Keith McCord reporting
Another proposal that President Bush will consider soon is a plan designed to stimulate the real estate industry. Congress is working on a "home buyer tax credit" plan to jump-start housing sales.
It's not finalized yet, but if the president signs off on it, it would give first-time home buyers a tax credit of $7,500. The idea is to reduce the huge inventory of houses that are currently for sale across the nation -- around 4 million at the moment.
This was just one of the topics discussed in Park City today by the chief economist for the National Association of Realtors. Hundreds of real estate agents and ski resort operators from around the Intermountain West came to hear what Lawrence Yun had to say about the health of the real estate industry.
As the chief economist, Yun says although the industry is at a 10-year low in terms of sales with a large inventory, the signs point to improving conditions in the second half of this year and into 2009.
Yun also says, unlike other parts of the country, the Rocky Mountain region will improve first. "People are moving into the region; far more coming in than moving out. That's always positive. That creates additional demand for housing, and anytime there's demand for housing, that makes the market much more healthy," he said.
Yun also says low interest rates, fixing the sub-prime loan mess and a general improvement in the economy will also bring buyers back. Plus, he says there are a lot of people still "sitting on the fence" wondering when to get into the market.
"I don't think that's a good strategy from a buyer's point of view. They have the advantage. The inventories are plentiful. They have more negotiating power," Yun said.
Yun says Utah's home prices have taken a breather in the past year, but he says when the fence-sitters get moving, that will change significantly. "But five years from now, the market will be very healthy locally, and home prices could be 30 to 50 percent higher than what they are now," he said.
One sector of the real estate industry that's still vibrant is resort areas. People with money who want a second home are still buying. The numbers in the greater Park City area confirm that.
"We have been quite different from the rest of the country. Our prices over the first quarter have been very stable compared to the first quarter of 2007," said Tyler Richardson, president of the Park City Board of Realtors.
Every economist has a crystal ball it seems, but many we've spoken to over the months say Utah and our neighboring states are in position to fare much better and recover more quickly than the rest of the country.
Regarding that "home buyer tax credit," Congress tried it back in the 1970s and it did light a fire under the market.
Forbes says Salt Lake is practically recession-proof
The nation may be facing a number of economic challenges, but in cities like Salt Lake things are just fine, says a new article from Forbes magazine. Salt Lake City came in at No. 6 on Forbes’s “10 Recession-Proof Cities” list because the city has one of the lowest unemployment rates in the country (even though the rate has seen a rise) and the state is still creating jobs. Forbes also factored in a report from the U.S. Conference of Mayors that projected that “Salt Lake City would be one of the few large cities in the country not to suffer a decline in gross metropolitan product from the mortgage crisis.”To calculate the cities with the healthiest economies, Forbes analyzed key measures in the country’s 50 largest metros: unemployment and job growth from the Bureau of Labor Statistics for the year ending February 2008, the most recent home price data from the National Association of REALTORS®, and information on gross metropolitan product growth from the U.S. Conference of Mayors. Read the complete Forbes story.
Decline in Utah housing sales slows to 11 percent
Home and condo sales in Utah may have been down nearly 11 percent in the first quarter of 2008 compared to the previous quarter, but new statistics from the Utah Association of REALTORS® indicate the state may begin to see some stabilization in its home sales.
The statewide 10.86 percent quarter-to-quarter drop in home sales is the lowest decrease since the second quarter of last year — before stricter lending standards made it more difficult for buyers to obtain home loans. After the credit crunch, home sales in Utah dropped by nearly 25 percent in the third quarter while fourth quarter 2007 figures showed a quarterly sales decrease of about 33 percent.
Home and condo prices in Utah averaged $272,503 in the first quarter of 2008, down about 2.5 percent from the fourth quarter. Without Park City figures, which tend to inflate the numbers, the average price was $243,409, about flat from the previous quarter.
Although prices were up in a number of areas around the state, some of the best news came out of Washington County where home and condo prices saw respectable quarterly increases of about 4 and 5 percent after falling for much of 2007.
A complete list of quarter-to-quarter statistics is available in the “2008 First Quarter Market Statistics — Quarterly Comparison” chart. Yearly comparisons are also available in the “2008 First Quarter Market Statistics — Year-Over-Year Comparison” chart.
