Deseret News | Real estate still looks rosy in Utah, local experts say

Reader comments
Real estate still looks rosy in Utah, local experts say

Jeff | 1:59 a.m. Aug. 16, 2007

It sounds like Mr. Wright is blaming high home prices and ground prices for a sluggish new home market when in reality the company he works for has been one of the key factors in biding land prices higher and escalating home prices. Up till now it has meant huge profits for Ivory. Now they sing the blues? You canï¿½t have it both ways Mr. Wright.

angie w. | 7:53 a.m. Aug. 16, 2007

what a ridiculous story. The D news flip-flops all over the place on this issue. Either it's a good real estate market, or it isn't. The reality is my husband works in building and there IS a correction in pricing, and sales ARE falling. Any real estate agent or builder will tell you that. The current asking prices are too high, and the people who have to sell are lowering their prices. This is slowly driving asking prices down. Why does the D news keep running these misleading headlines? And even more bizarre, why would they run an article with the headline "real estate still looks rosy in utah" and then proceed to write an entire article disproving their headline?

Vett Crofts | 7:58 a.m. Aug. 16, 2007

I disagree with John Norman's assertion that the Utah market is strong. I have had personal experience trying to sell a home and have several friends who are real estate professionals who confirm that the market is stalling along the Wasatch Front.

Comments continue below

Paul | 8:35 a.m. Aug. 16, 2007

The Market "still looks rosey"???? Are you serious? I have two homes on the market. One home I have had to lower the price to $85 per square foot. built in 2004 and completely new inside with over 3400 sq ft finished for $309,000. This is a joke. Someone step up and tell the real story please.

Rick | 9:02 a.m. Aug. 16, 2007

The headline here is just completely wrong. As mentioned in earlier comments, the content of the article does nothing but disprove the headline. This is of course not to mention the fact that the actual reality that we are all experiencing disproves the headline as well. As Kelly Matthews indicates, you simply cannot have a livable mortgage based upon today's average home price with today's average income. But, anybody could have said the same thing 2 years ago.

Jason Read | 9:17 a.m. Aug. 16, 2007

The severe pullback in mortgage lending occurring over the past month will affect the Utah housing market. Prices will decline because easy money, no-doc, teaser rate, toxic mortgages that have been pushed by unscrupulous lenders are no longer available. The simple fact is that even with strong job growth, Utah wages cannot support the current housing prices. My guess is that this story is an attempt to appease the real estate cartel who spend a good amount on advertising with D news.

Steve | 9:25 a.m. Aug. 16, 2007

Indeed a confusing story, or at least headline. Just last week Mr. Matthews was on KUER with a local broker, the latter verifying that the market is flagging significantly, for 2 primary reasons: lack of affordability and reduction of stupid loans that will surely haunt many who have them. Sure, it's not a crisis yet, and may never be, but the market is slowly returning to a more reasonable level. Oh, and another way you can tell the market is slowing? The number of "for sale" signs are increasing dramatically and many include "price lowered" signs on them. Many homes are sitting a lot longer before selling. A good thing.

Thomas | 9:44 a.m. Aug. 16, 2007

All real estate is local -- but all real estate financing is international. Just as most trends show up late in Utah, the real estate boom did, and the unfolding real estate bust will, too. Utah was simply the next field the speculator locusts set out to devour, once they'd ruined California, Las Vegas, and Phoenix.

Folks, it is an iron law that real estate values don't go up, long-term, faster than growth in purchasing power. Cheap credit artifically goosed demand for a time, but that cheap credit is gone. A disparity between incomes and housing prices will always adjust to equilibrium.

Chad | 9:59 a.m. Aug. 16, 2007

The DesNews tends to have rose-colored glasses at times, which can be nice, but not helpful for those in the real world. In one sugarhouse zipcode, for example, 87 homes have gone on the market in the last 30 days. A year ago it was half that number.

Interestingly, also today, the Trib runs a more accurate story about the housing market.

http://www.sltrib.com/ci_6636084

owesley | 10:40 a.m. Aug. 16, 2007

Talk to any builder, any developer and any 'real' real estate professional and they will ALL say the SAME thing. The market in Utah is going to follow California and Nevada. One national mortgage company just laid off 17 Thousand people. Another over 5 Thousand. Those are THOUSAND folks, not hundreds; And as has already been said, they were big players in the sub-prime market. I know a developer who has not sold a home in five months. I know another developer who has not sold in 4 and a half months. From Park City to Santaquin, the market has slowed. Last week in one California city there were 167 foreclosures.....Of 500,000 people; That followed a month of OVER 1500 foreclosures in the same city. I think the D-News is the most responsible and most reliable of all papers....but this article heading is off base and the content does not address reality.

