Deseret News | Foreclosure future grim for Utahns

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Foreclosure future grim for Utahns

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the way it is | 1:44 p.m. April 17, 2008

Every country has its turn on the top of the heap.
All eventually fall to another country.
The United States of America is no different.

Live with and appreciate that the best things in life are truly free.

Re: Spend @ 1:00pm | 1:45 p.m. April 17, 2008

You forgot to add:
Please, don't save your IRS/Government stimulus check, brought to you by your loving "Parents", the Democratic Congress!

V | 1:52 p.m. April 17, 2008

I think this picture is much bigger than we're talking about. Homeowners are often ill educated and can be persuaded (and are) by lenders that they can afford more than they should believe. Buyers often don't understand cost, interest, appreciation, or risk. Lenders have high incentives for signing loans, and this bubble market had been the latest hot way to increase revenue for lending agencies -- in the short term. Investors count on dividends from the money they are persuaded by lenders (sometimes with faulty evidence) to fund. And investors aren't just those on Wall Street. The little guy's 401K's and Employer retirement funds, etc. bank on these investments paying off. In short, it isn't just naive buyers, greedy banks, or cut-throat investors who will be hit with this. Everyone suffers when a market bubble bursts. For most of history, real estate has been the bedrock of our economy, the safe bet investment. That's why it's the American Dream. This has been taken for granted, and why so many don't seem to take this crisis seriously. So, it's everyone's and no one's fault, and everyone will pay when the housing bubble fully bursts.

Comments continue below

Re: Full Perspective | 1:50 p.m. April 17, 2008

This post provides the most insight into the cause of the mess-GREED. It's not one person's fault, as much as we like to point the finger-a lot of different parties were involved. Banks, investors, underwriters, real estate agents, borrowers, have all contributed.

You can point blame at the borrower, yes they should have become more educated before jumping into an unrealistic financial situation-however. However, many borrowers trust financial intermediaries to provide them with realistic loans and rates, not loaning them amounts they know full well the borrower will not be able to repay (they do this because in most cases banks make their money off the loan transaction, and then sell the loan on the subprime market). It was in their best interest to push ridiculous loans because everybody makes money-the bank, the investors, the real estate agent who receives typically 6% fee off the loan value.

All of these people receive money from the transaction, they promote flipping, inflated home prices, in attempt to sucker the borrower into thinking they would get rich out of taking out a bigger loan than they could afford. In short, everyone is to blame.

Anonymous | 2:26 p.m. April 17, 2008

Spend 1:45 forgot to add:
"...and don't forget to spend your tax rebate on the wonderful war Bush and Cheney got us into.
Just send it back.
Uncle Sam Needs YOU!
And your money!
Otherwise you are a bad American!

Re: Re: Spend @ 1:00pm | 2:36 p.m. April 17, 2008

You boldly state: Please, don't save your IRS/Government stimulus check, brought to you by your loving "Parents", the Democratic Congress!

Ahem! GET YOUR FACTS STRAIGHT!

Though the so called 'Democratic Congress!' voted for the stimulus check (which also had a huge Republican contingency vote for it also (considering that the Dems only hold a 'simple' majority in congress)), IT WAS BUSH WHO ORIGINATED THIS STUPID POLICY!

You seem to forget that one of the largest conservative think tanks and a conservative economist have both said that President has singly handedly done more to bring back "Big Brother" government, not seen since FDR, and worse yet, he has put this nation into the sliding recession its in, and Bush is the first president to EVER go to war with no means in place to pay for it but instead in-debt the nation to foreign nations (China, the Saudi's, etc.), and have two back-to-back years of multi-trillion dollar budgets, record deficits, and a ruinous legacy of rewarding the rich, privileged and scab profit takers, while making war on Middle Class America.

Bush (and the backseat president Chenney) have brought 'Big Brother' Big Government back in a way ultra-Liberals could only dream of.

