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Canovo Group Newsletter - February 1st

Canovo Group Newsletter - February 1st

🔥 Another Fed Rate Hike - 33% Drop in Single Family Sales - 4 Cities That Could Crash Like 2008

February 03, 2023

Falling Sales and Prices in Utah Real Estate: What You Need to Know

Hello ,

It’s no secret that the Utah real estate market has seen some significant changes over the past year, with the most recent data showing a dramatic shift in January 2023 compared to January 2022.

Starting with single-family homes, sales numbers have dropped from 2792 in January 2022 to 1852 in January 2023, a decrease of 33.6%. This decline is mirrored in the median sales price, which has fallen from $482,000 in January 2022 to $455,000 in January 2023, a decrease of 5.7%.

Utah Single Family - Monthly Median Sales Price

Turning to multifamily properties, the situation is similar, with sales dropping from 60 units in January 2022 to 23 units in January 2023, a decline of 61.7%. The sales prices have also taken a hit, with a decrease from $650,000 in January 2022 to $618,000 in January 2023, a decrease of 5%.

The federal funds rate and the average 30-year fixed mortgage rate have both gone up. The federal funds rate has gone from .08% in January 2022 to 4.33% in January 2023, a staggering increase that has shocked the entire economy.

Earlier this week the Federal Reserve raised its key rate by 0.25%, and continues to signal that more hikes are likely in the future. Although inflation seems to be decelerating, the Fed believes that a "couple" more rate hikes will be necessary to reach a comfortable interest rate level even if it results in short-term discomfort for wages and employment.

We believe that interest rates will continue to remain elevated throughout the next 2 quarters, inventory levels will remain high and sales activity to remain subdued.

While it may be tempting to sit on the sidelines while there is so much uncertainty in the market, there may be great buying opportunities that present themselves throughout this year.

If you have any questions about your specific buying or selling needs, don’t hesitate to reach out to discuss. You can grab a quick phone call here.

Recent Utah Multifamily Activity

West Valley Duplex

Built in 1972, 7 Beds, ~3300 SqFt in West Valley City. Sold for $545,000 cash. sold by: Canovo Group

16 Unit in Ogden

Built in 1924, 16 beds, 16 baths, sold for $2,500,000 with cash. sold by: Bluemountain Realty

Midway Duplex

Built in 2022, 6 Beds, 3700 SqFt in Midway Ut. Asking $1,590,000. Request More Info Listed by: Mountainland Realty

Turn-Key Fourplex

Built in 2019, 12 Beds, 12 baths, ~6700 SqFt in Eagle Mountain. Asking $1,350,000. Access Details Here. Listed by: Canovo Group

Considering selling your multifamily property? Request a free brokers opinion of value.

Top Headlines, Reports, and Articles

Fed raises rates a quarter point, expects ‘ongoing’ increases (cnbc)

2023 Multifamily Market Outlook: Turbulence Ahead (fanniemae)

Utah added more than 40,000 jobs in 2022 (thespectrum.com)

[REPORT] 4 cities likely to see a 2008-style housing crash (thehill.com)

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- Jocelyn Kaufman

This Week on The Lead Sponsor Podcast…

Real Estate Financing Secrets: How to Structure Deals - with Rob Beardsley | TLS240

Rob is a Principal at Lone Star Capital where he oversees acquisitions and capital markets for the firm and has acquired over $350M of multifamily real estate. He has evaluated thousands of opportunities using proprietary underwriting models and published the number one book on multifamily underwriting, The Definitive Guide to Underwriting Multifamily Acquisitions. He has written over 50 articles about underwriting, deal structures, and capital markets and hosts the Capital Spotlight podcast, which is focused on interviewing institutional investors.Show Topics:

Rob’s background and upbringing and how he got into the Commercial Real Estate Space.
How he met his business partner and started Lone Star Capital
Why he had the confidence to build his own underwriting model and write his first book.
What were the biggest challenges you faced in writing the book.
We discuss two key concepts about raising debt that you must take into consideration
How his thoughts about debt have changed since 2022 and what he is doing differently moving forward.

LISTEN TO THE EPISODE NOW