... Rich S. from Orem's Realty Executives on 1600 North just called me yesterday to tell me the bottom had occurred more than two months ago already and that Utah was on its way back to rapidly rising real estate rates. "Homes are now receiving multiple offers," he said. "Get in now before the great interest rates are gone," he said. How odd that four out of the last five homes I've looked at have been in short sale, thus the great starting list price.

Let this be a message to the Ashton Kutchers of the Utah Real Estate industry: DO NOT PUNK ME! I'm not a stupid celebrity. I see right through your sham and the fake stories of recessions past.

P.S.: I haven't received a raise since 2006, even though my employer's profits have soared fourfold in the last six years. Does that mean I'll still be eager to pay $250K for the same townhouse that was selling for $115K three years ago? You do the math, fast-talking real estate agent ... unless math requires a mortgage broker's help, too!

Touche!!!!!!

Well Said!!!!!!!!!!!!!

That 'home ownership' is a universally good idea is just a false and long-lived myth in English-speaking countries. If Americans were any better at math, they would run the numbers and figure that out! When house prices go UP and rents go DOWN it does not take a rocket scientist to figure out that 'demand' is not the price driver, but 'mob psychology' is!

As the old saying goes, 'Rich enough to RENT!'

Even WORSE than the financial assessment of RENT vs BUY, loss of MOBILITY in an unstable country is very costly in personal and family terms. BUY = STUCK.

The Wasatch Front real estate market is NOT different. The drama is unfolding just like it did in all of the other markets. The fundamentals do not support what has happened in the last several years. Any one that says different is a real estate agent or is attending real estate "classes", which are just a cover for good old Utah syle MLM scams.

I read the article. Does it intimate that "stagflation" is here in Utah now?

Huge inflation of basic needs and no or limited economic growth for the people who buy them?

Or does it say that their is a huge credit crunch and only the select will have access to credit?

Two questions

Does the war in Iraq have anything to do with our economic problems specifically the credit crunch?

Are we in competition with the government as they borrow to finance the war?

Second question where do we go from here?

This is just the tip of the iceberg folks. It was inevitable. Utah has trailed SoCal, Nevada, and Phoenix for the past several years. Foreclosures will be no exception. The fraudulent mortgage industry shows no favorites. Utahn's fell for the subprime and non financial (liar loans) products just like everyone else. Give it a year or two "how odd" and you will be able to pick up that townhouse for much cheaper. Interest rates will be higher by then, but don't let the mortgage/real estate industry fool you--purchase price has a whole lot more to do with affordability than the interest rate.

WHAT?

Utah is just like California about this time last year, sales grinded to a halt, appreciation stopped, and foreclosures started to inch up. All the "experts" at that time said they had reached a "soft landing" in price appreciation. Today home prices in California are plummeting by up to 40% YoY in some areas. Don't believe the koolaid drinking realtor hype that we have reached bottom and now is a great time to buy. Now is probably the absolute worst time to buy. Median home prices in Utah are way out of line with median incomes and they will come down significantly (20-40%) over the next couple of years. If you are thinking about buying DON'T. Hold out for a year or two and rent. You will get a lot more for your money this time next year.

I've heard the same thing for 6 months while the market continually declines. Would be nice if realtors didnt monopolize all relevant data. They are helpful for those that don't want/know how to do a deal, but they only get in the way/raise prices for everyone else (course its good time to buy, their livlihood depends on it, and on highest price possible-think about it-better job buyers agent does the less $$$ they earn, why would they do a good job and negotiate best prices?). Don't listen to realtors. Watch for yourself. Every house I look at calls me back begging me to come take another look, and they have lowered their price. I even emailed a house yesterday, the reply was that it was too late, he lost it. I moved here from LA last year, and the other day I pulled out a section of an old LA paper. It was from August 2006, and the headlines were the same as we read about here today. Utah is just behind about 2 years. Just wait people, realistic prices/major correction is in store. Keep watching and you will see more homes for sale, lower prices, and desperate sellers.

