‘How Long Can The Party Last’ In Utah
The Salt Lake Tribune reports on the race to unaffordability in Utah. “Those with properties in the Sugar House area in Salt Lake City saw median selling prices rise by one-third in the first three months of the year. Selling prices in Hooper in Weber County jumped 40 percent. Think that’s crazy? How about the Alpine area in Utah County, where prices are up an unbelievable 57.2 percent.”
“Just how long can the party last? A lot longer than you might think. Economists and people who make their living in Utah’s residential real estate industry are betting the state’s housing market will be hot for some time.”
“Homeowners such as Shannon Harrison can’t help but thinking how long it all can last. ‘It’s just crazy right now.’ But overvalued? ‘I don’t think so, not yet,’ said Harrison, who has lived in Utah for more than two decades.”
“Mark Knold, senior economist with the Utah Department of Workforce Services, said Utah’s home-price run-up, like the one that occurred in the early to mid-1990s, is driven in great part by the state’s strong employment growth. Many have sold homes in other hot real estate markets. Many people in that situation are not as motivated to haggle over the selling price, which tends to further boost overall appreciation in the area.”
“Although Utah’s economy has all the components needed to sustain a hot real estate market for what could be years, there are some factors that could slow things down. One important factor is mortgage rates. Another potential factor in a slowdown in some other hot real estate markets such as Phoenix and Las Vegas is that prices have risen to a level at which many buyers are priced out of the market.”
“‘Housing prices can only go so far before they are outrunning the ability of local people to afford them,’ Knold said. ‘You just can’t double the price of a house in three years and expect that to continue and be the norm and have people still be able to buy.’”
“Residential real estate investor Murray Dallin Wall, like many investors in the Utah market, scoffs at the idea of the Wasatch Front becoming truly overvalued anytime soon. ‘I think the St. George area is just about the only area that doesn’t have a strong upside potential,’ said Wall, a member of the Utah Creative Real Estate Investors Association, an organization of people who buy real estate as an investment.”
“Still, he said, the strong appreciation of the past year along the Wasatch Front has caused many investors to drift to the outlying areas of the Salt Lake Valley and surrounding counties for the biggest upside potential. Wall said he has begun scouting for investment properties in Weber County, which in recent years has trailed most other areas in appreciation. Housing prices in most Weber County cities also are much lower than most other areas along the Wasatch Front.”
“Jaren Davis is another involved in real estate who thinks Utah homeowners will be rewarded in the coming years. The vice president of Coldwell Banker Utah in Salt Lake City said one key is looking at prices in Utah compared with other states.”
“‘Here in Utah, many people consider Park City and St. George to be ‘overvalued,’ he said. ‘But on a national scale, even Park City and St. George are still affordable. Utah is absolutely poised for a sustained period of appreciation.’”
It seems like the speculators keep running from state to state looking for the next hot spot. Is kansas next? My brother got a place in gillette wyoming and paid close to 200k. I think the bubble has reached alot of places.
Gillette, Wyoming is booming from oil and gas development right now, along with a housing shortage. I can see the run-up in home prices there for the time being. When the energy boom busts, as it always does, look out below at all that surplus housing. Anyone ever been to Gillette? It’s a dusty little town out in the middle of nowhere.
I have driven through there from a trip out of yellowstone to deadwood sd. My brother is working on equipment in an open pit coal mine out there. Housing is getting pricey everywhere I guess. Wyoming is nice but gets real cold out there.Cody wyoming is pretty cool.
This is clearly the final phase of a bubble before the burst.
During the dot com era, the final phase was when investors went from the dot com companies to driving the valuation of the Ciscos through the roof because they thought those were the real secure companies in telco. In RE, the midwest is considered the longer term stable heartland market, unlike the coasts which are in a bubble even via mainstream press.
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yup - Nasdaq bubble popped first. Then S&P 500 peaked and popped sometime later. The most speculative markets typically peak first and highest and fall first and hardest.
