Comments about ‘Utah's housing market: Good time for buyers, but for how long?’

I think this is about the calm before another sub-prime storm. The loans had five year balloon payments, so we should see more repossessions enter the market until late 2012.

Amen Conejo.

I thought I was reading the latest novel.

Here is one of the problems. People in places like Tooele and Eagle Mountain think their homes should be worth as much as those in SLC or even Orem. Some realtor talked you into buying in these "great locations". Now that gas is once again close to $3/gallon, people realize that the commute will cost them more than the higher price you pay to be closer to things. Home prices in those places that are far away are going to continue to struggle while the homes closer to the "big" cities will hold steady. What realtors say about location, location, location really is true.

Also, have you EVER heard a realtor say that this wasn't a great time to buy? Nope.

If I ever heard a realtor say, "Don't buy right now. It isn't a good time", they would have a customer for life.

As it is right now, I'll continue to sell my own houses when the time comes.

Greed is ugly and we are seeing the results all over our great country.

Vulture investors jumping into the market right now are hoping they are buying low and can make some easy money. This time they will be very wrong.

Implied forward interest rates show mortgage rates rising to 7% and possibly higher by 2014. The Federal Reserve will need to sell its massive pile of mortgage backed assets to unwind the unprecidented quantitative easing undertaken over the past 18 months. The result will be flat to lower home prices for years to come, driven by much higher mortgage rates. The speculators will be left holding the bag for maintenance, taxes and depreciation. These will NOT be good investments. It reminds me of the 1985 to 1993 period in Utah housing when prices were flat-to-lower for nearly a decade. And this time will be worse. We may be at current (or even lower) price levels for 5 or more years.

Folks who want to make a quick buck in this market should get a real job and create some value. It will be more profitable in the long run.

Until the banks are forced by market pressure or legislation to deal with the rising list of foreclosed and short sale properties they will continue to manipulate the market. As a prospective buyer I have had multiple offers on different properties sit on bank manager’s desks for 6 to 9 months only to have them go no where. If I ran my business this way I would be bankrupt. Banks are also deliberately under listing prices in order to cause biding wars which further cripple the process. Realtors are willing accomplices in this game as well. We recently viewed 10 properties 8 of which had offers but with no corresponding notations on the on-line listings. My time is being wasted by irresponsibility. There may be a change coming soon however that may force banks to operate responsibly. The government money spigot they have been relying on will be over in two weeks. This may also force unscrupulous realtors to operate more cleanly as well. I realize people need to make money and I am all for it. I am not in favor of shadow tactics and half truths. Full transparency should be first priority.

Andrew, don't low-ball the banks and maybe they'd act on your offers.

Sounds to me like you're a bottom feeder trying to make a killing from the current situation.

Your assertion that banks are under listing prices is ludicrous. Many banks have been losing money and some have failed because of losses in real estate. You're saying they are gambling their existence on a bidding war?? incredible!

Still way over priced. Americans spend way to much on housing and thats why most people are in financial trouble. If you take a high mortgage and cut it in half, most people would be doing just fine. Most people in this state just don't make enough to pay for these big houses with high prices. Time to down size and cut down your monthly overhead.

If you have cash in hand,make a low offer,all the bank can do is say NO THANKS,we`ve bought 3 properities in the last 1 1/2 years,at 15 % of the outstanding loan,Go for it!

buying a house no not me..
Best of luck to those Buying a home;Yo must have
Good Credit- and and a Secure steady JOB-
But be careful it does not leave you with nothing at all

Put an expiration date on your offer. Some banks try to sell property like an auction. They sit on offers for a while, and take the best one.

Don't let then control you. If they want to sell as an auction, then it should be listed as one.

First off 7% isn't a hardship. During the 80's mortgage interest hit 18% and they made you put a decent down before buying.

Can we stop thinking we are living in harder times than we actually are?

Writing style of the article off putting.

To K,

No 7% is not a hardship. But it will be a huge headwind to prices going forward. $1,500 per month in P/I will support a $300,000 mortgage at 4.5% but only $225,000 at 7%. That is a 25% reduction in home affordability.

Plan on home prices going nowhere for years...

You forget property tax and PMI. Huge effects on the family budget. But prices are also down. Years ago, not too long ago a 300k house is now worth 220k. Imagine what 18% would do? Of course when mortgage interest was that high banks paid andecent interest rate on money in savings account. A person saving could see money grow.

To K,

I'm not sure what point you are making. I didn't forget property tax or PMI, I simplified the problem to show the impact of interest alone. If home prices can go from $300k to $220k in a falling interest rate market, you can imagine that rising interest rates could pose further problems to an already battered market.