I had a similar conversation with an agent from Realty Executives a couple of weeks ago. What she didn't know is that I have access to a lot of raw data that shows we are nowhere near the bottom.

Hey, if you haven't received a raise, you might want to investigate what others are getting paid in your industry and bring those figures to your boss. But be prepared to get a new job if he calls your bluff. Oh, and we are bumping along the bottom. Foreclosures today are results of what has happened months ago.

I've been looking to buy a home for two years but I've been apprehensive about the prices. In all that time I've never heard even one real estate agent or loan broker say that it might not be a good time to buy. It's just not in their interest to say anything but buy, buy, buy. It's the only way they make money.

I think Utah is in for some pretty sharp price declines. Wages are weak and the prices are still too high. Just look at what's going on all around us. Colorado, Nevada, Arizona are all suffering. We'll be in the same place they are in a few months.

You are joking right? Tell me what you have after renting a place for thirty years? NOTHING. You are throwing you money down the toilet. With owning a home, after thirty years you will be able to sell it for thousands more than you put in to it. Or if you don't want to sell, you can then live in it for free. Go ahead and keep renting though. Wise investment. You probably lease your car as well, don't you?

... as of right now rents are going up drastically in Utah as more people lose their homes and flood the market.

And the glut of new construction and foreclosed homes has not yet entered the rental market, making it a competitive place with more applicants than spaces.

That always makes prices go up. At least for now.

It's good to buy, at the right time. For now, rents are going up big-time. I think the best bet for non-homeowners that qualify is to stick it out, get to know a realtor that deals in short sale/preforeclosures, and find a deal early 2009.

It's sad to me to see all these people commenting and enjoying seeing people in Utah suffer. These guys are in their own cheering section waiting for foreclosures to rise. Keep waiting and after the summer is over me and my investors buddies are going to snatch up all of the good deals. You think housing is expensive in Utah? It's STILL way more expensive in Cali, AZ, and many many other places. Investors are going to snatch up these good deals like candy.

You clowns have no clue what you are talking about.

Home prices have doubled in Utah in the past 4 years. Even though existing sales have slowed, the prices have held steady. YOU HAVE DOUBLED YOUR EQUITY IN 4 YEARS! In stable markets, you want it to double about every 15 years.

My home here in Pennsylvania has gone up 8% in the last 4 years. Utahns have gone up 100% in the same time frame.

Quit your whining and look around. Then you will realize how truly good you have it.

Our market is headed for a serious downturn. I dont trust the real estate industry at all. Are you going to tell me inflation, the rising cost of oil and food, and the US dollar declining doesnt affect Utah? Come on! All the states around us are decling ie Arizona, Cali, and Nevada. Where do you think the people who can afford $400,000 homes in Utah were moving to Utah from? Think again if you think people in Cali wont wait out the storm.

To a realtor it's ALWAYS a great time to buy.

Umm, some common sense would tell you if the market has gone up over 100% in 4 years then its due for a big correction. Look what happening in Nevada, Cali, Florida, and Arizona. Oh I forgot, Utah is different, LOL.

I would like to thank all the good people for commenting on the articles. I don't know how I would get through a full day at work without all the comical advise, ideas, facts, and spiritual comments. Please keep up the good work.

Just because realtors are incessant cheerleaders for buying a house doesn't make them wrong. I bought this Spring, and in addition to paying (including homeowner's insurance and taxes) only slightly more than I was renting for, I increased my take home income by $350 a month due to the tax breaks.

So I am paying only about $20 more a month than I was when I was renting (the same house, by the way), and getting an additional $350. That's about $4000 more a year. And I own my house!

If you can, buying still makes sense, especially if you are patient and can land a killer deal.

It's because of investors that the median home price has gone up while the median wage has not. Everyone came hear looking for a great deal and found them and because of that our market was artificially inflated and who is left to fix it now? A lot of the houses investors bought never lived in them, because they do not live here. They only bought it to sell it for a large profit. That in turn caused builders to build more houses to accomodate the demand of people actually wanting to buy a house. The investors now dump their properties and no wonder we have so many homes on the market. A lot of people these days are driven by the bottom line and are only in it for themselves.

