Utah Real Estate & Mortgage Blog

What an interesting time this is in our lives. Ever since the inception of the Internet our world has completely changed. There are SO many opinions out there, especially when it involves the Real Estate market. The Internet has allowed these “opinions” to spread to the public resulting in confusion and uncertainty.

So we are back at where we started….What’s Going On With This Market? And more importantly, Utah’s Real Estate Market.

Well, let me add my “opinion” since there is no clear answer.

We have a lot going on right now in Utah as well as national and world things that impact our local market. There is no question about it, homes in Utah have dropped in value. Credit this to many things including media scare, over building, consumer confidence, falling (now rising) US dollar, or whatever. Let’s go over each of these items.

Media Scare: The national market overall is much worse than we have in Utah. Utah’s economy is still very strong and we continue to have an influx of people moving to our wonderful state. I talk with home owners every day and the stories they are told from the media is ridiculous. No wonder consumer confidence is down!

Over Building: This is a big problem especially in cities like Saratoga Springs, Lehi, Bluffdale, etc. Builders got caught up in the craze and got every construction loan they could possibly talk the bank into and built. Now we have tons of gorgeous homes that are vacant, and desperate sellers just wanting to get out. Did you know we have over 37,000 properties for sale in the state of Utah right now? 2 years ago we were around 10,000, almost 4 times the properties. Take out half the buyers and you can see what is happening.

Mortgages: With all the foreclosures, short sales, depreciation, etc. going on it is really tough to get a loan right now. If you are self employed and have 800 FICO score, good luck getting a loan if you need to go stated. Stated income loans are almost impossible to find anymore as banks want you to prove your income. This hardship limits the amount of Buyers out there.

Housing Bill: Starting October 1st, 2008, Buyers are no longer able to ask for Seller Down Payment Assistance. For the next couple of weeks Buyers can ask the Sellers to pay for their 3% down payment needed to secure a loan and move in with next to no money out of pocket. Back in the days Buyers used to have to bring in 10-20% down on a home to purchase so you can’t complain too much. The last decade we have seen 100% financing options which as you can imagine would lead to a higher rate of foreclosures. Banks were betting the home would appreciate enough to cover their costs if the Buyer defaults in an up market. Not anymore! Without a booming market it’s only natural the banks will cut their liabilities. There are many other items about this bill that I will talk about on my next post so stay tuned.

Price Ranges: Homes over the 300k price range have been hit the hardest with some homes dropping 30-40% in value. Homes under 300k are still selling, but taking a lot longer than they did in previous years due to financing restrictions and inventory supply.

Forecast: I have a bunch of potential Buyers just waiting for us to hit rock bottom before they buy. I think if you are looking to buy a home in the next 5+ years then you should seriously look into buying anytime before next spring. I feel spring of 2009 things will start picking up and we will resume our healthy 2-4% annual appreciation. This correction in the market was really needed and with a new president, rising dollar, new loan programs, lack of new construction resulting in absorbed inventory, I think we are on our way there.

Next week i will talk about Indian Reservation Down Payment Assistance as well as additional details on the new housing bill that passed. I would really appreciate any feedback (good or bad) as well as welcome any blog topics you want me to touch on.

Kristopher Bowen
Real Estate Professional/Real Estate Broker
801-999-8005

Hi Utah and Beyond! I’m your local Utah Mortgage Pro. Please feel free to ask me questions about mortgages and I’ll do my best to respond quickly.

I hope everyone enjoyed that great accomplishment by Michael Phelps over the weekend. 8 GOLD medals! Wow! I have to admit though, it was the 7th gold medal that really blew me away. Winning by 1/100th of a second. His mom’s expression was of disbelief too. But he did it. He earned that gold metal.

Aside from keeping up with the latest accomplishments of our athletes in Beijing, I’ve been focusing on the latest laws and regulations that are effecting the mortgage industry. Mainly the new FHA rules that are going into effect October 1st of this year. If you’re looking at purchasing a home with little or no down payment now is the time to do it before these rules go into effect.

I started in the mortgage business over 10 years ago and have seen the banks and lenders loosen their guidelines to the point of all you needed was a credit score and you could get a loan for over $1,000,000! It was just too easy. No risk was involved for the borrower and with a slowing economy it spelled disaster. That merited these new changes by FHA. The new changes are not a bad thing, just different. I’m curious to know what your thought’s are on this subject…

I want to share my enthusiasm of the Olympics with you. These things are just great in so many ways. I love the world camaraderie that happens during the Olympics. Most every other time of the year, all you hear about is how this country is fighting with this other country…etc. This is not so during the Olympics. It’s too bad we can’t find another ways to have everyone put things behind them (for at least short term – if nothing else) and enjoy the time, life, world. I’ll stop there though as I don’t want to get too political, as I’m sure none of you want me to either!

A couple of nights ago I was sitting on the couch at home and watching Michael Phelps, you guessed it, win another gold medal. Only this time he had some help. It was the Mens 400-meter freestyle relay (iirc). Man was that fun to watch. For all of you that missed it, basically what happened was that the US wasn’t really the favorites, but the French team was and we beat them. It wasn’t any normal win though in my book. They were so confident that they were even talking “smack” about team USA. Apprently one of the swimmers on the French team is the best in the world at that event. Well, to make a long story short, team USA was not leadng in the last leg of the event and Jason Lezak was able to erase a fairly large lead and beat the French team. They even did it in world record setting time. Add another Gold medal to Michael Phelps’ resumé…

Let’s all cheer hard for Phelps tonight as he continues his quest to become the most celebrated story in Olympic history.

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