Chris | 10:43 a.m. Aug. 16, 2007

Hold on Utah... there is a serious 'correction' coming. Just like everything in Utah, we're behind the rest of the country... when home prices were going crazy in the US, Utah held steady, when a 'correction' hit the rest of the country, Utah went up. My point, look what's happening the in the rest of the country (especially regionally, ie Nevada & Arizona) and you'll be looking in the mirror in the months ahead.

Jim | 10:52 a.m. Aug. 16, 2007

At Utahrealestate.com which lists the houses for sale in SL County and other areas of the state, the number of houses for sale in SL County is approximately 18,541 amd this number changes freqently throughout the day. 4 Months ago the number was well under 10,000. I've seen homes in my neigborhood for sale for 6 months or longer without moving, even though prices continue to drop.

The supply is higher than it's ever been and builders are starting to finish up projects that have been in the pipeline for the better part of a year. Mortages are harder to get. Ajustables will be resetting soon and there will be more distressed properties on the market with people unable to make payments and trying to sell.

It will get a lot worse before it gets better. "Rosey" is not the term to be used in a headline....

JM | 10:52 a.m. Aug. 16, 2007

Just moved here. Could have bought, but can rent for 50% less than what a mortgage would have been on a comparably priced home if I had bought. I'm waiting for the dust to settle. I'll enter the market in 12-18 months.....that is if I can find a mortgage. Oh yeah, and if I can get my home in the east sold. The market I left has 135 homes for sale while the long term average inventory is 35-45 homes.

Folks, in my opinion it is just the beginning of the ugliness and if the market is "rosy", that's just the beginning of the "inflammation".

Mark | 11:01 a.m. Aug. 16, 2007

I live in Arizona and just spent 5 weeks in Utah, looking at real estate. I sold one property and was looking to buy another. Almost without exception, every property I looked was offered to me at a substantially lower price than listed. I had desperate owners calling me back, lowering the price even further, asking me to buy their property. My reponse? I'm still waiting because the prices are going to get even lower.

Bubbleburster | 11:20 a.m. Aug. 16, 2007

I agree Mark. I just moved here and was looking to buy. After getting a better picture of the market, I see the trouble coming. I am now renting for much less than purcahsing, and have had over 5 people call me back telling me their contract fell through, they have significantly lowered the price, and asking if I would be interested in looking again. I don't think so. Wait a year or two and then the picture will be 'rosey', at least for buyers.

mundaka | 11:36 a.m. Aug. 16, 2007

Good points on all these comments. I woander if D News actually reviews them to see how out of touch some of their articles actually are. Yep, Utah is the next domino behind Nevada, California and Arizona. More and more people here are realizing that, despite how the D News keeps trying to spin it.

Brady | 12:28 p.m. Aug. 16, 2007

I think you're all CRAZY. I don't care what any of you think. Utah property values are going to continue to increase despite all your worries. Fact is:
1 - the number of people moving here continues to increase (thanks Mexico) and always will
2 - the job market rocks (businesses are booming)
3 - gas prices just keep going higher (which effects everyone)
4 - Everyone needs a home and those graduating from high school/college are filling the home shopping market quicker than the folks who die and leave.
5 - Like somebody famous once said: Buy land because they're not making anymore of it.
6 - Homes go up in value commensurate with the costs of replacements (building materials, etc).
7 - In Utah, have you EVER seen a period where homes actually depreciate for more than a year?
8 - What is going to happen is RENT will go up drastically because of all of this. Watch and see.
9 - Somebody has to own the home - and banks would rather earn interest from somebody than to hold on to them and make the equity. The loan industry will change sooner than the real estate "bubble".
10 - PREDICTION: Just when you think the sky is falling, something big will happen to change everything. Homes aren't like the stock market - you can't live in a 401k.

Craig | 2:02 p.m. Aug. 16, 2007

Just finished the paperwork on selling home, got offered more than my listing price after it was on the market for eight days.

It was a lower priced "starter home". This leads me to belive that the price on the McMansions will drop.

Thomas | 2:07 p.m. Aug. 16, 2007

You can't live in a 401K, but you can't leverage it 100%, either. It takes at least an 80% drop in the stock market (which we haven't had since 1929) to wipe out your 401K, assuming you've used margin. If you've put 10% down (and who does THAT anymore?) on a house, a 10% drop wipes you out. 11% puts you underwater.