To Investors: to blame investors for the increase in home prices is to misunderstand the root causes of inflation and investment bubbles. And to assert that "a lot of people these days are driven by the bottom line and are only in it for themselves" is to be historically naive. Can you name a time or people who were not driven by greed? People are no different today than at any other time in history.

The higher priced homes ($350k +) will see major corrections (20-30%), homes below $200K will see minor corrections (0-10%), and everything in between will see approx. 5-20% corrections.

The #1 issue is affordablity. #2 Stricter lending standards. #3 Economic downturn and all that comes with it.

Wait to buy.

"Debbie Downers" -- Good luck with your investments. The biggest mortgage insurance company just stopped insuring loans on investment properties yesterday.

A house in Murray is not a good deal just because it's half the price of a similar house Irvine, California, where the local incomes are three times greater. It's all about local purchasing power, and y'all ain't got much.

There are good deals to be had and there are bad deals to be had. I wouldn't trust a realtor that has a vested interest in selling BUT if one tries not to get greedy or in a hurry there are some excelent deals to be found in the Utah market.
Those that are in foreclosure were those that either bought way over their head or those that had a turn of luck and lost there job or income potential. So don't spend more than you can afford, even in bad times, and look for the deals. With all the foreclosures there are plenty of deals and in the short term there will continue to be good deals so don't get in a hurry and spend more than you can afford.
Given the right deal owning is still better than renting and pays off over the long term. The problem is that people often bite off more than they can chew. Remember buying the house is more than just the mortgage and insurance. There is upkeep, repairs and who know what assessment will come along. So you have got to leave a sufficient cushion to reasonably cover those expenses.

I do have a mortgage on a home, but don't consider myself a "Home Owner". I'm just renting money in order to live in a home that my bank owns. Anyone who doubts this should just stop paying their mortgage for a few months and see how long their "home ownership" really lasts.

Fact of the matter is paying rent for a place to live is no more throwing money away than paying a mortgage the majority of which is interest during the first 10 or 15 years. Particularly in a market like ours where home prices are declining and people have been refinancing and taking out home equity loans on a fairly regular basis (thus never getting any closer to actually paying off the home).

There are deals, and then there are people who are still trying to get way too much for their homes. Just do your research!!!!!

I am assuming that most of the negative comments are from people who are hoping the market completely crashes so maybe just maybe they can afford something on their pathetic salaries. Seriously if you can afford it you can afford it... if not then go rent something. Now is not the time for a short term housing investment, but housing for most is a long term investment.

The median income in utah county is about $47k. Using traditional lending standards someone making that salary should not spend more than about $165,000 for a home (3 1/2 times salary). The median home price in utah county is $240,000... meaning about 70% of the working families living here have salaries that are too "pathetic" to purchase a home. This is the reason why Utah and Salt Lake counties will see 20-40% price declines over the next couple of years... not because of negativity or pessimism on my or anyone's part... it is actually just a very simple math problem.

The truly pathetic people in this situation are the failed flippers and real estate agents who have profited from the past few years and are now crying because the party has ended and they can't seem to figure out what to do with themselves and all of that investment property that they can't sell.

The realtors are now commenting as if they are just being "helpful". They don't even tell us they are realtors as they sometimes did in the past. These cheerleaders are making all the same comments I have read for the last two and a half years in other markets.

This story always ends the same. Everybody, especially you realtors, batten down the hatches.
Go look at "flippers in trouble" if ye dare seek the truth.

I can't wait for the county to re-assess my house so my taxes can go down at the same rate they went up.

Also, when buying a home, YOU MUST consider that food and gas prices are and will go up. You can't eat a 500,000 dollar home and I guarentee you when you see Diesel prices going up it is only 3 to 4 months you will see eveything you buy go up. Have you been to the grocery store lately. Have you seen how little is being put into the wrappers. Open a bag of chips and you see one chip. Open a bag of cookies and see how creative the seller has become in making the package look full.

