Deseret News | Utah real estate 'healthy'

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Utah real estate 'healthy'

Craig Pattberg | 9:37 a.m. Nov. 28, 2007

It is refreshing to see that people are realizing that our slowdown is artificial.

The number of units sold year over year is down considerably but appreciation is still accumulating.

October 2007 the number of units sold is down 38% from October 2006. Yet appreciation in the last 12 months is up just over 2%. The 60-year average for appreciation in the US is 5% per year. In the last 5 years Utah has averaged 13.7% - not to bad!

The spring of 2008 should be a great time for real estate sales. With sales down dramatically this will create a 'pent up' demand. It turns out that now is a great time to buy.

Yesterday I was looking at a beat up home in Sugarhouse. It is bank owned. There were 4 groups of people looking at the home at one time. Offers had to be in yesterday. The rumor was that 10 offers were being submitted. That is a strong indication that local investors believe that things are still quite good in the Salt Lake Valley.

Craig Pattberg
Allpro Realty Group
(801) 808-4567

phil | 2:26 p.m. Nov. 28, 2007

Artificial Slowdown? You've got to be kidding Craig. The only thing that's artificial is the already high price of homes. Mortgage fraud, speculation and non existent lending standards all contributed to these artificially high prices and now the market is correcting itself. I'm glad you don't thing a 38% decline in sales is bad news because sales are going to get a lot slower as credit continues to tighten up. You can talk about market fundamentals until you're blue in the face but cold hard fact is fundamentally the average 50k a year income does not support the 300k average home. I've got nothing against people trying to be optimistic, I'm normally a pretty optimistic person myself but there is a time to be optimistic and there is a time to look at the facts. The facts say real estate is in for some real tough times, even here in Salt Lake. Quit trying convince people the problems in real estate are temporary because they obviously are not. I don't know how bad things will get but I know we haven't seen the worst of it yet.

cheerleading | 2:52 p.m. Nov. 28, 2007

It is a very predictable outcome when a residential realestate article seems like a lot of cheerleading. Just skim through the article to see if the quotes and analysis are coming from a person who makes their living on the sales side of realestate or the academic side. Lets just say, we aren't reading the words of a bunch of economists. We would do well to stop drinking the cool aid.

Comments continue below

The market is not so bad | 3:19 p.m. Nov. 28, 2007

Funny how some people love to declare the "sky is falling" about anything. We just sold our house in less than a month for within 1% of full listing price, and we priced it right where the comparable homes had sold for. And the best part was there were a lot of homes to choose from so we found a few we liked and settled on the best one.

Last time we bought (two years ago) there was nothing to choose from.

If you are buying right now this is a great market. There are homes selling all over the valley- people always need and want to move.

Facts a lot | 5:16 p.m. Nov. 28, 2007

I am of the opinion that realtors are Evil. They don't spew optimism, they spew poison. People, realize that anytime a commission is involved, it will always be a good time to buy from their standpoint. Why, so a realtor can bank a commission. They care not for your well being. Its all about their pocket. Look around your neighborhood. Do you see empty houses. The bottom is falling out of real estate. Realtors do not have your best interest. Don't listen to those who at this time are lower than the mortage brokers in my opinion. We are in a housing recession and trust me if you buy now, your investment will lose money. Bank on it. Rent and save your money for when houses will be cheaper which is in 2009. There is no historical information for what the housing market will face from this point. Don't catch a falling knife nor drink the koolade spewed by satan's spawn.

Jimbo | 8:51 p.m. Nov. 28, 2007

I'm not going to say that you're all wrong, but there is reason to be cautiosly optimistic. A one or two percent increase is probable next year and that's because the interest rate will likely fall to around 5.5 percent. (it just dropped under 6%)

That's going to take some of the renters out of "save mode" and into "buy mode" and this will have a ripple effect throughout the valley. There are thousands of Utahn's that are actively looking to purchase right now but they have not been able to sell their homes. As interest rates drop, you are going to see 1000's of renters across the Wasatch front enter the market realizing that waiting to buy when interest rates (and therefore monthly payments)are low, will potentially cost them more than waiting for prices to drop. Our only hope is that speculators and investors don't start buying again when this happens--that's what artificially inflates the market and that's healthy for no-one.

Trick or Treat | 9:55 p.m. Nov. 28, 2007

phil and cheerleading,

You two know what you are talking about. The rest of you torture the skewed statistics to within an inch of their lives. I want to thank the realtor for admitting he's a realtor. Many realtors troll in their ample free time commenting without admitting their vested interest. I'd drop the "great time to buy" line though. Everyone knows that is straight off the NAR talking points.

Trick or Treat | 10:10 p.m. Nov. 28, 2007

Oh and sorry,
Jimbo you are spot on as well.
This is a slow train wreck. This will take a while to settle in. Utah is not isolated nor immune. Utah is directly connected to the credit markets. Credit could go back to being local but as of this date it is largely national, in fact, international in scope. The vulnerability to an economic downturn in Utah is immense. We will be in denial for a little while longer. The realtor could take me out to lunch if he's wrong about things improving in the spring. Wait, maybe he'll need me to buy him some lunch.

Trick or Treat | 11:11 p.m. Nov. 28, 2007

I said: "Oh and sorry,
Jimbo you are spot on as well....... "

I meant "Facts a lot" not Jimbo.

