Utah Real Estate ... bubble or not? (mortgage, loans, house)

[rknight29]

Originally Posted by SLCPUNK

I'd bet a nice steak dinner that home prices will be lower by at least 10-20% within 3-5 yrs in the valley.

This is what I'm thinking. When you have brand new neighborhoods like Traverse Mountain, Suncrest, tons of stuff in Herriman, etc. where most of the brand new houses are sitting empty ... it does not look good.

[Aerorick]

I'd rent for six months to both get a feel of the housing situation and get used to Utah in general. Home prices are going to continue to fall everywhere in the country including here. The whole reason they kept rising is because mortgage lenders were handing out money as fast as they could to borrowers who didn't even have to prove their income. If a house cost $300,000 no big deal. Just get an adjustable or interest only loan. Then when you refinance a year of two later you max out on what equity you have and buy a car, boat, Harley, RV, spa or some other essential item. But in the past few years it caught up. Banks now require loan requirements the old fashion way. A good credit score and 10-20% down. And guess what? There just aren't as many people qualified to do that anymore. So instead of ten buyers for every home there's ten homes for every buyer.
So if your credit is 700 or better and you have $20-$30,000 in cash laying around and can prove you can make the payments after all your other expenses are met your in the catbirds seat. Utah is no differant than anywhere else. And I don't think we've seen anything yet.

[EdLo]

[quote=rknight29;3490956]I knew I should have used another handle on this board! I read somewhere that Utah County real estate has appreciated 70% in between 2005 and 2008. With the housing stuff going on nationally ... that sure sounds bubble-ish to me.

I bought in 2005. Appreciation was 56% in 2006 and 17% in 2007. That's close to the figure you quote. And yes, I bought in Utah County.
Eddie

[SouthernBelleInUtah]

The TV news tonight had a feature on the number of subprime loans in UT. 24% of the loans that originated in 2005-2006 were subprime. That is going to affect a lot of folks when those loans re-set in the new year or so.

[Aerorick]

Belle, On that note I saw on the news last night that Utah leads the nation in forclosers. You'd think that was odd when Utah's employment numbers are so high. I'm going to have to do the math on the state's stats. I wonder if they count the number of people working or count the number of jobs being filled. Because in a state where working two or even three jobs is nessesary to make ends meet is not uncommon, those numbers could sure get skewed to make it look like utopia.

[coolcats]

Originally Posted by Aerorick

Belle, On that note I saw on the news last night that Utah leads the nation in forclosers. You'd think that was odd when Utah's employment numbers are so high. I'm going to have to do the math on the state's stats. I wonder if they count the number of people working or count the number of jobs being filled. Because in a state where working two or even three jobs is nessesary to make ends meet is not uncommon, those numbers could sure get skewed to make it look like utopia.

I'm not sure where you saw Utah leads in home foreclosures. It's bad, as it is everywhere, but nowhere close to some other states:

From the Deseret News:

"The outlook is grim in several other states, as well, including Nevada, where one in 11 homeowners are projected to be in foreclosure in the next two years, and Arizona, where one in 18 homeowners may face the same circumstance. Rounding out the five states with the highest projected foreclosure rates were California at one in 20, and Utah, which tied with Colorado at one in 25, or a 4 percent rate of foreclosure."

Deseret News | Foreclosure future grim for Utahns

[Aerorick]

KSL 9:00 news last night.

[Aerorick]

I stand corrected. Utah is indeed only in the top five states for forclosures. I will submit however that one of the "toy" industries that had benefited from all the "free" refinance money over the past ten years, Harley Davidson, reported a sales drop of 13% and is laying off 1,300 people. To anyone thinking of buying in Utah I'd suggest renting for a few months because this is not over by a long shot.

[coolcats]

Originally Posted by Aerorick

I stand corrected. Utah is indeed only in the top five states for forclosures. I will submit however that one of the "toy" industries that had benefited from all the "free" refinance money over the past ten years, Harley Davidson, reported a sales drop of 13% and is laying off 1,300 people. To anyone thinking of buying in Utah I'd suggest renting for a few months because this is not over by a long shot.

I'm not sure Utah is even in the top five. The article only dealt with states in the West, of which Utah was one of the lower states. I don't have time to look up the national stats, but if anyone else does that would be great.

[Maltose]

Originally Posted by Aerorick

Belle, On that note I saw on the news last night that Utah leads the nation in forclosers. You'd think that was odd when Utah's employment numbers are so high. I'm going to have to do the math on the state's stats.

Until home prices approach 2-3X the median income for your area, housing will continue to be unaffordable and foreclosures will continue. It is difficult to afford a 300K to 400K house on an income of 80K and have something left for food, insurance, auto, kids, savings, retirement, etc.