Speculative demand has driven up a lot of markets. When this demand dries up things will turn.
I would argue, however, that speculative areas in this bubble are theLaramie, Wyoming, Ft. Junction, Colorado and Bakersfield, CA type places. You all desperately want to believe that Newport Beach, Marin County, SF, Westwood, etc. will crash first. They won’t. They’ll be last because the wealthier people live in those places who are less vulnerable and they will always be “desireable” places to live. We’ll see a good bottom perhaps when Ben has a thread about all the CA equity refugees from the midwest feeling safe to go back to CA and all the comments about how much they want to go back.
I agree with your view but I’m wondering how much of an effect there will be from retirement. When boomers who have all their retirement wealth tied up in their house see the softening begin, will they choose to retire and bail out of the high priced areas leading to accelerated declines in the “desirable” areas and price support in the boonies? Also, all the people who have a home in a bubble area along with a 2nd home in a retirement area will have a much easier time selling the home in the desirable area for a price that will cover their mortgage.
Diemos;…I live in a Court with 11 houses, Silicon Valley…I am the only working stiff…All others are retired…Many do not have much income…The houses are worth between 1-1.3 mil….They are going out of their home 1 way only….FEET FIRST…..
(comment addressed to Dave):
This is why I don’t think it’s wise for developers and speculators to bank on retirees cashing out and moving to East Jesus Nowhere. Many, perhaps most, retirees who live in areas where the winters are not brutal will want to age in place. They think of their houses as *gasp* a place to live, perhaps their children’s inheritance.
A lot of the retirees looked at the Rose Parade on their TV years ago when it was 70F in Pasadena and it was minus 25F wind chill in Iowa City or other parts of N. or S. Dakota or Nebraska. They said,’Maud, pack the pictures and the silverware and dishes. We’re going to sunny California’.
All that matters is that, eventually, the prices in Newport Beach, Marin County, SF, Westwood, etc., will eventually fall as well. They did last time in the early 1990s, and unless “it’s different this time,” they will again sometime this decade.
As for wealthier areas, will the rich have to buy up neighboring vacancies to keep their personal security in order? I mean for the most part, the well off generally tend to own their places in cash so what they’d fear the most is their wannabe yuppy neighbors getting foreclosed on, the upwardly mobile slum landlords then moving in during the crash, and finally renting out the units to the lower middle to middle-middle class thus inviting the riff raff into a once posh region.
“Homeowners such as Shannon Harrison can’t help but thinking how long it all can last. ‘It’s just crazy right now.’ But overvalued? ‘I don’t think so, not yet,’ said Harrison, who has lived in Utah for more than two decades.”
How typical that quote is. On the way up its all good, wonder how quickly these same people will come to terms with depriciation.
I don’t understand how reporters constantly write stories like this without referring to the actual stats that are available. I’m sure Shannon Harrison is a nice lady, but why not compare her perception with the National City stats?
Same thing for the comments of the banker. What has changed that might change the relative value of those communities? I can understand the reporter missing this stuff if they’re inexperienced, but where is the editor?
I’d like to mention another possibility. These supposedly rational, fly-over places that “didn’t participate in the housing bubble” actually did. The difference being that instead of rising massively in price they merely didn’t decline as they would have without a bubble. We’ve heard a lot about asset depreciation and demographic shifts and the effect of low interest rates and loose lending practices. Think about those, all of them apply equally to anyplace in the US. Now we read the last factor, equity locust specufloppers are participating as well. So, my question is; Since it is glaringly obvious that hot market prices are way out of whack what other than price makes fly-over USA any difference? Why does raw price protect from rising monthly costs, asset depreciation, demographic shifts, national credit , loose credit and all the other negatives?