My point was, speculating on housing right now is tempting, but will likely not be a profitable venture. Just a warning to bottom fishers who think there is easy money to be made. This housing recession and the attendant lower home values is likely to be with us for quite some time.

Finally, a helpful article from the DN.

We're thinking about moving to Utah and have been looking at homes in the 300,000 range for a few months. Many started 6 months ago in the 400,000 - 600,000 range (The DN used optimistic examples)

Based (not entirely) on the optimistic estimates (i.e., I think it'll be worse than these folks are estimating) in this article, I think we'll wait another 6 months for the additional 5% - 20% reduction that's coming.

Oh - and soon, the govt. will have to up interest rates - it's one of their few remaining ways to, not solve, but alleviate the massive debt problem. When that happens, home prices will take a further drop. Those $300,000 houses will be $220,000 (at the same payment for the borrower).

The good news is, for those of you still in your homes, the rental market will boom. Convert a part of your basement into an apt. and you might just be able to make your payment.

Cash will be king (gold/silver better).

To AT:

Higher interest rates will make the national debt problem worse, not better. It will mean higher borrowing costs, higher taxes, and more borrowing. They will have to allow inflation to reduce the real value of the debt, which is the primary cause of rising rates. This will weigh on housing prices for years to come. Homes are NOT and investment. They are consumption. Buying too much home will only do what it has always done, impoverish people who will feel good in the short-run but be financial slaves to a mortgage and ultimately be much worse off. So let go of your McMansion dream and buy something smaller that you can afford. You will be much happier.

I am a home owner & real estate investor. I have never bought based on short term appreciation. Success for an investor means buying below market enough to pay all expences & make a profit which can be done. If I were in the market for a personal home right now I would buy because of low interst rates & price. No one knows for sure where prices will go; although, I agree that home prices will remain flat for some time. Interest rates most likely will not. There are plenty of would be buyers but they cant qualify for a loan. Money is tight. and there is a lot of supply right now. I drive a lot of neighborhoods & for sale signs abound. Lastly, when you bottom feed with low ball offers expect to wait and wait & wait for the bank to respond. IMO, more legislation is the last thing anyone needs.

Not a bottom feeder but I am not willing to pay for an over priced property. In my case offers tendered were for bank approved prices. The first offer went no where for 6 months before we withdrew it. The second offer has been pending for three months and the bank managers have stated that they have not even looked on the offer because bids are still coming in. Why behave this way if you aren’t playing a game. For any buyer willing to put down 10% in cash this is frustrating. Why play this speculatory game? Because if the market bounces back in a meaningful way they stand to make money, lots of it. I have no issue with banks making money. As buyers it is not our fault if banks or any seller under price their inventory. Buyers should not be subjected to careless business practices. I challenge anyone to look at the short sale process and be encouraged. Most housing inventory out there are classified as being in short sale status.

We live on one income with 4 little kids. We would love to buy our first home, but with the current prices we can't get a 3 bedroom home in the price range that we can afford and I am not moving to Eagle Mountain or Tooele because we will use more in gas just to go anywhere. I don't need all the upgrades, but I do need a place for my kids to run and play without bothering my neighbors, that apartment living has. 5 years ago my sister bought a 3 bedroom home just as the prices started jumping. Her price then is still $100,000 cheaper then the home price listed in the article. I hope in the next few years as we save up the money for a downpayment that the prices will fall to a level that we can buy.

You save up 20% to out down on a home where your mortgage, and taxes - no PMI since you put 20% down- is not more than 28% of your gross salary.

You don't worry about market lows and highs, just your ability to afford the house you like and will fit your needs best.

If you drive an extra 10miles a day that is only an extra 4 gallons of gas a week. Hardly a great expense and the homes farther away cost less as well. Worth the $50 a month extra in gas at $3 prices.

Interest rates to low are bad. Cheap money was why pension funds and such were in the riskier mortgage business add to that government regulation making loaning to high risk borrowers mandatory so homeownership rates would be in the 60% range instead of the 40% range pre world war 2.

ARE BOTH "Deseret News" reporters and this writer living in the same century?

The State of Utah's property tax assessments remain mired in the 19th Century -- having been falsely wrongfully and erroneously presented to Utah tax- payers by GOP state legislators & two GOP governors.

When property values fall in Utah - the ASSESSMENT RATES INCREASE! NO OTHER STATE to my knowldge does this to its citizens! "What were they thinking?"

THAT antiquated TAX STRUCTURE on personal property does NOT bode well for "a buyers' market", when the realtor lobbyists are given office space INSIDE the State Capitol building by GOP legislators - WHO FIGHT AGAINST[!] a citizens initiative on ethics!