Why haven't home prices come down? (Salt Lake City: for sale, foreclosures, home equity loan)

[carlymac]

From what I can see, there is still a glut of homes on the market. I've been keeping my eye on some homes on a few websites. They've been for sale for 6 months or more but the price hasn't budged. What gives? Are prices going to come down or are Utahns going to remain stubborn? What's the forecast?

[gemini_chick]

Originally Posted by carlymac

From what I can see, there is still a glut of homes on the market. I've been keeping my eye on some homes on a few websites. They've been for sale for 6 months or more but the price hasn't budged. What gives? Are prices going to come down or are Utahns going to remain stubborn? What's the forecast?

Forbes.com came out with the top 10 recession proof cities, with Salt Lake being #6. Although homes are taking longer to sell, and foreclosures are plenty, the housing market is still strong here. Prices have come down, however, but just not at the same levels as the rest of the nation.
In Depth: America's Recession-Proof Cities - Forbes.com

[kwm03160]

A lot of homeowners are "tapped out" with home equity loans, etc. and cannot lower the price.

[carlymac]

So how would it sit with sellers to get an offer 10-20% lower than their asking price? Is this what they are expecting? Or are they really hoping to get full price offers?

[BuhByeCalifornia]

Originally Posted by carlymac

So how would it sit with sellers to get an offer 10-20% lower than their asking price? Is this what they are expecting? Or are they really hoping to get full price offers?

I think it just depends on the seller and how desperate they are to sell. If there's a house that you are interested in buying, go ahead and make a low-ball offer knowing that you may have to come up a little and they'll come down a little. Hopefully, you'll meet somewhere in the middle. I would NEVER make a full-price initial offer. I think most sellers don't want to lower their asking price because they expect to get a much lower offer - that's when the negotiations come in.

So many of our Southern California friends come out here and are in *STICKER SHOCK* at how much CHEAPER Utah housing is compared to California. A couple who just moved here from San Jose, CA was ready to make an full-price offer on a Traverse Mountain home but we convinced them to wait. While they didn't want to "let a good deal" pass them by, they took our advice. Lo and behold, the realtor calls them a week later dropping the price even more. Of course there were at least 100 homes that were similar and in the same price range ($400K)

However, in a neighborhood that's filled with extremely high-end, custom homes, it could go the other way. I know this one lady who sold her hyOOge custom home for $5 million dollars THE FIRST DAY it hit the market.

I've heard of at least 2 other people who would have bid on that home had they had the opportunity.

[SLCPUNK]

Originally Posted by carlymac

From what I can see, there is still a glut of homes on the market. I've been keeping my eye on some homes on a few websites. They've been for sale for 6 months or more but the price hasn't budged. What gives? Are prices going to come down or are Utahns going to remain stubborn? What's the forecast?

I've watched 'em be stubborn all over, but eventually they come down. Shortsales, foreclosures, new homes, and now tighter lending standards will do that in time. Just be patient. Salt Lake City was one of the last to "boom" and they will be one of the last to deflate. SLCs glut of homes mirror plenty of other markets a year or so back. Owners in those markets also thought their city had something different, now most realize the homes were overvalued. People called bottoms in those cities too...

It's all about fundamentals: Median household income has to go up, or prices have to come down, guess which one it will be? And frankly I'm tired of hearing about SLC having a strong job market which somehow makes them immune to price reduction. Every city claimed to have something that made them protected from negative equity over the last few years.

[Charise-rltr]

Hello All,

We are not seeing prices come down in this market because there was no bubble created. The values are not inflated so a correction is not coming. There was a surplus of inventory that is being absorbed as we speak. Job growth is positive And, we had over 85,000 people move to the area in 2007.
The market we have in this area today very much resembles what our typical market looks like. It's showing signs of improvment in the first quarter and is expected to continue to improve.

[carlymac]

That's not what the news reports are saying. (see below) I think the biggest sign of some kind of fraud or at the very least, over-optimism on the part of sellers is that salaries in Utah don't come anywhere near justifying these kinds of prices. And it's not just a little surplus. A year or two ago at this same time there were around 4000 homes for sale in Salt Lake County on a certain website (I guess I can't name it) and now there are almost 8000. I've been watching the market for 6 years in hopes of moving back to Salt Lake.

These quotes are from May 2008 "Trendline" on Utah's government page.

"Utah's foreclosure rate jumped dramatically in March—93.4 percent—from the same period a year ago, according to a monthly report released by market research firm RealtyTrac. The March 2008 U.S. Foreclosure Market Report indicated that Utah ranked 22nd in the rate of foreclosures, with one in every 733 households. http://deseretnews.com/article/content/mobile/0,5223,695270431,00.html "


"Plummeting home sales along the Wasatch Front are finally starting to take their toll on selling prices. Sales of existing single-family homes in Salt Lake County fell by 42.2 percent in the first quarter, compared with the same period last year, a new report by the Salt Lake Board of Realtors shows. Median selling prices were virtually unchanged over that period, rising less than 1 percent, to $242,000. Just a year earlier, the increase was more than 20 percent from the previous year. http://www.sltrib.com/business/ci_9033973 "

Where is your info coming from?

[DP525]

Carlymac, wanna make me an offer???? I am not stubborn.

[Luke9686]

They'll come down. I can guarantee it.