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Wasatch Front home sales plummet

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Kevin | 6:45 a.m. Nov. 25, 2008

Note to home sellers: lower your prices.

another liberal lie | 7:06 a.m. Nov. 25, 2008

There is no plummeting home sales situation here.
This is just another liberal lie from the liberal media.

Ron | 7:21 a.m. Nov. 25, 2008

Homesellers. Hang on, prices will come back next year.

Comments continue below

hope | 7:34 a.m. Nov. 25, 2008

Well shoot, my realtor just told me that it was a "great time to buy" I wonder if I wait just a bit longer if it will be better.

Prices to Hi | 7:57 a.m. Nov. 25, 2008

This is why I moved to Phoenix. I got a nice 1,900 sqft 4 bedroom 3 bath home on 1/4 acre lot with a pool for $191,000. In Utah Home owners are unrealistic thinking their homes are worth $250,000 or more for a similar home. But I guess if the saps want to pay those prices more power to ya.

stevo | 7:59 a.m. Nov. 25, 2008

Another Lie? Pull yor head out of the sand! There were six pages of trustee sales in the paper yesterday,We are in the thick of a major downturn!

Wasatch Housing Slump | 8:16 a.m. Nov. 25, 2008

The Wasatch Front housing market has been propped up by a small fraction of the population that has leveraged themselves in hopes of easy money. Doctors, self-described real-estate entrepreneurs, and others have borrowed 50-80% on numerous condos, small rental homes, raw land and spec homes. As returns hover near zero for many quarters to come and taxes and debt service chip away at cash flows and asset values, many of these properties will end up back in the marketplace, further depressing prices and perpetuating the problem. If employment turns south, watch out. Foreclosures will add to the problem. And many have taken on mortgages well beyond what they can afford, even without an unemployment problem.

In order for housing prices to reset at levels that make sense for pay levels in the major northern Utah markets, home values need to fall another 20-30%. This bubble is not popping with a big bang but the air will come out. I remember well the 8-10 year stretch in the 80's and early 90's where real estate values on the Wasatch Front went nowhere for years. This time around, it probably won't be that pleasant.

Buyer | 8:21 a.m. Nov. 25, 2008

I'm moving in from another Western state. Home prices here are ridiculous. I have chosen to rent rather than pay the overly optimistic prices along the Wasatch Front.
Go ahead, hang in there, but you'll be met with disappointment if you're expecting me to pay two or three times as much as I could in any other region of the country. There's a difference between optimistic and delusional, and I think you have crossed the line here.

Belgie | 8:26 a.m. Nov. 25, 2008

What your realtor really meant was that it's a great time for her to take a $10,000 commission. Hard to argue with that - what with his/her $3000 mortgage payment, $600 car payment, and $30,000 in credit-card debt.

Earl | 8:42 a.m. Nov. 25, 2008

To a realtor, a great time to buy is when he or she needs money.

Propaganda | 8:50 a.m. Nov. 25, 2008

Many in the real estate industry love to create propaganda to paint a different picture down 17% really isn't that bad, but to say prices are going to come back in an extremely saturated and already price inflated housing market is not well reasoned. They are falling back to reality after much speculation they are not "coming back" within the next two years by any means other than speculation.

Housing bubble | 9:14 a.m. Nov. 25, 2008

Just like the .COM bubble, the commodities bubble, and the stock market bubble, housing was in a bubble just a couple years ago. Housing may have a much slower cycle than other markets but it moves in cycles nonetheless.

I think this bubble will see a 50% drop from its peak in 2005-2006 to its bottom sometime in the 2009-2011 period. This means we are about half way there. Some distressed homes have already sold for 50 cents on the dollar, but many more will join that club as people realize they can't hold on any longer to their overpriced houses (many of them are speculative investments).

I will buy when prices drop another 25%. Then, maybe I won't be stuck with a home that will depreciate in value.

home prices are too high | 9:16 a.m. Nov. 25, 2008

Yes,
Home prices are too high. That is why there is a huge surplus of houses. This is basic economics. You lower the price the demand will go up.
I for one will buy a house as soon as the prices come down.

Good Old Days | 9:37 a.m. Nov. 25, 2008

I remember the 1980's real estate slump too. I bought my first condo in Sandy in 1989, three bedrooms, 2.5 baths, $42,500 at 9.5% interest - the interest rate wasn't any problem on that amount of principal. The recent housing bubble, in my opinion, was caused in large part by unrealistically low interest rates that resulted from the Fed's goal of zero inflation.

