ST. GEORGE — When chef Cory LaFranchi moved his family from Seattle to St. George in August, he said he didn’t know what he was getting into.
“We wanted to be near family,” LaFranchi told St. George News. “When COVID-19 hit and everything shut down, we decided that we needed to get out of the city.”
LaFranchi sold his home in Seattle faster than expected, and he said he turned a $100,000 profit. He was ready to make the move. But what LaFranchi didn’t anticipate were the challenges presented by the St. George housing market, which was shaped by the confluence of a booming population, a housing shortage and skyrocketing prices.
According to realtor.com, the median list price for a house in Washington County is $399,000 as of March. To put that into perspective, it was $299,000 in April 2018.
Why are prices rising at unprecedented rates? According to mortgage lender Freddie Mac, the United States is in the midst of “one of the most important challenges the industry will face.” That is, the U.S. is 3.8 million starter homes short of buyer demand. And the costs associated with building – materials and labor – are rising exponentially, too.
LaFranchi said St. George seemed more affordable, which he expected would free him from the perpetual hustle for which cities like Seattle are known.
“You’re going nonstop just to make ends meet,” he said. “Our property taxes alone were $11,000 a year. In St. George, they’re $900.”
Still, LaFranchi said he was confident that he could find a house. After moving to St. George, his family, which includes his wife and three children, began living in a travel trailer. This gave him a sense of urgency.
“It was 115 degrees outside, and the little air conditioner couldn’t keep up,” LaFranchi said. “I love to cook, but it was impossible. And the cramped space made things a little tense at times.”
LaFranchi lost his first bid to a cash-buyer. He was out-bid for his second choice.
“But I had heard that the seller wanted my family to live in that home,” LaFranchi said. “When we lost that one, I started to feel like I was playing a lottery.”
Feeling desperate, LaFranchi said he began looking for rentals.
“But there weren’t any of those either,” he said. “Your choices are Airbnb or resorts – neither of them are affordable. And they’re just as hard to find as houses.”
The third time LaFranchi pulled the lever, he got lucky. He bought a house in downtown St. George, which was perfect for his family. But he didn’t know how close he’d come to losing that one, too.
“We won the bid by $1,000,” he said. “Let that sink in.”
LaFranchi’s advice to those looking to buy a home in St. George draws from his profession, juxtaposing spaghetti and money.
“You’ve got to throw money at it and see if it sticks,” he said. “That’s the only way you’ll have a shot at out-bidding the next guy.”
‘You may not get back in’
Justin Hofer, a 41-year-old health care professional who grew up in St. George, decided to move his family in the midst of the COVID-19 pandemic. As he saw house prices rising, he also saw an opportunity to resituate his family.
“We have kids that aren’t living with us anymore,” Hofer told St. George News. “We basically had a whole floor that wasn’t being used anymore, so we wanted to downsize to save money and trips upstairs.”
Hofer said his home sold quickly.
“We got an offer within the first week,” he said, which prompted him to have to find temporary living arrangements for his family until they found their next home.
Though Hofer turned a small profit when his home sold, he couldn’t find anything on the market.
“There wasn’t a whole lot to choose from,” he said. “And what was there just wasn’t right, so we decided to build our own.”
Hofer bought a property from Sullivan Homes, and contracted them to build his home. While Hofer hoped to find a rental until the house was completed, he couldn’t find one, so he and his family moved in with his in-laws. Since then, he said, he’s felt a lot of stress.
“We went in to it thinking we’d be there for a short time,” he said. “But we’re still there. I feel displaced.”
Hofer said it feels like he’s holding his breath, hoping there won’t be anymore delays or price increases.
“I didn’t know when we sold the house, but it’s a scary time to move,” he said. “There’s nothing out there. There’s bidding wars between people trying to get what few homes are on the market. You may not get back in.”
Ed. Note: This article is part one of a three-part series that takes a deeper look at rising housing costs from the perspectives of builders and realtors in Southern Utah.
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