A nuance which is constantly overlooked. If I read one more time how Texas (Dallas, Houston, Austin, etal) are undervalued, I am going to puke. Any house in a decent neighborhood in any of those cities costs 3-4x today what it did 15 years ago. And the suburbs are unbuyable, that is, if you want to sell. Too expensive, shoddily built and land everywhere to keep building.
I agree, interest rates have been low everywhere. no doubt this has had an effect everywhere.
Agreed. I remember a link Ben had last week about a housing boom in Laramie, Wyoming where the population was actually decreasing. What’s up with that besides loose lending?
Amen!
For a year now I have followed markets in the twin cities of Outer Boondocks, Georgia and Alabama, respectively. The cost of building brand new to my specs usually is the same or less than the asking price for used, sometimes very used, houses. The sellers seem not yet to understand that they are overpriced — they just know that virtually nothing is selling and average time on market has at least doubled from a few years ago. When prices crash in more desirable areas that are not too far away, the demand for houses in these boonie cities will drop too unless, as is unlikely, new industry moves in. As Robert noted, HELOCs and cash-out re-fi’s were pretty much as available in these places as anywhere else in the country, and people used them. My personal surmise is that once a few homes at the top of the heap cut prices, cuts will cascade rapidly down through virtually all listings. That is the only difference from markets like seaside California, where rich people can wait far longer before blinking than can these folks.
Actually, the rate of ARMS in places like Seaside is significantly higher than in flyover areas. Once the ARMS start adjusting, I doubt they’ll be able to wait the way a flyover owner with a fixed can.
Excellent point.
This is why this housing bubble will result in a national, if not international, depression. It’s everywhere and has permeate markets which would never have had any housing appreciation on their own. There’s no connection between housing and its respective regional job market in any manner. I think Bakersfield CA is one of the best cases for this point.
My advice to follow renters, with enough of a savings to put in a 20% down payment after a 40% correction, is to not bother. You’ll need that money to survive periods of joblessness in the decade to follow. Cash is king during a deflationary cycle.
i have friends who have been trying to sell a place in kanab since december,it felll out of escrow when the buyers could not sell their prior home(contingency sale) they have since dropped the asking price from 350k to 275k,with no offers…this is a 3/2 on a chunk of land with good landscaping.
Cote;….”demographic shifts” ????
I sure would love to hear from someone other than a realtor from Utah about the profile of the buyers moving into the area….Maybe a mortgage broker like “NN” from Navada to give us some quality info…..I have a suspision that this is “White Flight” and may be for real.
“driven in great part by the state’s strong employment growth”
Growth in what you flaming twit ? How about the wages those jobs pay ? How much is real estate driven and gone within a year leaving a large sucking sound ?
Yesterday I witnessed the most amazing scene yet of this crazy bubble. I was in an older area around portland, OR (not crime ridden, just 70s area homes and buildings which haven’t been kept up). Some builder had apparently bought a single home with probably about half an acre and built no less than about 15 houses on it. It looked so absurd because the older homes on either side were still there with their large yards, then in between is 15 tightly-packed, completely finished houses on a single lot. Utterly incredible. Now the crazy part, these houses were completely finished (no sign of builder left). From the end of the street (I was stopped at a red light) I could see 10 houses, 9 of which had realtor signs. There was one lonely home with a car parked in front. That guy must feel really funny. Most of the signs appeared from the same realtor, so I’m assuming most of these weren’t being flipped but just were never sold. Now the builder has moved on to other developments which won’t be sold. Insanity.
Not insanity, Smart Growth. Insanity doesn’t even come close to the massive negative results of SmUG. The nearest recent comparable public polices were the interstate freeways through traditional urban neighborhoods. At least the roads had the good taste to displace and compensate the poor people whose lives they upended. SmUG leaves the vicitms in place and then sticks them with the bill and the impacts. Portland is second in the nation to only Los angeles in the forcible social remodelling of people’s lives with respect to land use abuses.