Buyers Market | 10:03 a.m. Nov. 25, 2008

The only way this will be a buyers market is if the sellers lower their prices and actually accept the offer they receive. I have put in some offers on some properties in the last few months and every single seller comes back and laughs at my offer then counters only 2-3k off of list price. There is a reason that nothing is selling. Lower your prices! And not just 2-3k. More like 20-30k and then your home that has been listed for over a year will sell. Give it a try.

SLC | 10:51 a.m. Nov. 25, 2008

The homes in SLC are overvalued. I will NOT purchase a home until the prices decrease. Home sellers are living in a fantasy world and I hope they wake up...

Dan | 11:15 a.m. Nov. 25, 2008

Sounds as if I'm preaching to the choir here, but I'll throw in my tow cents and say, yes indeed, housing prices in Utah are WAY too high, and have been for several years. It's better now than it was three or so years ago, but it's still ridiculous.

What is so gosh-darn wonderful about living in Utah? This place isn't southern California (yes, I know prices are much higher there), ya know!! This is coming from a Utah native who is an active member of the LDS Church, too. I still don't see what justifies a price of $250,000 to $300,000 for a very, very average house.

Anonymous | 11:16 a.m. Nov. 25, 2008

Always 2 years behind..

real vs perceived value | 11:54 a.m. Nov. 25, 2008

Good luck finding buyers for your homes.
The only people with real money today are buying homes in Lake Como or Zurich.

Good Old Days | 11:58 a.m. Nov. 25, 2008

I just heard Henry Paulson on TV talking about how they're going to make it easier for people to buy houses. Holy mackerel!! - I thought easy home buying, sub-prime loans etc, caused the problem in the first place! As I mentioned earlier, interest rates aren't a problem if home prices are reasonable. People couldn't care less about the price of a house, they care about monthly payments - and if you're financing for 30 years the monthly payment is primarily a function of interest rate. We're in a real dilemma - overvalued real estate, inflation in the first half of this year that was double last year, property taxes that depend on inflated real estate, soaring unemployment. Good luck Barack.

to Dan | 12:07 p.m. Nov. 25, 2008

I am a Utah native but live in soCal. While Orange County is great, Utah offers a lot that Orange County doesn't. In some regards Utah is a better place to run a business, especially one that has a national presence. Utah is business friendly, whereas California levies heavy taxes on businesses and families in order to pay for an extremely inefficient educational system and services for illegals. Side note: California is $11 Billion in debt right now and cutting education funds again. Also, in Orange County it's difficult to find a house with a decent sized backyard for under $800,000. That same $800 K would go a loooong way in the Utah RE market.

Next, soCal doesn't offer changing seasons like Utah does and air quality is 4 times as bad in Orange County compared to SLC.

Lastly, I have noticed that many kids in CA are "computer kids" (skilled at computers and video games). That's not always a bad thing, but I would prefer my kids spend their free time outside getting exercise and playing sports.

I love it here in CA, but am almost to the point of moving my business to Utah for those reasons.

Out of debt | 12:19 p.m. Nov. 25, 2008

I'm 37 years old and OUT OF DEBT. Married, four kids, and have lived way below my means for 15 years of marriage. I only buy what I can pay for that month. I own my house, my cars and have no credit card debt.

Try it. It's a fabulous way to live.

Relax people. | 12:24 p.m. Nov. 25, 2008

This market looks a lot like the market did a few years ago. Isn't anyone else tired of the doom and gloom moaning and groaning? Most people will be just fine. And yes, there are still people buying and selling homes. And enough with the realtor bashing. There are good ones and bad ones -- just like any other profession. If you're unhappy with your agent, stop whining and find a new one.

Home Prices Falling | 12:36 p.m. Nov. 25, 2008

Real home prices in Utah have plunged in the past 18 months and will continue to fall for years. If prices fall another 10-15%. and inflation runs 3% per year, the real value of the home will fall by 20-25%. Basically, you are paying interest on a dead asset or letting your capital sit and earn a negative return. Property taxes and depreciation only make the situation worse. Some of these folks would be better off lowering their price and moving a home they don't need but simply can't get their head around the math and end up making a bad decision. It's not that the rational expectations argument is bad; Folks are making decisions rationally but are basing it on bad data.

Housing prices in Utah moved way ahead of incomes and are now falling steadily. They will be back to fair value in 3-5 years. Pop goes stocks, pop goes commodities and deleveraging will pop this housing bubble too. Markets are magic!

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