Property prices don't shoot up $100K in a couple of years without a correction. Property prices WILL go up -- long-term, and from a sustainable baseline -- as the economy grows and the currency inflates. I just think we've used up about a decade's worth of appreciation in the last two years. It will be a long time before any significant appreciation returns.

Jack | 2:28 p.m. Aug. 16, 2007

Many of the people who moved to Utah sold their homes in LA and moved were homes were cheaper and crime was less. Utah is effected by outside economics. Job creation is related to liquidity. The problem in the equity markets is liquidity. Notice, consumer spending is down?

All markets are cyclical. If you invest you should be glad they are. If you are waiting to sell. Don't wait longer. Smarter buyer don't buy at the peak of a market.

It's not number but incomes that feed markets. The number in Mexicans doesn't effect the cost of a Mercedes. You a bank with many repos. The market is soft. You can't sell homes. You rent them to gain cash flow.

Smart business is knowing when to sell and when to buy.

Mark in AZ | 2:45 p.m. Aug. 16, 2007

Thomas - you are right on the mark. Here in AZ, home prices doubled in 2004-05. Whole subdivisions were bought up by out-of-state investors and were flipped in a year or two, leaving an over-priced home in the hands of the little guy who bought it now faces all the mortgage problems you are hearing about in today's news. Homes have become the wealth-building investment of the rich elite, not a place to live for the average person.

A trip to Utah earlier this summer shows me that the same thing is happening there. Whole subdivisions there seem to be bought by individual investors as investments, which is driving up the prices for the eventual homeowner who wants to (believe it or not) ACTUALLY LIVE IN the house!

Despite the underlying growth factors mentioned by Brady, the abuses by the moneyed elite are going to keep my children from being able to buy a house in Utah for many years. "The rich get richer and ... well you get the point.

Thomas | 4:15 p.m. Aug. 16, 2007

I'd also add that the number of Californians selling their $600,000 shacks and spending that money driving up Utah prices is about to dry up like Sevier Lake in a drought year. Nothing, but nothing, is selling here in August, now that jumbo loans (which you need to buy pretty much *anything* here) have dried up.

Fred | 4:21 p.m. Aug. 16, 2007

Let's all remember what Ivory did in August 2006 (1 year ago) when it saw this problem...

http://findarticles.com/p/articles/mi_qn4188/is_20060829/ai_n16694143

Too bad very few people listened.

My opinion | 4:24 p.m. Aug. 16, 2007

Yes, the Real Estate market is slowing and I believe the reason for this correction is the many Spec homes that have been built. I don't believe the #1 reason is the high prices, but the fact that many individuals (not home builders by profession) jumped on the Spec home train and thought they could make a healthy profit. Many of these people did make a nice profit, but now we have too many homes and not enough buyers. It goes back to the Supply and Demand equation. Our supply is too high. I know this is common sense, but just an average joe's opinion!

Ralph | 5:34 p.m. Aug. 16, 2007

Don't underestimate the far reaching effects of the current liquidity crisis and the mortgage melt down. A large percentage of the end buyer market has already been nuked with the virtual elimination of the sub-prime market. And don't be fooled that much of the A paper mortgage world doesn't look just like the subprime stuff. When the dust settles, how many buyers will sitting on the sidelines merely from changes in the mortgage markets? 30%, 40%, 50%? That, folks, is a corresponding reduction in demand for housing that will affect Utah in equal doses to the rest off the nation. Look for the market to deteriorate over the next several months.

Joey Shabadoo | 5:52 p.m. Aug. 16, 2007

Makes me glad I got myself a 30 year fixed interest rate mortgage in a house I can actually afford. I find it funny that even here in Utah where the prophet has been telling members for at least the last decade to get out of debt that people are surprised by the upheaval in the credit world. Don't you think those warnings were there for a reason? I am no prophet but it doesn't take one to know that we are in for a long term down turn in the real estate market. Unless you are one of the few individuals who can afford to make a 20% down payment on a 400,000 dollar home you aren't gonna be getting a loan anytime soon.

Ken Goddard | 6:03 p.m. Aug. 16, 2007

So take all that, Deseret News. By definition, Utah housing is subprime.

Lee | 6:05 p.m. Aug. 16, 2007

I'm really glad that we had a job transfer last year that forced us to sell our home and get out of the Utah market while it was "hot". We were able to purchase an equivalently sized home in a buyers market for quite a bit less than we sold our Utah house for.

There are warning signs everywhere that a crisis is looming. The higher mortgage rates combined with the cutoff of jumbo-loan lending will severely reduce the pool of qualified buyers. People who have to sell their homes to try and escape a crappy interest only tied to prime situation will have to go bankrupt.

