After writing last weeks Blog entry, I started wondering what percentage of Salt Lake condos actually sold FHA in the last 6 months. So I went to the Wasatch Front MLS and did a little research. I chose to evaluate three areas and price ranges.
Area and price range 1 is Salt Lake City, all prices, because SLC has the highest density of condos in the area. I did a search for condos sold from Gateway to 700 East and from South Temple down to 600 South in all price ranges.
Area and price range 2 was Salt Lake County under $250,000
Area and price range 3 is Salt Lake County above $250,000
Area 1 Salt Lake City all prices:
In the last 6 months, 137 downtown Salt Lake City condos sold and I have listed the way they were financed below:
42% Conventional Loans (57 condos) 29% FHA Loans (40 condos) 27% Cash (37 condos) 2% Other (3 condos)29% of these condos sold with an FHA loan. This is a substantial amount and if FHA condo financing was eliminated, this would be bad, but FHA loans for condos aren’t going away, they only eliminated spot check approvals for non-FHA approved condos. So there will still be a percentage of condos that will be financed with FHA loans, it’ll just be a smaller percentage. So downtown Salt Lake City looks better than I thought it would.
Area 2, Salt Lake County under $250,000:
In the last 6 months, 913 Salt Lake County condos under $250,000 sold and I have listed the way they were financed below:
25% Conventional Loans (226 condos) 60% FHA Loans (545 condos) 11% Cash (100 condos) 4% Other (42 condos)60% had FHA financing. This is significant! Due to this high percentage, if I was buying a condo in suburban Salt Lake County outside of downtown Salt Lake City under $250,000, I’d be buying one that is in an FHA approved condo complex, even if I wasn’t doing an FHA loan. I think I’d look at single family homes too.
Area 3: Salt Lake County over $250,000:
In the last 6 months, 85 condos sold and I have listed the way they were financed below:
55% Conventional Loans (47 condos) 15% FHA Loans (13 condos) 25% Cash (21 condos) 5% Other (4 condos)Here only 15% of condos in Salt Lake County over $250,000 sold with an FHA loan. This is probably due to the fact that condos over $250,000 aren’t typically bought by first time buyers and therefore the buyers have more of a down payment. This looks pretty good.
If a condominium project wants to be FHA approved, they can fill out the paper work and try to get FHA approval. The process takes at least 60 days and can take longer. Applying doesn’t guarantee approval either.
So it appears that the elimination of spot approvals for FHA condo loans will have the greatest effect on suburban Salt Lake County condos outside of downtown Salt Lake City, under $250,000. As you can see from the numbers, there are a lot of condos effected by this.
If I was buying a suburban Salt Lake County condo under $250,000, I would buy one in an FHA approved complex even if I wasn’t doing an FHA loan. Until there are low down payment Conventional loans for condos or FHA reinstates spot approvals, non-FHA condos under $250,000 in our area will be hard to sell.
The Salt Lake City real estate market is constantly changing and having an experienced Realtor to be your guide can make your home search a lot more enjoyable. If you need help with the purchase of a Salt Lake City home, condo or duplex, contact me. I’ve been a Salt Lake City Realtor since 1999 and over the last year, 80% of my clients were buyers!
Kevin Kevin Coyle Associate Broker, GRI, MBA Kevin@SLCHomeBuyer.com 801-243-0699 (Mobile) Stonebrook Real Estate