Poor article, weak comments | 2:38 p.m. April 17, 2008

Haughtiness and lack of accountability. That's what I read here. There seem to be a lot of supposed professionals on here with nothing better to do.

SueaRealtor (r) | 2:44 p.m. April 17, 2008

Why doesn't anybody blame the realtors? Sure, it was not their fault, they were just saying what buyers wanted to hear - that prices always go up. At the very least they were doing a lousy job. The biggest lie ever propagated was that realtors are impartial and we need two, one to represent the seller, one for the buyer (who then split the proceeds, tehehe). I certainly couldn't be objective if my paycheck depended more on what I don't do than on what I do. Anybody who bought at the peak: for goodness sake, sue your realtor. They had (and still have) a license to print money.

Jimmy | 2:54 p.m. April 17, 2008

I don't think the rate of foreclosure will be quite as high as predicted in the article but without question it will be higher than a lot of the disbelievers think. It seems like almost everywhere in the US people thought it was wise to use their homes as ATM machines without thinking about what they could really afford to pay later. Others bought homes with highly inflated prices thanks to a few dozen bad apples in the mortgage and real estate business along with a few hundred speculators who were overly greedy. Do I think Joe Neighbor should lose his house, not really. Do I think the speculators should lose everything they have, absolutely.

Re:Poor article, weak comments | 3:18 p.m. April 17, 2008

Welcome aboard!

Holding out too! | 3:59 p.m. April 17, 2008

I know it irritates some people to read about anyone holding out. Us holder-outers represent a resistance that is keeping a lot of overpriced homes from selling. Or maybe it bugs some people because it sounds like we take pleasure in watching others lose their homes. I personally don't enjoy seeing that. The only reason I think the market needs to decline is because prices are unfairly high. Just like I want others to be able to stay in their homes...I, too, would like a place to live. Others hastily bought while my husband and I came to the painful realization that we couldn't afford even a modest starter home unless we depended on both incomes, which we felt was risky. If WE could figure out that there's something wrong with that picture, why couldn't anyone else? We sure got criticism for it. It's not about wanting others to fail. It's about having hope for the same chance others got five or more years ago...the chance to afford a decent home on a 65k income - something with a yard for $170,000 NOT 5 feet from the airport. I'll happily live there...but ~$170k is too much to ask.

Anonymous | 4:13 p.m. April 17, 2008

Poor article, weak comments -
Uh-Oh! You will be hearing from our resident neocon - Thomas, about that. :>

Get Real | 4:23 p.m. April 17, 2008

This article is bogus. Media is bogus.

Real Estate is still a great investment.

Be optimistic. All of you naysayers on this board are poor.

The rich are rich because they don't listen to people like you.

Shut up and take control of your life! Don't let it control you.

Anon | 4:35 p.m. April 17, 2008

To the guy who said SLC won't crash as hard because we only saw modest appreciation during the boom: Since when is 22% YOY several years in a row MODEST? Unless all our paychecks did, it's not sustainable.

Oh, and to say that prices will go back up because inflation will drive it? I think it's the other way around. The more stuff costs, the more cash-strapped we become. This only limits our homebuying budget.

Please quit trying to "warn" those waiting that the bottom might come and go before we know it. We're the ones paying the most attention. We'll buy when it's fair, period.

My favorite comment here: "I enjoy homeownership while you enjoy rental receipts." Umm...unless you have some serious equity in your home, we're all renters. You just rent from the bank while they graciously let you put a couple hundred toward your principal every month. I probably pay less in rent than you pay in interest AFTER your tax deduction...for just as nice of a place.

I love the show "Arrested Development." The model home they live in perfectly represents the quality of today's new construction and the incarcerated father perfectly represents the builders.

To: Get Real | 4:44 p.m. April 17, 2008

The media is as bogus now as it was when it contributed to the hype a few years ago, telling everyone there was no end in sight for home prices and that we'd all be homeless if we didn't hurry and get into a home at whatever cost.

