Local poll reveals fuzzy forecast in housing market

The uncertainty surrounding Utah's topsy-turvy housing market is revealed in the responses to a recent Deseret Morning News/KSL TV survey conducted by Dan Jones and Associates.

Despite the fact Utah's real estate market is still relatively strong compared to neighboring Western states like Arizona, California and Nevada, homeowners and prospective buyers are still fuzzy about what to make of the current market — or what the next 12 months will bring.

When asked to peer into their crystal balls, 22 percent of respondents said they believe home prices will probably increase; one-third think prices will remain the same; and 26 percent said housing prices will decrease.

Of those who thought prices would increase, 38 percent said the hike will be 0-3 percent, while nearly half (48 percent) said prices will rise 4-7 percent, with only 10 percent believing prices will jump higher than 7 percent.

For the respondents who said prices will decrease over the next twelve months, one fifth think the drop will be 0-3 percent, 34 percent believe the decrease will be 4-7 percent, 26 percent said the decline will be 7-10 percent, with 10 percent answering greater than 10 percent. For the most part, these numbers reflect the opinions of many analysts who follow the housing market and express varying thoughts where Utah real estate goes from here.

"Right now it is definitely 'change time.' I personally believe (the market) is going to get back to the days we had back in the '80s and '90s a little bit," explained Dave Seiler, an area Realtor with RE/MAX Associates.

He described circumstances in which home prices have been artificially inflated due to out-of-state investors and speculators flocking to Utah, triggering a steep increase in property values for a short time — followed thereafter by a sharp decline.

But Kelly Matthews, executive vice president and economist for Wells Fargo, sees Utah's current home market as more stable than other states that saw rapid appreciation and are currently experiencing a literal reversal of fortune.

"Our Utah situation has not deteriorated nearly as much as some of the other places," Matthews said.

Matthews said new home construction fell 20 percent during the period August 2006 to August 2007, while selling prices for homes increased in the double digits for the same period.