might.)

* A homeowner who is otherwise creditworthy -- has a high credit score, a stable job, and a good ratio of income to debt.

Even with these credentials, the homeowner must try hard to find a lender that keeps mortgage loans on its books and is willing to take the risk. Most mortgage lenders don't hold loans for long. They bundle mortgages together and sell them to large investors such as big banks, insurance companies, pension funds and institutions such as the Federal National Mortgage Association, known as Fannie Mae.

The reason for selling mortgages is to free up money to lend again because the original lender gets most of its money (and profit) from fees and the sale of the loan, not from interest. The investors who buy pools of loans ultimately earn the interest that borrowers pay.

PMI assures investors that their bundles of loans won't go bad. Homeowners who put less than 20 percent down are more likely to default. That is why they're required to have private mortgage insurance. Otherwise, the loans won't be marketable.

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Layton is the largest city in Weber County and also had the greatest decline in number of houses sold, 36%. Yet, sold price did not change much for Layton homes. Median sold price increased by $15 and average sold price decreased by $5,325. There are 505 homes in Layton for sale and inventory is just under one year.