Bingo | 3:51 p.m. Nov. 29, 2007

Hmmm. Maybe the prices won't come back down. Utahns love to blame all their woes on outsiders, particularly Californians. However, 80% of Utah's population growth was internal last year (lots of babbies being born) according to the Governer's Office of Planning and Budget. As long as there is a baby boom going on in Utah the demand for homes in Utah will be high. As long as the demand is high the price will be high.

I'm guessing here but I'll bet that at least 38% of the mortgages last year were financed using sub-prime loans which are no longer readily available. It doesn't sound like a coincidence to me.

I imagine that what is happening in the rest of the country will happen in Utah as well - families will get smaller and mom will get a paying job.

JM | 6:40 p.m. Nov. 29, 2007

I've had the fortunate experience of talking to a couple of realtors who have advised me to wait to buy if possible. Not fly-by-night realtors but seasoned professionals with 20+ years experience. I take their advice very seriously.

As a potential buyer, I've seen many houses just sit there and the asking prices are dropping (in Utah county, esp N County). Newsflash: the demand for $500k McMansions has been met. Many buyers like me simply won't pay these ridiculous prices; I don't care WHAT the interest rate is. I definitely don't want to catch the proverbial falling knife.

Just drive around Lehi and Highland, you'll see many spec houses with "For Sale" signs. Kind of like a ghost town, especially around IM Flash. Drop the prices, builders and sellers, and maybe you'll find some other Greater Fool.

Anonymous | 7:41 p.m. Nov. 30, 2007

"the demand for $500k McMansions has been met"

Fantastic line!
Check out the McMansions clustered around the waterpark in the 84606. No lawns but they want top dollar. Some of these speculators are going to lose their shirts. Why are all these particle board boxes being built with rock stuck on them when REALLY energy efficient designs are available? I doubt many of them will last more than 30 years or so without major repairs being needed.

Realty Advantage | 1:01 p.m. Dec. 1, 2007

Wow! Facts a lot you probably have an ulcer. The sky sound like it is caving in on you. I am a Realtor and the inventories are up every where. The sub-prime market is non-existent. The people who got loans at 100% with 50% debt ratios, and low credit scores shouldn't have gotten loans anyway. Bingo has some good points. Prices have begun to drop based on simple economics. Excess supply means reductions in prices and when there is an equilibrium prices and inventories will be balanced. We may not see that for a while. The hyper growth and escalating prices were driven by lack of supply and in large part a market correction on the positive side. You need to remember we were in the bottom 10 markets in the nation from 2002-2004. Now the market has slowed but we still have a healthy rate of appreciation. All the external factors that drive a healthy real estate market currently exist. Job Creation, Unemployment rates- 2nd lowest in the nation, Increase in population-80k plus in the past year, Low Cost of living , etc.....Many factors motivate people to buy and sell, the market conditions are one of them.

Trick or Treat | 4:17 p.m. Dec. 1, 2007

Realty Advantage,
Sounds like you are the one that will have an ulcer soon if not quite yet. The positive factor, employment, you stated will be taken down as the economy enters a severe recession. Check back in 6 months.

We don't have a "healthy rate of appreciation". Prices are falling. Anyone who tells you different is just torturing the statistics. You are right that at some point prices will be appealing to those with assets or secure jobs. Those same people would be well advised to avoid catching a falling knife by waiting for the smoke to clear.

The process of prices falling will unfortunately involve a lot of pain for a lot of families. This has just barely started.

Oh, and thanks for disclosing you are a realtor!
Honesty is good. (Other realtors take note)

richard saunders | 8:45 a.m. Dec. 27, 2007

Utah is basically strong and this is just another cycle going to the downside, I've seen this happen here every 10 years or so forever. Yes, some people will get hurt but thats always the case. Can't really be helped. I do notice that when times are booming realtors can't wait to help you, but when times are tough and they can't make an easy buck they all run away leaving you to sell the house yourself. Happened to me in 83, they ripped me off, then wanted me to take a big loss to pay them again when I needed to sell. I do believe the used car dealers on State street are more honest folk than your average real estate agent, and work a lot harder for their money.

LuckyLarson | 1:01 a.m. Jan. 21, 2008

I am a real estate investor. I am not an agent. I trust a few of them to really give me the straight truth without bias. They can't help it though. They are fed tainted stats and interpretations in every meeting and newsletter. I have bought and sold dozens of properties in Utah, California and Hawaii. Yes, there is a train wreck. In most train wrecks there are some people who get hurt, some people who vow never to ride trains again, some people who escape unharmed, and some people who get paid very well to talk about or clean up the mess. I would not buy a property right now with expectations of short-term price appreciation but there are really good opportunities for smart investors. Long-term rentals with positive cash flow are great, including smaller single family homes, town homes and also condos in the right areas. The tough part is getting the money. Investor money is scarce and expensive these days. Good luck to all of you as we pick through the rubble.

Bill | 9:02 p.m. Jan. 28, 2008

SL County 2007 Single Family Average Sales Price - 3rd Quarter

$310,567

SL County 2007 Single Family Average Sales Price - 4th Quarter $286,250

Source: WFRMLS XL Quarterly Comp Reports

Van | 7:47 a.m. Sept. 15, 2008

Some people posted in this page are doing UTAH real estate business. I donï¿½t trust them at all. What kind of skill they have other than selling housing with lying. Lie after lie. Those people made American economic down. Really, what else they can do? In big % of UTAH business are real estate. Really what else they can do more than selling house.

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