Alan Barker | 7:15 p.m. Aug. 16, 2007

It's all relative, compared to California, Florida, Nevada, and most of the nation, Real Estate is doing quite well in Utah. We don't have nearly the problems they are having.

The stuff going on with the mortgage industry going to make things worse everywhere..... Just be glad you're not trying to sell in California right now... Icompared the that Utah Real Estate is Awesome....

derek | 11:38 p.m. Aug. 16, 2007

I bought a new house for $280k one and a half years ago and just sold it for $340. I am happy,the market is great and i sold it without a blood-sucking realtor. Just a little sign in the yard and every realtor in town called me and said I could never get what i was asking. Real estate is more about staying power than anything else. You cant consistently make money unless you can stay in the game without cashing out. I learned the stratedy from the casinos in Vegas. The last one at the table wins.

derek | 11:40 p.m. Aug. 16, 2007

Mark | 9:13 a.m. Aug. 17, 2007

These are terrific comments. Congratulations D-News on a lively discussion by very savvy readers. Nobody mentioned property taxes. Ours went up 69% on our house due to an overheated local market that is now dead. The county doesn't back off, however, or roll back its levies. It wants to ride a crest that is past.

Sam | 3:57 a.m. Aug. 19, 2007

I am absolutely SHOCKED to see all these comments that indicate a lot of people are waking up. I have watched this echo boom course through Utah with all the attendant greed and clueless euphoria.

Some speculators cashed in as well a lot of mortgage brokers. The same happens in multi-level marketing and ponzi schemes.

Ultimately the quality of life will be poorer as this boom busts and the property taxes will cut deeper.

It is gratifying to see that there are sharp people out there that aren't "drinking the kool-aid".

Vegas Resident | 8:38 a.m. Aug. 29, 2007

Oh how the articles I see and comment I read echo those of us that live in Vegas about 2 years ago. We blindly agreed that even though the boom was ending, all would be well since we also having a thriving economy, high job creation, large resident influx and are better priced than our neighbor California. Utah would do well to review all the articles about Las Vegas from 2004-1006. What you will see is the future of the market there. Increasing inventory, drop in building permits, glut of inventory and eventually the drop in prices and sales. Welcome to the hades created by investors and greedy lenders. Welcome to the road Las Vegas has been on for 2 years. We were naive then but now face the harsh reality of what a booming real estate market and investors did to us.

Modesto Guy | 2:28 a.m. Sept. 6, 2007

I been looking at real estate in Salt Lake for about two weeks and alot of the houses that were in contract two weeks ago were back in the market this week. Many fall through the last min. do to new sub-prime regulations. The three streets near my brothers house that I was looking at had two listing two weeks ago, today there were seven. Wait it out, rent and save 50%, 95% of your mortgage goes to interest the frist seven years anyway.

LoanGuy | 10:53 a.m. Sept. 25, 2007

My background. I'm a loan officer. I also sold my house in July when the market was still alive and subsequently bought at the top of the market as well. I purchased my house for $359k. Right now, there are two comparable houses sitting on my street priced at $339k with NO action. The market has slowed, PERIOD. I am doing less loans now...PERIOD. It will get worse before it gets better. Fortunately, there are plenty of loan products out there for credit worthly individuals. 100% financing is alive and well for the responsible borrowers. Would I suggest financing 100%? NO. But it's there. If you are thinking about buying a house, there's no problem with that. Don't let the media scare you. Jumbos are alive and well with the right lenders. Buy under market value and you will be fine. I think we will see about a 8-10% correction in home prices above 300k. 5% in median home prices, and unforntately 12-15% in high end homes. Bounce back to level in 18-24 months here in UT. We are not CA, AZ, NV, or FL. UT didn't explode.

Kurt | 7:21 p.m. Sept. 27, 2007

Great comments. I just moved to Utah from the DC area (Virginia) and being here is like traveling back in time about two years. Same issues, same debates, same comments, same false beliefs about prices. Nobody thought prices would plunge in the DC area, just never happens there either... but they did, and they will drop in Utah. And don't bother with the in-migration or strong economy arguments. DC has those benefits as well, plenty of in-migration, jobs in DC are plentiful, and salaries are higher than Utah. But when prices exceeded the ability of buyers to pay mortgages, major price drops become inevitable.

There is a time for all things, and now is the time for prices to drop, until they are affordable again. The only thing that is 'Rosy' here is the glasses being worn by the press in their coverage of the Real Estate market. Utah is not immune to economics. People here in Utah need to face the fact that the street price is on its way down, probably a 30% price drop is required to make housing affordable again.

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