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House prices rise in northern Utah

The headline is misleading. Comps are not done on home sales from a year ago. Typically 6 months or less. In this market, I wouldn't touch a comp that was more than 3 months, ideally 30-60 days. In those time frames (last 30-90 days), prices are dropping, even in our beloved Utah. It may be a decent time to buy, but it will only get better. People only have so much money. With the price of gas, food, utilities, houses, and everything else gone up so much with wages basically the same, something has got to give. Prices have dropped substantially since last year, and will continue to do so. For buyers, the best is yet to come. Just wait and see.

When reading a report like this, one must keep in mind that this is comparing first quarter '08 to first quarter '07. I am willing to bet that when you see second quarter '08 to second quarter '07, Utah will be showing significant declines in values. Most of the home prices have dropped most significantly in just the last couple of months and will not be counted in these kinds of studies until they are sold. Furthermore, the foreclosure and short-selling in northern Utah is increasing at a lightning pace. If you are planning to buy a home, I would wait as long as possible cause we are just starting into the decline that the rest of the nation has been experiencing for over a year now.

While it is true that median homes prices are up from one year ago, this article does not portray Utah's market today.

Median home sold prices in Salt Lake County for the 2nd quarter of 2007 were $254,000 . Home prices have actually dropped by 5% since then to $242,250.

Utah home prices have a long way to drop for several reasons.

1 - Affordability. Today people actually have to qualify for a home to get a loan. Wanting a home doesn't mean they can buy one.
2- Supply vs. demand. Utah has an oversupply of homes for sale. The last time I checked, the Wasatch Front had over a year's supply of homes for sale based on how many had sold the previous month. I am seeing an increase of listings by up to 100/week/county on the mls.
3- Other markets. The Phoenix metro market median home price has now dropped to $220,000 with predictions of nearly 20% more to go. When homes become more affordable in markets with better wages, people will begin moving away from Utah resulting in even lower demand/prices here.
4-Price vs rent. Utah is historically overpriced when looking at the 20-year price/rent ratio.

Despite the negativity in the comments posted above, this report is good news for the state of Utah. However, it is not new news. Utah has ranked similarly in the last 4 such reports by the OFHEO. The two markets in Utah that are in trouble are Washington County (St. George) and Western Utah County (Lehi, Saratoga Springs, Eagle Mountain). The rest of the state is in relatively strong shape from both a supply/demand standpoint and a pricing standpoint.

What most people fail to understand is that interest rates are probably not going to get much lower than they are now. As such, the affordability index indicates that NOW is a great time to buy a house. Waiting for a "good deal" will probably result in buyers securing loans at higher interest rates than those available now. The difference from previous years is that buyers need to have a strong credit history and reasonable liquidity in order to qualify for a loan; whereas, anyone with a pulse could get a loan two years ago.

Other than the areas indicated above, the real estate market in Utah is stable and buyers will do well to act now while rates are low!

This report is NOT good news. As mentioned above however, it is meaningless anyway, because over the last few months prices have fallen dramatically. Try looking at year over year figures at the end of the year, or this time next year.

We are over taxed, over insured, and over pay on many other things because our house prices are too inflated. Prices need to drop, and EVERYTHING would become more affordable. Interest rates WILL be higher, but not my much. You think they are going to be able to raise rates much given our current economy, where people have no money to spend as it is? The moderatly higher interest rates may offset the payment per month based on the lower home prices next year, but you will still save money because you have less commission, fees, insurance, taxes, etc. Not to mention you can refinance, pay off your loan early, or a variety of other things, but you can never recoup overpaying for the house in the first place. Prices need to drop, and they will until things are back in line with reality.

It sounds like now is a great time to buy in St. George. Theres alot of inventory. The condo that once costed $250k is now $160k. Then in 5 years you will be glad you bought now. With a new airport being built, quality of life and climate. St. George is a good investment.

This is also a relatively backwards looking index. It's reporting sales that closed for the quarter ending in Mar for offers made in about Nov-Jan. Even so, the trend quarter-over-quarter in UT is still clearly one of home prices accelerating downward. Who is it that buys a home in a market that's accelerating downward again? You've got me. At least wait until the downward trend starts to decelerate a bit -- sheesh.

Reality- always slow to set in 'round these parts.

Please don't come down here! We have too many people aleady1

St. George is the best place to live...but they need a huge water park like Seven Peaks. Anybody want to build one for our kids???? I am so surprised nobody has done it yet.

St. George barely has enough water for its own residents. I think it would be foolish to build a huge water park there.

There is no credible evidence that the decline in house prices or the "credit crisis" have reached an end.

If you want to quote stats from realtors, builders, or the goobermint, remember that I said CREDIBLE.

Catch a falling knife if you want. We are heading into AT LEAST a severe recession.

The markets wanted to crash earlier this year but the FED, Treasury, and PPT flooded the market with liquidity (More Debt) to keep this charade going a bit longer. It ain't over til it's over and it ain't over.

It's not like you replace the water in a pool every day. Silly.

The Buyer always gets to choose. Many people in Utah do not have the money to buy a home and those who do will probably wait until the prices of homes go down at least 10%. If some homes are selling in Utah it is due to many people who have moved in to state. At this time the entire country is facing difficult times and many young people out of college can not affored to buy at this time.

The FBI has been looking for 400 people who have been charged with mortgage fraud. The FBI have already arrested 300 people some of which come out of the state of Utah!

The problem came when many people where told that they could afford homes which they should not have been buying in the first place. This makes up for a mix in the economy which has not stabilized yet. This is because many people still believe that they can qualify for the same amount of money they have been able to in the past. The homes that have gone up in price are due to crooked reasoning. This means that not all inflation in home prices can be adequately justified.