Reader comments
Utah housing appreciation plunges

Although the value of homes may have declined, the county has seen fit to offset this loss by increasing the value of your land thus keeping its tax base maintained to feed government. A lot of home values losses in new homes can be blamed on high density housing. The only reason they developed is people could get in to them at no cost and have a little more privacy than an apartment offers. The no cost, no down homes no longer appeal to buyers because of the close proximity and crowded housing. Where yards can't even be fenced off to protect their children from the dangers of the narrow roads that are the front yard. How cities ever approved of these ultra high dense housing developements is beyond my comprehension. Now that people must qualify for homes with a debt to income ratio and a down payment how else could changes have happened? Does the devleopement industry think things would remain the same with irresponsible developement and financing? What these two industries need to accept is they too are responsible for what has happened to the market. Cities were gloating about growth, but that growth was irresponsible greedy growth.

Housing in Utah will fall 50% from its peak a few years ago to the bottom (probably within the next two years).

That will offer first time buyers some affordable housing for a change and give other buyers (not investors) an opportunity to buy a better home without buying into an asset that will fall in price.

The days of treating houses like a financial investment are over!

I do not agree. While house prices may decline further, historically house prices have appreciated over time. In the 1980's house price appreciation nearly tripled and has never returned to their lows. There are a lot of factors pressuring home prices. With all the money the federal reserve has been pumping into the system, we will eventually see a return to high interest rates and high inflation similar to that of the 1980's. At that point, we will see a steep appreciation in home prices again, but this time it won't be speculator driven, but inflation-driven. Those who have homes will be fine and it will be a great investment. You are right to a point that treating homes like a financial investment are over. Homes will always be a great investment; it is the irrational hope that your home will turn a handsome profit within 3 to 5 years or longer that is unrealistic and unsustainable.

Someone on another forum said that home prices aren't falling from where they should be - they're falling from where they should NOT have been. Maybe in some time, those prices will be appropriate. After years and years. But seriously, 76% increase in home prices in 5 years? Really? I know a lot of people moved to St George and could afford that. But not that many. And the locals were forced to pay those prices too.

I agree with "long way to go." Home prices are going to plummet from the peak. And then I assume they'll move upward again at a more modest, reasonable pace--the way it should have.

I'm struggling to see how high interest rates are going to cause a "steep appreciation in home prices." It was the low interest rates combined with too-easy money that caused this problem.

Let's all face reality. Our homes were/are overvalued and are just falling back to the real value over the next year.

Having a lot of debt may be the best thing you can do when inflation hits. I read a story by a man in Israel that bought a home just before hyperinflation hit their economy in the 80s. By the time inflation ended, even though he had hardly paid down any of the principle, the bank forgave his loan because it costs them more to service the loan than it was worth. Here is an example, if you buy a house for $300,000 and hyperinflation hits, by the time it's over, a gallon of gas might cost $10,000 and you may be earning $50 million/year. That's why governments love inflation. The debt that they have accumulated is much easier to pay with worthless dollars. So, it may be true that house prices won't fall by 50% due to inflation. However, we are in a severe deflationary period right now and who knows how long it will last. Home prices may fall by more than 50% and then increase by 10,000% as our money becomes will be worthless! The ruling elite are ruining our economy. Got gold and silver?