Sorry about the SmUG rant. To actually answer some of your questions you need to understand that SmUG only exists because of coercion and subsidy not market forces. The developer got paid with density bonuses, fee waivers, tax reductions, off site concessions and the like. So in cases like Portland the actual building of homes that people want is irrelevant to the profitability of building homes the government wants and irrellevant to the bottom line as a consequence. Thus Ipresent Portland, land where the schools close early so the light rail can stay open late.
“so in cases like Portland the actual building of homes that people want is irrelevant to the profitability of building homes the government wants and irrellevant to the bottom line as a consequence.”
is this a dictatorship? I’m sure you’ll find plenty of support for smart growth in local communities.
I’m not sure whether to call it a theocracy, technocracy, bureaucracy or what. I do know beyond any question that it is not any form of representative democracy or republic. Even in Portland survey after survey shows both expressed and revealed preferences for far lower densities than mandated by Portland’s general plan. Smart Growth is an evil alliance of greedy developers and urban planners with visions of social engineering.
Cote;…I have been developing in the City of Santa Clara, Ca., for 30 years…Born & raised hear 54 years
(ug…)…My community is 1 of the Mission’s that the Padre’s established in California coming North from Mexico…Small community mentality with great weight put on community input and neighborhood concerns regarding new development…For the first 20 years of my development days if you did not have neighborhood support it did not pass, period….The council gave more weight to the neighbor’s concerns that to the rights of the property owner seeking redevelopment…That all changed around 1995 and accelerated after the dot-com bust in 2001….Today, its reversed….The council and planners now reject developments because they are not dense enough…Talk of 50 units per acre is now commonplace….A planning and development philosophy completely turned on its head compared to the historical policy of our city…
“The council and planners now reject developments because they are not dense enough…Talk of 50 units per acre is now commonplace”
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see Ben’s Photo Gallery…….
50 units per acre? Is this multi-family, being introduced into formerly SFR-zoned neighborhoods? If the 50 units had zero space between them (there goes the definition of SFR for my part of the country), they would have a footprint of 871 square feet with no allowance for ingress and egress (exterior doors) except for the outside units. So are these things multi-story buildings, with no lobbies? And just where would people park?
This is the strangest concept I’ve read about in a long time.
Here in SM, the city extorts the construction of “low-income” housing in exchange for building permits on middle-class housing. Typically these “low income” units are built 45 units per acre or more. A typical unit is a 375 sq ft “studio” apartment.
Don’t get me started on the “stop every two blocks” bus system or light rail. I agree with all of your posts on PDX, including who is to blame, but I have one question: Doesn’t kind of imply “It’s different here” as far as prices are controlled? When you get right down to Portland’s zoning rules, they aren’t really making any more land and we certainly continue to have an influx of equity locasts.
yuck. locusts*
Who do you think is the dumbest? The developer, the city government that allowed it to happen, or that one lone sucker that bought into it?
In places like Portland and Los Angeles the buyers have a partial excuse. Planners and developers in their evil union have conspired to deny buyers choice. With limited choice thee buyer is left with bad, worse and the few remaining nice places exceedingly expensive due to both supply and demand imbalances. The developers don’t care so dumb doesn’t apply to them, th money is all the same color. Who’s left? The would be arbiters of how they think you should live; the urban planner elite.
How about condos in Grand Junction, CO?
‘Officials with the Downtown Development Authority are crafting plans to introduce an influx of housing. The goal is to have 1,000 units in the next 10 years in an area that currently contains less than one-third of that amount. The vision has its skeptics. Some wonder whether there is room for 700 units downtown and enough parking and where the parking will come from. Others question whether a market will develop for housing downtown at all, in part because the prices listed for the units that are or will eventually be available are beyond what most people can afford. Only two of the six Reed Building condos are occupied. The prices for the units range from nearly $500,000 to nearly $900,000.’
‘Burton said people likely have experienced sticker-shock with the Reed Building. He believes, however, that clients with deep enough pockets will come around. ‘In the long run, I really don’t have any concerns at all,’ Burton said.’