Lastly, why use a Realtor. They do nothing for you. I helped my friend find a house last year. We looked on the internet. We searched and found the home. All the realtor did was open the door and look stupid, and then laugh all the way to the bank when he cashed his 3% check.

Either way you look at it you pay. Never forget that a tax is like a re-occuring bill that never gets paid off. If you rent, a larger portion of your income goes down a rathole called government waste. For that investment you get a zero return. Mortgage Interest write off allows one to keep more while stimulating the economy rather than funding a study of why Americans feel depressed when they are broke.

At least with ownership there is some hope of equity building especially with some mortgage acceleration programs out there. A home becomes an asset not just a liability. The economy is stimulated with a purchase where renting is a dead end street, not to mention the landlord owns tenants because they can raise the rent anytime they choose.

By the way what happened to all the Congressional and administrative solutions to stop the foreclosure bleed? I guess they decided to let the homeowners take the hit and bail out the banks at taxpayer expense.

I'll give the Realtors this much: In a stable or appreciating market, if you can own a property for roughly the same cost as renting it, ownership is a better strategy.

In a declining market, or one in which the cost of ownership is substantially greater than the cost of renting an equivalent property...not so much.

Worst of all is overextending yourself to buy an overpriced property at the top of a market, lest you wind up "priced out forever." People who do that are pretty much too stupid to live. Realtors love such people.

Don't worry. Bush and the GOP say things are fine. Just keep shopping and buying those Chinese imports.

The numbers reported in this article are nearly worthless. By using only ratio and percentages we have no idea of the actual numbers. For example: If there were 5 foreclosures last year and this year there are 10, that is a 100 percent increase. We have no idea of the real numbers.

I love reading articles like this and then watching the reactions. Especially the "pro-housing" type who insist all is well. The Utah housing market has crashed and will get much worse over the next two years. If you don't have to buy then don't. It will only put more downward pressure on prices. We will see a 30-40% price drop in Utah. Hang on everybody this is going to be fun (or not if you are trying to sell)

Let's say my $250k home drops down to $50k in value and the bigger house I want drops from $350k to $75k in value two years from now. That would be awesome because I could upgrade by only increasing my debt by $25k instead of $100k. As long as the seller is moving to a similarly priced neighborhood, lower prices are our friend. The realtors would only be getting 3% of 75k too, which is closer to what they probably deserve. To those investing money from a HELOC, you would probably disagree as you'd like access to as much easy financing as possible.

It is not if you do or do not own, it is how do you own. I own 6 houses surrounding my rent-anchor (Hill Air Force base) mostly in the nicer parts of Layton. In 2003-'04 I told the mort guy he was crazy suggesting I take the 4.7 adjustable and so I locked in at 5.5 fixed with 25% down. I owe 720K on $1.3m. I can take a 45% loss in market-price and still be break-even because I am not selling. Rents are going up (Desnews 2 weeks ago) in Utah by about 10%. I make $1,650 every month on rent and it will be $2k by the end of the year when I get all of the houses in line with rent increases. Mobility? I live in Africe where I moved last year from China. On average housing goes up 4-6% a year. I know '08-'09 is not going to be average. But with a normal 4-5% appreciation, that we will have long-term, I am increasing in networth almost $60K a year. I get back $8-10K a year on my tax return. Go ahead and rent, from me or someone else that understands wealth is ownership.

The rent is not going up in Utah. If it blips up it will soon blip down and keep going down. I hope anyone that rents from "Landlord" will be smart enough to shop for a better deal.