Also? Uh, I'm not poor. How do you know all the naysayers' net worth doesn't quadruple your own? You don't. Most people who still rave that real estate is such a great invesment are very likely invested in it themselves and are interested in keeping the hype going for their own benefit. Yes, real estate can be a very good investment because it's an instrument that you can also live in an over long periods of time it does increase about a percentage over inflation.

People on here saying these things don't need to shut up just because YOU don't personally benefit from their thoughts. People who haven't been buying lately DO have control over their lives. They are paying attention and they're doing what is most financially prudent for THEM which is not to buy in or right after a boom. Sounds like control to me.

Anonymous | 4:45 p.m. April 17, 2008

Get real is no doubt a realtor.

Any time is always the best time to buy real estate. :>

Get Yourself a Boat | 4:47 p.m. April 17, 2008

I have been watching this train wreck coming in Utah for quite some time. It was like watching a friend destroy themselves with drug addiction. If I said anything the debt/status addicts would get mad.

They said that I was a goom and doomer, pessimistic, and that if the media would shut up, that things would be fine.

I am not hearing many deniers anymore. For those who want continue their trip down the River De Nile, shortly there will be good deals on boats that strapped HomeMoaners can't afford anymore.

Anonymous | 4:47 p.m. April 17, 2008

Do you want some humor. My taxes on my house went up over 100% in the last two years. I have a home built in the 1950's and it remained stable for 10 years without moving and then presto, 100% in two years. Well, this is great because now that home prices are dropping I am soooo sure that I will be seeing my taxes go down.

Heres the problem. Person buys a home and get's the biggest one they can afford. Run the numbers and everything works out. Person feels like everything is okay.

Did not see gas prices rising 100%
Did not see taxes Rising
Did not see groceries skyrocket

Problem. everything you buy is usually transported by train, plain, or truck. They all use fuel. Want to know whats really scary. Wait until diesel hits 4.50 or 5.00.

4:47 forgot one thing: | 5:19 p.m. April 17, 2008

Did not see ARM reset coming

Or so they say. Remember they were tricked. They get the most home they can possibly squeeze into their cashflow math table. I'm sorry but it's so irritating to hear them whine for the teaser-freezer. Basically they are asking for their 3% interest rate to belong to them forever as a reward for being subprime.

Don't property taxes go to fund public schools? How come we didn't see the school funding go up 100% like your taxes did??? Surely when property taxes go down, funding for schools will too.

people , people | 5:26 p.m. April 17, 2008

you should have done what i did...i took a look at how the candy bars are getting smaller...it corresponds directly to how much buck your money can buy, house wise. now if the candy bar gets smaller so will the house one can afford. But I see there are alot of you out there who prefer suckers.Which also corresponds to those who basically just rented their house pretending to buy it.

Anonymous | 5:48 p.m. April 17, 2008

The downturn has been coming for some time.
The Great Depression took several decades to get into full swing.

What people forget is how many millionaires were made during that time.

Talk about the worker bees and the beekeepers.

The fact is the unholy alliance between the corporate and governmental behemoths don't give a (blank) about you and me and are getting richer by the moment in a situation that they manipulated.

It's all about buying power.

How much buying power do YOU have?

Re: Holding out too! | 6:30 p.m. April 17, 2008

It sounds like you have a second income that you and your husband are not willing to commit to a mortgage payment. In my opinion...OUTSTANDING money management and well stated post! Good luck with your house hunting when the time is right -- be patient!

Batten Down the Hatches | 6:41 p.m. April 17, 2008

I have been watching Utah real estate for over four years. About when I was going to buy, the bubble came to Utah.

The MLS used to have around 9 or 10,000 listings. Now, it's close to 22,000 and that doesn't even include all the FSBOs. Craigslist is full of anxious sellers.

This is going to get a lot worse. The economy is worsening and housing and the rest of the economy are feeding off each other in a downward spiral.

