Utah Real Estate ... bubble or not? (Draper: best cities, real estate market, foreclosures)

[FMCoug]

I am interviewieng for a job that would require a relocation to Utah. With what is going on with the housing market nationwide and the fact that Utah has started to slow down but not totally crashed like other areas, the thought of buying a house there right now concerns me greatly.

So if I choose to do this, I'm considering leasing or lease optioning something for a year to see what hapens.

Any thoughts from locals, especially those involved in RE market there?

[jennabugs]

We chose to buy this past fall. We plan to be here for about 3.5 - 4 years (my husband is military). Yeah, it's a risk, but it seemed like more of a risk to rent and throw money away when we could afford to buy here. We bought in Davis County.

I don't have advice, just sharing our thought process. I think it HAS TO get better within a few years.

Are you planning to stay here if all goes well?

[EdLo]

Okay, so you have all heard the pessimistic litany, pedaled by the media, about how the economy sucks and the housing market is in the dumps. Here are some hard facts, just so you don't get too depressed.
1. Utah has demand for homes. In '07 record population growth occurred (85,000) and the same is forecast for '08 and beyond.
2. Utahns are employed. About 52,000 new jobs were created in '07, and wages increased between 5 and 10 percent. Unemployment is about one-half the national average.
3. Affordable loans are available. Rates are still at historic lows. Conventional loans are readily available for qualified borrowers.
4. The market is healthy. Appreciations in Utah outperforms any state in the country; up 12.9% over the past year compared with 1.8 nationally.
5. Foreclosures and flippers. The "huge" increase in foreclosures consists mainly of flippers whose investments didn't pan out.
6. Gen Y will buy! There is pent-up demand from first-time buyers in this age group.
7. Real Estate still the best shelter. Between '95 and '04 the average renter accumulated $4,000 in wealth; the average homeowner, $184,400!
Want more facts? Email me. I'm not a realtor btw.
Eddie

[SouthernBelleInUtah]

Considering the higher-than-national-average birth rate here, houses will always sell as there is a constantly expanding pool of buyers.

[riley1999]

Take a look at this article from Forbes. Assessment on housing market and economy - SLC is mentioned and is positive.

Best Cities For Bargain House-Hunters - Forbes.com

[coolcats]

Didn’t you just build a big house in Texas? As for a bubble, I don’t think it would hurt to rent for a year. I don’t think prices will be going up drastically. If you are staying for the long-term, it might be a good time however to snatch up a high-end foreclosure in Draper. I hear there are a lot of them. I’m tempted to bargain hunt, but I don’t want to mess with a mortgage etc. Plus I like my 10-minute commute and my daughter, who is now 6, really doesn’t want to leave her friends. So I think we’ll stay put. But I think bargains will start showing up.

[rknight29]

Originally Posted by coolcats

Didn’t you just build a big house in Texas? As for a bubble, I don’t think it would hurt to rent for a year. I don’t think prices will be going up drastically. If you are staying for the long-term, it might be a good time however to snatch up a high-end foreclosure in Draper. I hear there are a lot of them. I’m tempted to bargain hunt, but I don’t want to mess with a mortgage etc. Plus I like my 10-minute commute and my daughter, who is now 6, really doesn’t want to leave her friends. So I think we’ll stay put. But I think bargains will start showing up.

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.

Where is your 10 minute commute to/from?

[NewToSLC]

Just to balance the argument.

Originally Posted by EdLo

1. Utah has demand for homes. In '07 record population growth occurred (85,000) and the same is forecast for '08 and beyond.

Didn't Utah build record number of homes in those years too?

Originally Posted by EdLo

2. Utahns are employed. About 52,000 new jobs were created in '07, and wages increased between 5 and 10 percent. Unemployment is about one-half the national average.

The employment trend is reversing though. It's starting to nudge upwards.

Originally Posted by EdLo

3. Affordable loans are available. Rates are still at historic lows. Conventional loans are readily available for qualified borrowers.

Yes, loans are at a historic low (relatively) but loans are much less easy to come by these days.

Originally Posted by EdLo

4. The market is healthy. Appreciations in Utah outperforms any state in the country; up 12.9% over the past year compared with 1.8 nationally.

Past performance is no guide to future performance. e.g. Bear Stearns was recording bumper profits last year. If investors had followed your mantra, they'd be wiped out now.

Originally Posted by EdLo

5. Foreclosures and flippers. The "huge" increase in foreclosures consists mainly of flippers whose investments didn't pan out.

Tell that to the working class in America's Rustbelt.

Originally Posted by EdLo

6. Gen Y will buy! There is pent-up demand from first-time buyers in this age group.

Generation Y is tapped out. Young people today have record amount of debt. The capacity for them to borrow huge sums is erroded.

Originally Posted by EdLo

7. Real Estate still the best shelter. Between '95 and '04 the average renter accumulated $4,000 in wealth; the average homeowner, $184,400!

You're picking the boom period between two recessions to get that figure. Try talking to people who bought in Florida and California between '05 and now to see how much wealth they created.

I still think there is some value in the lower-end of the real estate market in Utah. You can pick some great places up in downtown Salt Lake for $100k-$150k right now.

[coolcats]

Originally Posted by rknight29

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.

Where is your 10 minute commute to/from?

That's ok. I use the same one on both. My 10 minute commute is from the northern part of Western Salt Lake County to the central part of Western Salt Lake Valley

[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.

Originally Posted by riley1999

Take a look at this article from Forbes. Assessment on housing market and economy - SLC is mentioned and is positive.

Best Cities For Bargain House-Hunters - Forbes.com

"Positive"