Utah Homes Sales Dropping
Last Edited: Thursday, 24 Apr 2008, 8:07 AM MDT
SALT LAKE CITY -- Plummeting home sales along the Wasatch Front are finally starting to take their toll on selling prices.
The Salt Lake Board of Realtors says 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. 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.
In Davis County, which had a 26.6 percent decline in home sales, median prices remained largely unchanged at $220,000.
Average prices fell in Tooele County by 6.3 percent, to $180,000, coinciding with a steep 45.5 percent drop in sales from last year.
Another Story
Foreclosure future grim for Utahns
By Jasen Lee
Deseret News
Published: April 17, 2008
Utah's housing bubble is forecast to burst in a big way, with one in 25 Utah homeowners projected to be in foreclosure in the next two years, according to a report released Wednesday by The Pew Charitable Trusts.
The report attributed the rise in foreclosures to subprime loans made in 2005 and 2006. In those years, 24 percent of home loans in Utah were subprime.
The outlook is grim in several other states, as well, including Nevada, where one in 11 homeowners are projected to be in foreclosure in the next two years, and Arizona, where one in 18 homeowners may face the same circumstance. Rounding out the five states with the highest projected foreclosure rates were California at one in 20, and Utah, which tied with Colorado at one in 25, or a 4 percent rate of foreclosure.
"Is the American dream slipping away?" asked Shelley Hearne, managing director of Pew's Health and Human Services program, in a letter introducing the report, titled "Defaulting on the Dream: States Respond to America's Foreclosure Crisis."
Because of foreclosures in their communities, 40 million homeowners could see their property values and their municipalities' tax bases drop by as much as $356 billion, largely over the next two years, said Hearne, a professor of health policy and management at Johns Hopkins University.
"The stakes are incredibly high. Homeownership is the primary vehicle through which American families build financial security," she said. "It also is an essential building block of state and local economies."
Jim Wood, director of the University of Utah's Bureau of Business and Economic Research, said that Utah's previous highest rate of foreclosures was about 2 percent in 2002, coinciding with the last recession. He noted that foreclosures are closely tied to unemployment rates and rapid home price appreciation, which Utah was able to avoid for the most part during the national housing boom, due to the state's strong, stable economy.
The Pew report's prediction of a 4 percent foreclosure rate "would be close to an all-time high," he said "It's quite pessimistic — double what we've been before."
He attributed the state's recent housing bubble to overly optimistic beliefs by those in the housing industry, combined with eager homebuyers and sellers, which prompted a home-building run-up during the past few years.
Hearne said that the Pew study is the first comprehensive look at what all 50 states and the District of Columbia are doing to try to address the subprime mortgage fallout. The study was a joint effort between the Pew Center on the States and Pew's Health and Human Services Program.
"Stronger standards from federal policymakers could have helped avert this crisis," Hearne said. "Future legislation must consider ways to strengthen standards to prevent more troubling loans from being made."
Fourteen states, including Utah, have created statewide foreclosure task forces to bring government, lenders, consumer advocates and experts together to address the crisis.
The Pew researchers analyzed two principal data sets: the Mortgage Bankers Association 4th Quarter National Delinquency Survey, and the Center for Responsible Lending's foreclosure projections and subprime spillover data.
The Mortgage Bankers Association quarterly data are based on survey sampling techniques and offer a point in time picture of loans in various stages of delinquency or in the foreclosure process, the report said. The MBA foreclosure estimates refer to all loans in the foreclosure process, as well as loans that are seriously delinquent, or more than 90 days past due.
The Center for Responsible Lending's estimates evaluate the total number of subprime loans disbursed during 2005 and 2006 and give the number of loans the analysts expect will be foreclosed upon. This estimate includes foreclosures that will occur in 2008, as well as subsequent years.
Wood said resets of variable-rate subprime loans have contributed to the increase in foreclosures, both nationally and in Utah.
"We will probably go well above the national average," he said, "but 4 percent seems high."