Johnson | 6:52 p.m. April 17, 2008

People, beware: This housing crises is going to throw Utah into the toughest economic test since the 1920's. Why, because the market decline has absolutely no fix. Interest rates cannot get any lower, many jobs are going to be lost (especially service industry), business owners will have absolutely no money to borrow to bridge business cycles...it's going to be horrendous! This is no joke. If it wasn't for the LDS church's $1.5 to $2.0 billion development, SLC would be at a stage two recession.

Deseret roots in Wisconsin | 6:59 p.m. April 17, 2008

Maybe after a 25% - 30% value decline property values will be in line with salaries in Utah. Too many Californians moved in and paid way too much for their mini mansions. If not for such a price correction the only place a person could almost afford to live would be in the Midwest ... and that aint too pretty folks.

Remember the Name | 7:33 p.m. April 17, 2008

Bush, as another Bush took a whole bunch of Utahns down the wrong path with the saving and loans scandal. He walked off scot free, but alot of old people right here in this state lost their whole retirements in one day! Think before you leap!

Don't blame me | 7:45 p.m. April 17, 2008

I didn't vote for any Republican.
Never will.

Caveat Emptor | 7:53 p.m. April 17, 2008

Congratulations to all the folks who read this article, and offered their opinion(s). This subject is deadly serious, and warns us of some significant challenges ahead. I am fortunate to have "sat out" this market, and rented, while prices were well out of proportion to an equivalent rental property. My prior experience here in Utah (1981-1989) led me to believe that, on average, many folks had a tendency to overextend themselves, financially. Upon my return in 2005 the behavior seems to have become the "norm", and well here we are......Utah is not different from the rest of the U.S., just slow to catch on.........

Dear Holding Out... | 9:11 p.m. April 17, 2008

We have been renting for some time in Murray, but our GREEDY Land Lord has just Hiked up our rent $130! I can see $25 every 6 months, but $130? We have lived here for 4 years, mow their grass and snow blow their walk to be Kind if you can believe that and they hiked our rent $130. I asked why and she said, "Tax Hikes" and "Insurance" and other costs, I think it is called "Lining Your Pockets!" We have found a couple of homes under $155,000. I had hoped to hold out, but I am thinking a few things, although if we held out we would be "throwing our Money away" in rent, instead of building equity. We are not "Starter House" people either, we want a home to grow into, and grow out of past retirement for the family, like they did in the OLD'n Days, when people had brains and used them! We have 1 adorable little girl, one on the way and hoping to polish our family off with 2 more and we make about $50,000 total per year. Live Frugal, Be Happy, Multiply and have Joy In Your Posterity!

Buyers Market | 10:08 p.m. April 17, 2008

What we need to understand is that this is a buyers market. The list prices on the homes for sale are a list price not a sales price. Far too often, buyers are offering only 5K or so lower than list price and think they are getting a deal. No! Unless you are offering at least 10% less than list price, you are not helping yourself, or the market correction that needs to take place. Also note to sellers: You need to humble yourselves and realize that your home is not worth as much as your Realtor says it is. Not selling fast? Then lower your Price! This is the main principle of Economics!

Don't Suck Up the $130 | 11:51 p.m. April 17, 2008

TO: The renter in Murray that got a $130 rent increase,

Are you under any kind of contract? It's a pain to move but you should tell your landlord that you will be moving. Instead of an extra $130 they will be looking at a big hassle, turover costs, and maybe several months of NO RENT.

I mean the turnover of the property will cost them a lot. Use good judgement since I don't know all the factors here. They are taking you for granted.

If they blink, then do a lease at a compromise rate. and lock it in at a fixed price for a year or more.

Or just move. These "landlords" really irritate me.