Ben posted thie above article while I was writing my comment below.
This is from Wikipedia about Grand Jct:
“Grand Junction is a city in Mesa County, Colorado, USA. The population was 41,986 at the 2000 census. The city is largest population center on the Colorado Western Slope, unofficially serving as the capital of the region”
there you have it, the largest city for 250 miles, population 41k
now, I ask you….WHO (WHO!?) is going to buy 1000 condos starting at $500k. Downtown living in Grand Jct? I had to pick myself up off the floor I was laughing so hard! It’s a pleasant enough place, but to make it sound like some hip metropolis is just ludicrous.
People is this country have gone completely insane! LOL
WHO (WHO!?) is going to buy 1000 condos starting at $500k
The ones who can’t afford to buy in Aspen.
That’s absurd. Grand Junction is like 125 miles from Aspen. that’s like saying they should put 1000 condos in Taft, CA because people can’t afford to live in Santa Monica, CA. Except there is a lot less in between in CO.
Just going by the people I know that have bought out there recently.
outta their freakin minds. 500k, in a town where the median family income is $33k. hmm. don’t think even an i.o. will cover that one. I keep tellin em to lay off the glue.
Just how many DEEP POCKET idiots do you think exist? This insanity will find a bottom and it will not be pretty! Smart Wealthy individuals still believe in the Rothschild philosophy of not buying until BLOOD IS IN THE STREETS. When that day comes the lenders will be sorry as they are the ones holding the bag!
Miami, LV, LA, etc. = First to Rise, First to Fall
Hinterlands = Last to Rise, Last to Fall
The bubble areas will lead the rise and the decline in both sequence and degree.
Nope.
Highest “value” (quality, desireability etc) - first to rise, last to fall
SF, LA, OC, NY
Exurban crap last to rise, first to fall (because that is where the most marginal buyers had to buy to “afford” anything.
The bubble moves outward and then reverses itself.
Remember, the stock crash. MSTR and Pets.com before Intel and Cisco.
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Nasdaq BEFORE S&P 500.
Nasdaq vs. S&P 500: 1995-2006
Nasdaq increased higher and faster and than S&P 500 and Nasdaq fell first, faster and harder
In the Nasdaq, the speculative stocks crashed but the big-cap tech stocks kept on going until around the Fall. Plenty of time to exit the market in 2000 unless you were in the very speculative stuff.
BTW, one comment about brokers for those that have moved to cash. I checked my June statement and was rather surprised to see that Fidelity paid 4.4%, Ameritrade .1% nd Etrade 0.75% on my cash balances. I called up Ameritrade and they’ve sent me a form to pick a different cash account. I’m supposed to call Etrade to talk with a relationship manager to see what they have available. Apparently the default cash accounts at the Etrade and Ameritrade pay pretty poorly as far as interest goes. Not an issue if you’re fully invested (short or long) but if you go to cash for a while, it’s a pretty lousy deal.
i like vanguard’s:
1. prime money market
2. PA tax-exempt money market
It already seems to be playing out this way. They are running out of greater fools in Phoenix, Miami, SF, LA, etc.
I have lived in Denver since 1978 and have owned several homes and also some investment properties over that time. I lived through the late 80s total crash, and also benefited from the huge runup in 1998-2001. I currently am very bearish about real estate’s future and own no real estate and rent by choice.
What I am witnessing now is something completely new to me. 2 seemingly opposite markets coexisting next to each other.
Market one is the new high end high rise condo construction and loft phenomena in downtown. These properties sell for $350 to $500/sq ft and seem to sell well. They keep starting new projects continually. Every new development is a ‘luxury’ development. NOTHING is being built for any level below high end unless you go way out to the suburbs.