Rent is going up because taxes have gone up. My increases basically have covered taxes and that is why often landlords increase rent. Everything is connected and just because someone believes something is going to go down that does not change the economic influences. How much did shoes or cabbage or gas cost 10 years ago? How much was rent 5 years ago? How much did a house cost 10 years ago? I can go on and on. Even with low inflation (which we ain't got!) prices and rent increase. Sometimes you may have plateaus but over the long term prices and rent go up. If a person locks into an investment that input cost do not go up (fixed rate mort) then inevitably there is a steady and ever increasing return.

In my previous post suggesting that 'home ownership' is NOT a universally good idea, I should have been more clear about renting but SAVING the difference between rent and ownership costs (mortgage, taxes, 5 - 7 % accrual per year for maintenance). Invested in a diversified portfolio of assets, those savings over time will add up to MORE than the equity in a house AND not only be under the control of the owner. Individual elements of the portfolio can be liquidated by the close of business of they begin to slide -- whereas with houses, it is 'easy to BUY, not always easy to SELL' A house is a rather large egg to be the only one in a basket of assets!

AS for 'having something' when a mortgage is paid off -- it may not be anything you want! Individuals have little control over what happens in their surroundings. If the area has improved, the taxes may be more than can be afforded -- and if instead there has been deterioration, YOU will not want the house nor will anybody else so you are stuck! So -- as an investment, 'IFFY.' Everything changes, faster and faster.

Owning real estate as a business is a quite different thing than owning personal real estate to live in. BUSINESS is the true religion of the U.S., and the laws reflect that.

For landlords, every little packet of nails is deductible -- not so for 'homeowners' who usually block out what it is actually COSTING to live in places they own.

So great is the difference between being a landlord and being a resident owner that a few years ago it was becoming popular for two families to buy identical properties and RENT THEM TO EACH OTHER. Many expenses were thus deductible, and if somebody had to relocate and sell at a loss, THAT was deductible also.

However, the IRS stepped in and put a stop to that. When it became necessary to have MORE than two families involved, the system fell apart.

As a final note, we lived in Washington, D.C. for many years and noticed that when administrations changed, Democrats BOUGHT while Republicans RENTED. And we all know where the money is ...

If you live in a home it is not an investment. By the time you pay interest, taxes, mortgage insurance, water, garbage and maintenance you are losing money. The mortgage interest you can write off on taxes, which is probably not going to be the case much longer, doesn't make up for the amount of money you spend. If you have a home(s) that you rent out that is an investment.

Rents may go up in the short term, but not in the long term. After home prices decline 30%, rents will go down.

Gas is going to go down too, right? Tell that to the 1.3 billion Chinese and the 1.1 billion Indians who are becoming more and more consumers everyday. Everywhere and with everyone we have to compete with for finite resources will have an influence to push prices up. The world is not status quo. Innovation has impact on economy, but finite resources such as food, petroleum and energy, not to mention water is pushing on the world. As much as I would like to blame this on oil companies, OPEC and stupid uninformed borrowers I can not lay it all at their feet. Africa has seen an increase of 6% economic growth in the last 10 years. We are competing with new people and have not kept up out edge. We may or may not pass through this economic downturn still on the top, but we will not continue with the incredible dominance that we used to enjoy and expect.

I recently sold and will sit on the sideline until simple ratios line up again. Honestly folks, creative financing artificially inflated the market. I suspect prices will line up around the area they were at 5 years ago. If you bought at the top of the bubble I am sorry for your loss, but no one refunded me money on stock investments that went bad and the gov't didn't bail me out either (unless you consider the 3k capital loss I can take each year). If you think a rebound is in store I suggest you look at the NASDAQ when the tech bubble popped. 6-7 years later it still mires around 50% of its highs.

Hi Folks,

It is what it is.... in other words the price is only what you are willing to pay and what you can get financing for. Yes the Market helps determine that, but what exactly is a market? A flucuating measure of how an item including houses are being purchased and sold for. If you think that buying an expensive house is the right thing to do and you have the money, then by all means buy it! If you are waiting to see what everyone else will do, then you will just wait and they will determine your future purchasing. We are all an element in the market place and thus each of us make an impact when we make a decision to buy or sale property. For Thought!