Former Property Manager

Realtors being attacked, sad... | 12:10 a.m. April 18, 2008

I hate to rain on everyone's parade, but without Realtors the housing economy would fall apart. There are many bad realtors but there are also many bad mechanics, insurance salesman, teachers, custodians, etc. Every field of work has it's corrupt people and it's completely honest people. It makes me sick when everyone titles Realtors as blood sucking liars. Being a realtor is my career and hearing ignorant people label me with the rest makes me feel like my honesty and integrity don't matter one bit.

Gus | 12:27 a.m. April 18, 2008

I am a home builder and built about 15 homes/year for the last 10 years. This year, I've only sold 1 so far for a tiny profit of $5,000. I could see this bust coming and prepared for it, though, and don't have any other construction loans right now. But I have friends who build and they have 5-10 construction loans out right now. To put it kindly, they are getting eaten alive with interest payments. Many are paying $20,000/month just in interest. Say what you will about the general Utah economy, but for me and my kind, we are in a recession. Housing is in a recession, no doubt about it.

rosemarie | 12:25 a.m. April 18, 2008

I would like to know exactly where he got this informaation--there are alot more than 25 houses in my area and none of them are going into foreclosure

Too bad things are not checked for accuracy before they are published

You Must Be Kidding | 12:39 a.m. April 18, 2008

"without Realtors the housing economy would fall apart"

You absolutely MUST BE KIDDING. Get rid of the laws that protect realtors turf and control the MLS.
Then we can talk about how necessary realtors are.

That's great that you are "honest". You are also in a profession that needs major restructuring but that has a strangle hold on legislators in order to prevent that change and protect your profession's profits.

No One Brags About Foreclosure | 1:22 a.m. April 18, 2008

rosemarie,

Have you gone and asked each of your 25 neighbors if they are in foreclosure? No sign goes on the lawn for foreclosure, so how would you know?

Re: Real Wealth | 6:06 a.m. April 18, 2008

Yes my family and I have also 5 times our money on wheat, and next it will be rice. I have been working diligently for 5 years on my storage trying to store up needs for my family. I know my family will appreciate something to eat in hard times. I have also heard that Cash and novilty toys don't cook or taste very well when cooked up!

Re: Re: Real Wealth | 7:29 a.m. April 18, 2008

It reminds me of the grasshopper and the ant story. I think people just think they will never use their storage, the Church has begged, even commanded us to have it. We are taught that the first law of heaven is obedience, I am afraid we are not measuring up. When you talk about food storage it reminds me of the 10 virgins, how 5 were foolish and 5 were wise. I also picture the 5 foolish running around begging to borrow oil. When Noah
closed up the ship, he did not open it back up to
let the unprepared in. I think we need to get back to basics and not spend out of our means because we
want to look successful to others. I think going over your head and spending money is an addiction, and a plague and we should run from it. We are setting our children up for expectations in life that are unreasonable unless they carry alot of debt. It's time for us to change and be better stewards over our money that we are responsible for.
I think we can learn alot from our Depression Era parents, that ran from big houses.

Hard Numbers | 8:06 a.m. April 18, 2008

Utah's prices are a little high compared to incomes, but not outrageously high. According to the Census Bureau, Utah's median household income is $55K and according to the NAR home price index, Utah's median home price is $229K. So at current 30 year fixed interest rates around 6% and a 10% down payment, the monthly payment (including principal, interest, mortgage interest, insurance, and taxes) is about 32% of income. Or an FHA loan with 3% down, about 34% of income....slightly above recommended levels of no more than 30% of income, but not so bad that home prices will drop 50%.

Of course, doom and gloom reports can be a self-fulfilling prophecy leading to actual doom and gloom. But this will simply create opportunities for those who are prepared to act.

(and no, I'm not a realtor, just someone who can actually do math unlike most reporters and likes to analyze and question media reports that make wild claims)

Wisconsin Conservative | 8:28 a.m. April 18, 2008

"Homeownership is the primary vehicle through which American families build financial security."

No, living below your means is. This is no one's fault but the people who took out loans that they couldn't afford. I am SO mad that the government is getting involved. I am sick of the entitlement mentality that is ruining this country. And no I don't want to pay for every one's health care either.