Market #2 is the existing real estate market. The inventory of resales listed in the metro Denver MLS is continually rising, now at a record over 32,000; and from all accounts in the papers the market is very slow. Colorado has the highest foreclosure rate per capita in the nation as of May. I follow the condo market in central Denver in particular and people are asking what they paid for their units in 2001. Since they won’t get the asking price and also have to pay a realtor, they are looking at a sizable hit. The lower end of the market in single family homes in the suburbs is a blood bath, with values about 15-20% under the new price when people bought from the home builder a few years ago. This is where the bulk of the foreclosures are.
Conversations with realtor friends seem to indicate the first market is driven by a large influx of buyers from NYC and the west coast who have sold their homes there and moved to Denver; finding our prices, at only $400/sq ft, practically a bargain! The other buyers are young people with rich parents who are buying the units so their kid can have ‘a decent place to live’.
To me this just relfects what has happened under the economic policies of the last 6 years. The rich are getting a lot richer while the rest of the country is struggling. Eventually this will cause some big touble in my opinion. We all do well when we all do well.
we’re in interesting times….
Nice post Dken;…Since you have experienced the 3 major real estate cycles (80-83,89-91,2003-06) I find your insite very credible.
Pinch Me! People that cashed in from New York City are moving to Denver? Is it for the great museums, the great resturants, the opera…what??? All those that made money from real estate over the last 5 years better practive the following when their money goes away
“If I only Should have, Could Have, Would Have”
“…young people with rich parents who are buying the units so their kid can have ‘a decent place to live’.”
I read this type of observation frequently. “It’s too expensive here in X, so I’ll just move to Y.” But what do these people do for income? How many can create a job in Y just because they want to be there? And if housing is much, much cheaper in Y, odds are the salaries aren’t too hot, either. All I can deduce is that we are talking about telecommuters and people like airplane crew, who can live almost anywhere. But how many are those?
There are a lot of jobs like this in the software industry (which I am in). Our team has members in India, UK, New England and California and I’d guess that this is not terribly uncommon today. We have considerable flexibility as far as when we work and where. I personally think that there are social and work benefits with seeing people in person several days a week but we generally use modern technology for communications and that seems to work reasonably well.
Of course there are far more jobs where you can’t do this. But I think that more and more of the knowledge-based jobs (which some kids coming out of college should be getting) can have this kind of flexibility.
Based on your expr could you give more “details” of what may happens in 1-3 y ?
Market one is the new high end high rise condo construction and loft phenomena in downtown. These properties sell for $350 to $500/sq ft and seem to sell well.
Here in SF Bay Area they advertise Denver luxury condos, I assume they are most bought by CA equity locusts.
“http://marketplace.publicradio.org/shows/2006/06/28/PM200606287.html”
Has any body seen this, Robert reich has now jumped on the bubble band wagon.
From the Reich article:
“I just bought a house in Berkeley, Calif., I couldn’t have afforded a year ago. I still can’t afford it, but at least I’m breathing.”
He bought near the peak and he’s giving people advise on the housing bubble??? I wonder if he’ll still be breathing when he goes underwater on his loan.
‘Conversations with realtor friends seem to indicate the first market is driven by a large influx of buyers from NYC and the west coast who have sold their homes there and moved to Denver; finding our prices, at only $400/sq ft, practically a bargain! The other buyers are young people with rich parents who are buying the units so their kid can have ‘a decent place to live’.
To me this just relfects what has happened under the economic policies of the last 6 years. The rich are getting a lot richer while the rest of the country is struggling. Eventually this will cause some big touble in my opinion. We all do well when we all do well.’
Excellent observation. Notice how well certain areas and submarkets that cater to well off boomers cashing in some of their chips have done the last 4-5 years. Of course a whole new cottage industry piggy backed on this trend spurred in great part by the tunnel vision of government officials and created a monster that will result in massive turmoil and social upheavel in many markets for years to come.
