Comments about ‘Utah housing market challenges builders, favors buyers’

Very well-written article. I especially liked this paragraph: "But just when it looked like the lunacy would last forever, the repurposed Ponzi scheme went Madoff, leaving Utahns scrambling, as when the music stops in a game of musical chairs. Except that in musical chairs, only one player is left seatless. This time, all the chairs seemed to have disappeared. And the music doesn't appear anywhere close to starting back up."

Economy and housing is far from a recovery, as the article says when the bubble of stimulus stops, so will everything else. Stimulus funds give a false economic indication and the severity of the US financial troubles.

The sad part is that many of these new homes means the builders are making deep cuts in quality of materials and workmanship. Homes will be made in China and assembled in Utah. Not very much of a job booster for housing economy when only assemblers and importers keep a few jobs.

The US needs more than a housing industry to make the economy grow. A single industry of housing nation, doesn't prosper very well and limited to only jobs of erecting them. If it wasn't for government jobs and high taxes, Utah would have no employment at all.

Utah has the lowest paid, poorest, and abused work force and the most socialized state of the nation. When wages are so bad that government has to subsidize incomes with socialism that is double the wages, jobs are in trouble. Free enterprise is working on the backs and burden of tax payers and this is not a good economy.

Very true. It was a nice article. People need to feel secure with their jobs. When this happens more people will buy new homes or build on to their current ones.

There are too many speculators trying to avoid having to work for a living and provide real value to the marketplace. They prefer instead to create little-to-no value, wheel and deal, and hope to make a living. House flipping and multi-level marketing are NOT respectable. Some make it in these "trades", but most do not. And of the ones that do make it as wheeler dealers have to ignore the nagging feeling that they are living off the efforts of others. They also never understand what it means to be truly respected of others. Let's get to work Utah and provide real value. Leave the home flipping and speculating to the "get rich quick" and "get rich the easy way" crowd.

I don't buy this at all. Let me recount my experience over the last few weeks looking at a new house to build. I visited 4 builders (big, well-known names around here). Each one could build a 2200 sq ft house for around 200k-220k. My current house of the same size was bought for 146k years ago. Materials, land, and labor are cheaper right now than they were when it was bought (beginning tip of the housing boom). So why are the builders charging 60k more?

1. It is only twenty years since you could buy any home in Utah for $100.000 or less. More than inflation has been at work. Houses are being built larger and with two bathrooms at least and materials have increased due to increase in demand.

2. It is a good thing for the economy when house prices are low. When we aren't spending half of our income in house payments for thirty years we have something left to spend other than for interest on debt.

3. The housing market became inflated in the last decade particularly and needs to make a sufficient downward adjustment.

4. Home builders are complaining but I don't see them building affordable homes yet. They could make smaller homes. A young couple starting out does not need two thousand square feet and does not need two sinks in the bathroom. One and a half bathrooms are sufficient. When you see townhouses out there they are cheaper but still overpriced. How about small homes for $100,000 and I think something could be done for less for young people, small families and retired individuals and couples. Materials still seem inflated in price.

To unaffiliated_person:

The reason they are still trying to charge so much is because they paid too much for the land that they are building on. Most this land was bought when the bubble was at it's peak. They refuse to take a loss, so they refuse to budge any lower. If a builder wanted to crush the market right now, all they would have to do is start buying individual lots at market price and offering the same homes for $30k-$60k less than the competition.

To unafilliated_person - The raw land costs have not significantly dropped, materials have only slightly come down, and subcontractors prices are silightly reduced. That's why homes cost more than they did a few years ago.

The biggest drop in home prices are the repo ones that the banks slashed to reduce their RO inventory. The losers in all this were the homeowners who lost all their equity to the banks who then sold the homes to recover little more than what the bank was still owed. This has given a false impression that new home costs are drastically down.

I'll buy the land argument...it probably was bought during the peak. I am no where close to underwater on my current home, was pre-qualified, and eager to look, but not a single builder would budge at all on their prices. Their loss I guess.

IMHO = BILL PERRY, Sr. quoted in this article is SPOT ON!

He is quoted: [Paraphrasing] This is an 'artificial stimulus' to a housing market seeking its own way and sea legs.

[SEE ALSO MY POSTED COMMENT on Sunday's article in this series for added views on a highly skewed Utah State property taxation model, not repeated here].

Some of the 'weakest sisters' in realty that I've seen are South in Washington County - at Utah's Dixie!