Utah Housing Forecast
We hear all kinds of hullabaloo about the Utah Housing market, from reporters committing loan fraud to someone that has never bought or sold a piece of property BUT listens to NPR.
Let’s hear from some experts
National Economist
“Utah is one bright spot compared to other parts of the country that are in severe pain,” said Lawrence Yun, chief economist for the National Association of REALTORS®. “It’s the shining star so far if one wants to say which market is hot.
” But that’s not to say Utah real estate will be completely free of cloudy conditions in 2008. Despite Utah’s strong economy, housing sales are still expected to slow in 2008 and some markets may face affordability challenges.
“In Utah, you’re going to see home sales at a lower, more sustainable rate, but they aren’t going to falter,” said Jeannine Cataldi, senior economist for economic forecasting firm Global Insight.
She expects activity to pick up once people know the full extent of the mortgage crisis, which is expected to peak in 2008. “Once we know how that plays out, people can make decisions and move forward,” Cataldi said.
The more debatable subject is what will happen with home prices. Some economists expect to see single-digit price growth in 2008 while others expect slight price declines.
Local Economist
Some local economists, however, see a slightly different picture.
Mark Knold, chief economist for the Department of Workforce Services, says he predicts prices will probably come down a little because he thinks, “prices are flirting above what this market can afford even in the face of good wage gains.”
Kelly K. Matthews, Wells Fargo’s executive vice president and senior economist, also says Utah has an affordability problem, which is why he expects prices to be down 6 to7 percent in mid-2008.
“I believe we are so far out of equilibrium, I do not believe we can avoid some reduction in prices.”
At the same time, Jeff Thredgold, economic consultant to Zions Bank and president of Thredgold Economic Associates, sees price activity varying depending on the market segment.
According to Thredgold, lower-end properties in the $175,000 to $300,000 range should increase approximately 7 to 10 percent. Some homes in the $300,000 to $500,000 range should see price gains of about 5 percent while others may see a slight decline. The real concern is the market for $500,000 and above properties; people may have to cut prices, and there may be areas that have to come down 5 to10 percent, he says.
“All real estate is local,” Thredgold said. “In certain communities, it will do well, but in some areas, prices may have to come down.”
I am more in line with Thregold, he clearly understands there is no across the board blanket diagnosis for Real Estate. It is local in nature, you can have zip codes with two different markets with tow different conditions at the same time.
If you would like info on your particular maket contact me.
Above quotes are from the Utah Realtor Magazine
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