He’s from the Clinton administration. Of course he’s going to tell other people what to do, how to act while his personal behavior is exempt from the same edicts.
which of course is completely different from GOP big wigs, like 3 time married Gingrich and gambling king/moral arbiter Bill Bennett…lol
let’s not go there…
“The rich are getting a lot richer while the rest of the country is struggling.”
Without a doubt. Bush’s tax cuts have played a large role in this result.
One of my tax clients (the most egregious example) collects about $400,000 in dividend income annually. Before the cuts, his tax bill was pushing $140,000. His new bill: $60,000. And how does his windfall of $80,000 contribute to American productivity? It doesn’t. It’s zero.
Even worse, the AMT is biting just about everybody in the ass these days, but dividend and capital gain income is exempt from the calculation!
Talk about a terrible result.
Winjr - “And how does his windfall of $80,000 contribute to American productivity? It doesn’t. It’s zero.”
Political parties aside, don’t you think this fellow will spend a chunk of that windfall? If he does, then he is helping to create jobs in the standard economic model. You might argue that most of the jobs will be in China, but I don’t see how his not receiving the money is better than his having it to spend or invest.
Chip,
I’m no economist, but IMHO, the healthiest kind of economy is one where the greatest amount of money circulates among the greatest number of people — especially when trading for goods and services, as opposed to credit/debt.
Rich people are rich because they hoard resources. If they lend at a profit (interest), the hope is to get back all of their money, and hoard even more. Poor people have to spend most of what they take in. Their money is in constant circulation.
Not that I like to pay higher taxes (most of my personal income is cap gains), but even I can see that it’s not “fair” that I make money while sitting behind a computer; and tree trimmers, gardeners, warehouse workers, etc. are working much harder than I for barely enough to feed their families.
The easier my jobs have been, the more money I’ve made. At least that’s my experience.
AMT is not exempt from Capital Gains. We’ve even got AMT in California. In fact I pay about 60% of my income in taxes when you add all the use, property, income, parcel,automobile,and personal taxes.
Because of the National attention on the sky high real estate market of California and other higher priced locations ,every town and city in America thinks they should have higher prices /luxury condos /tracks in the middle of nowhere etc.
This high end luxury condo mania in towns where you would not usually have such a demand for such a product are the developers trying to create demand ,with equity locust and baby boomers from California and New York etc. , being the target buyers . Never mind the locals with all this building because they were not the builders target buyers .
Investors are pulling from the market and the stupid buy down buyers from California will eventually balk at the prices ,(or they won’t be able to sell their pad at an outragous price ). When the California market starts to take a haircut , it will effect prices across the nation .
““Just how long can the party last? A lot longer than you might think.”
Unfortunately a true statement. However, I think it will be shorter then it would be had fraud not been involved. I think that it is the beginning of the end as you watch prosecution of fraud cases increasing and this will be the catalyst for a rapid decline in lending ergo decreasing sales, etc. I’m just waiting for arson to join in force with foreclosures, reo’s, etc.
The Fat Lady has already sung for Utah and they can’t hear the music.
The influx of out of state money and population is likely a mixed blessing for Salt Lake and environs. This will mean more dilution of the far reaching web of Morman influence. Outsiders and their money will be harder and harder to segregate. Already inflation has put a dent in the all encompassing desire of Mormans to have huge families and be subservient to Church domination. Now infidels move in. Wonder if this will cause cracks in the omni-present Stepford Wifeish happy faces of the Breathren?
People aren’t really moving in. They’re just buying houses to flip.
Plenty of locals are buying to flip, too. They’d be crazy to sit on their hands. It’s a cash cow! The SL Tribune says so…
What’s wrong with a group of people who want to live in a relatively closed community with others who have the same religious beliefs?
I’m not Mormon, but cannot understand why people have such strong negative feelings about them. Most LDS people I’ve known are some of the nicest, most trustworthy, hard working people I’ve ever met.