Greg w | 8:29 a.m. April 18, 2008

Simple financial advice: if you can't afford it, don't buy it. Plus, your home is not an ATM.

It's not rocket science!

Wassup | 8:44 a.m. April 18, 2008

Gus, what were the builders doing with their profits during the past 3 years (and those profits were huge on a house). Now they complain they are in financial trouble?

Did they really believe this fantasy would continue indefinitely?

Sounds like bad business practices by builders! No bailout!

hOPEFUL | 8:51 a.m. April 18, 2008

I WOULD LIKE TO SEE THE FOLLOWING:HOUSE COSTS DROP,
GAS PRICES DROP AND HEALTHCARE COST DROP.
I WOULD ALSO LIKE TO SEE SALARIES GO UP!

GUESS I LIVE IN DREAMLAND-LOL.

HAVE A GREAT DAY EVERYONE-HOPE THINGS WORK OUT FOR ALL OF US AND FOR THE FUTURE!

Mahonri | 9:08 a.m. April 18, 2008

Absolutely NO SYMPATHY for these people too stupid to understand what they are signing. They buy the big mansion homes knowing they can't pay for them and now expect the government and neighbors to pay for their stupidity. I have a refrigerator box I will SELL to them as I point them to a freeway underpass to live under.
Stop buying ice cream and pay your bills. They are deadbeats and welfare types and expect the rest of us to take care of them. Let them lose their homes.

Gus | 9:47 a.m. April 18, 2008

Lots of builders were putting their profits into more land and probably buying themselves a big nice home too. But, I'm not asking for a bailout at all. Actually, the opposite. I'd like government to keep their hands off. I'd like them to stop lowering rates because the banks are just sitting on that cheap money. Stop bailing out the big brokerages because they should take responsibility for their actions. Stop creating special lending institutions. I firmly believe that letting this thing correct on it's the best option for our economy and for Americans. Yes, some will lose their homes, but whoever said that homeownership is risk free. Let them rent for a while and regain their financial footing. Then re-enter the market at market prices.

Aless Fergusson | 9:56 a.m. April 18, 2008

My sister tried a short sale of her property through HOMEQ and it is horrible how the people in that place do not take that work seriously.

Every one of them ask for the documents she already submitted, a new person on the phone ask her for the same papers, and not one of them seems to take responsability of what they represent.

HOMEQ is the worst, it is a headless institution. My sister has a buyer for her home, but HOMEQ rather sent her a notice of foreclosure, without taking into consideration all the paper work submitted!

Our economy is into DEPRESION and the government does not seems to realize that. People losing their homes by the hundreds is an indicator. What to do?
just PRAY!

Re: Mahonri | 10:03 a.m. April 18, 2008

Cheers to YOU! you hit it right on!

NO Sympathy,you signed the dotted line-now pay for it. People need to live within their means and stop waiting for neighbors to bail them out. They should be embarrassed for their stupidity. I like the bumper sticker that says~"Don't think my car is good enough-well my house is paid off"

Re:Buyers Market | 11:34 a.m. April 18, 2008

Amen to the earlier comment on the buyers market. Sellers need to humble themselves and realize that the market wouldn't be so slow if they would actually lower their prices. And no, I'm not talking 5 or 6k reductions. I mean lowering your prices to what your home is really worth in today's market. If it's not selling, then you are overpriced. The Market will speed up if Sellers learn humility.

to re buyers market | 12:02 p.m. April 18, 2008

Wouldn't the reverse be true as well? Why don't you just pony up the cash that the seller is asking and the market will speed up because you will be buying.

Maybe you need to eat some humble pie and quit whining about the prices and pay up....

I do believe the knife cuts both ways....

and no, my house is not on the market..

Hey "to re buyers market" | 1:44 p.m. April 18, 2008

I like your attitude. I've got some things I would like to sell you.

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