What's happening in the Utah Housing market?
One of the perks of being a Broker in Utah (and there aren't many!) is the opportunity to attend the UAR's annual Broker Town Hall meeting. Yesterday was such a day.
We had the opportunity to hear from our own Governor Gary Herbert (UAR Past-President!) on the general economic outlook for Utah. As usual, it's sunnier here than in many places in the Country. Jobs are up. Unemployment is down to 5.8%. It was at 8% when he took office. Companies are still looking to locate or re-locate to Utah, because of the 'business-friendly' atmosphere that exists here. Nothing like a well educated work force, and high quality of life to make a place look good for your business.
We also heard from Kirk Jowers, Director of the HInkley Institute of Politics at the University of Utah. He handicapped the Presidential race for us. I think he wanted to say Romney was a lock, as he knew his audience. However, he was realistic about that, saying it would be a tough road. He also talked about most State races here being a snooze, a competition to see which Republican candidate would get the most State-wide votes. I'm betting on Governor Herbert. However, he did suggest that the Congressional District 4 race would likely come down to the wire between Incumbent Jim Matheson and Saratoga Springs Mayor Mia Love. He thinks it'll be a 3-4 point race.
Finally, our own UAR Communications Director Deanna Devey presented an 'Economic Snapshot' prepared by Jim Woods, Director of the Bureau of Economic and Business Research at the University of Utah. There was some great info on what's happening in the housing market in Utah. He reports that we've seen an increase in sales statewide for fifteen straight months, for an increase of 8.6% in sales over the past year, with the biggest improvements being seen in Salt Lake, Davis and Weber Counties.
He also suggests that it's a very favorable time to by for credit worthy borrowers. At the peak of the boom, rates were around 6.4%, the median price of a home was roughly 216K, making for a monthly payment of around $1340. Now, the median price is about $180k, rates are around 3.8% for a payment of $836, some 40% lower than during the boom. See, I told you it was a great time to buy! He suggests that if rates stay in this range, and our employment situation stays strong, there should e enough momentum to offset slowing demand generated by tougher than usual lending standards.
While Mr. Wood gives lots of good news, he does suggest a couple of factors that could creat challenges to the market. The first is the number of 'underwater' homeowners, and the second is the slowing of in-migration. We currently have roughly 480k mortgage loans with some 125k of them either in negative or nearly negative territory. This obviously can have a bad effect on the 'move up' market, as these folks are likely trapped in their homes for the near future.
Finally, regarding foreclosures, they peaked in Utah in first quarter 2010, with nearly 15k homes in the process. However, this problem seems to be slowing significantly. Since 2008, there have been 9689 active REO listings, through August of this year, almost 90% of those have been sold. Currently, REO's and Foreclosures represent only 2% of total listings along the Wasatch Front.
In addition, in the second quarter of 2012, the Mortgage Bankers Association reported that the percentage of loans in the foreclosure process had dropped to 2.2% or a drop of 37% since first quarter 2010. That's still a big number, but not crazy big.
The conclusion that Mr. Wood draws is simple. Record home affordability thanks to low rates and reduced prices, increased demand stopping price declines along with reduction in pressure from foreclosures make this a unique opportunity for the homebuyer. While he suggests that full recovery in prices is a few years off (we're around 2005 levels), I can't imagine a better time to be doing what we're doing. Contrary to popular belief, not only is a it a great time to buy, but it's a great time to be a Realtor!
Blog Archive2019-04-20 07:13:45
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