I live in SLC and I can tell you that there is a housing bubble orgy here right now. Half the billboards on I-15 are housing-related. You see “Real Estate invester seeks apprentice $30-$50k/mo” all over the place. A lot of the radio ads are for builders, realt-whores, or other members of the REIC.
A typical 3/2.5 house now goes for $250k. It sold for $175k a year ago and $125k in 2000. People all of the sudden think it’s normal to buy a $300k house on $50-60k of income with 3 kids. I’m seeing Hummers, Escalades, and Yukons, and Denalis with spinners all over the place now. I see billboards saying “I earned $60,000 with my 710 credit score.” Or win $1mil with a 720 credit score (stated income mort.). The malls are packed and even the parking spots in no man’s land are filled. It’s Christmas in July at the malls.
Everyone is financing with some kind of an ARM loan. A lot of them being of the option or I/O variety. Inventory in the MLS is at a record low with the Californicators buying up crap sight unseen.
Everyone advises me to “buy now or be priced out forever.” People look down at me for renting, like I’m stupid subhuman trash. Everyone is using the phrase “renting is just flushing money down the toilet.”
The job growth here is ok, but not great. Wages have been stagnet since 2000. Most people make between $25-$40k/yr and $50-70k/year for a family. A good friend of mine makes $70k with his wife and they are buying a $350k house because his wife is like the wife in the “Suzanne researched this” commerical. They have credit scores barely over 600 and are putting nothing down.
I live in SLC also, and what you’ve written is true, every word of it.
Holey Moley, the MSRP for a base model Escalade is $54,000.
That that SUV chrome wheel crowd was here in Scottsdale for 2004 and 2005, and each month I see less and less, till it is just the hot shot locals left. You are hip deep in flipper locust scum. Lock up your kids and wife, head for the back door, run for your life!
Tyranny
well you know what I mean. Ben can we have a spell checker please
“A typical 3/2.5 house now goes for $250k. It sold for $175k a year ago and $125k in 2000.”
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with 100% financing that’s a return of……uhhh….infinity. Free money. Time to PARTAAAYYYYYY!!!
Portland’s smart growth policy is just a way for the locals to vent against people moving to their state. They are often really nasty to people who move there - especially if they are from CA. Its also just a way to increase property values for those who already own RE inside the urban growth boundry. They are saying “got mine screw you”
Did the term, Californication, originate from Oregon?
“‘Here in Utah, many people consider Park City and St. George to be ‘overvalued,’ he said. ‘But on a national scale, even Park City and St. George are still affordable. Utah is absolutely poised for a sustained period of appreciation.’”
And why in the hell should SLC RE be looked at on a “national scale”?
What about local wages and rental rates?
Reminds me of people here in SFBA who exclaim, “Oh, but it’s so cheap over in ________”. Sure, why don’t you just hop on a plane and try to find a job to pay for that 300k mortgage over in ________.
But I dunno…maybe really is different over in Salt Lake
Your so right anoninCA. . Everybody is looking at real estate in a wacky way these days . It isnt different in Salt lake City ,or any of these places that are getting this speculation demand .
What kills me is hearing about first time buyers that are not even moving into the spec. houses and just going for the flip to sell to the out of state investor . Flippers selling to flippers . Will the real end buyer please stand up .
I am from SLC originally. This flipping in SLC and UT will end badly for some. It will end here real soon, and I sure hope that the CA flippers wind up as the bagholders. They deserve it.
Yes, let’s all get rich buying and selling overpriced homes to one another, and we never live in them. Great plan. And so is building a bridge to the moon. I have one thing to say to the flippers. FLIPPERS:: DIE!!!!!!!!!!
Interesting comments. In the end ALL of this craziness surrounding RE is enabled by the super lax lending practices never seen before. It’s all Monopoly money that’s causing the crazy, illogical behavior. No money is required to buy, and most of the money loaned isn’t gonna ever be repaid!
When the money’s not REAL, don’t be surprised when the behavior isn’t REAListic either.
Well put, Denver Ken!