Northern Utah’s Top 10 Stories Impacting Real Estate

I hope that you had a chance to read Steve Harney’s blog on the top 10 national stories for real estate because some of them also impact Utah directly as well.  If you haven’t read it yet and would like to review the blog post please click here!

This post deals with the stories that have impacted the Northern Utah market in 2009.  Some impacts are the same national stories but applied to the Northern Utah markets.

1. Let’s begin with Unemployment.  Nothing will impact the payment of mortgages like losing one’s job.  Without the money there can be no payment made.  The Nation’s unemployment rate currently stands at 10.1% while Utah’s unemployment rate stands at 6.3%.  Although Utah is blessed with a better than average unemployment rate there are still a lot of good people who are looking for work.  Northern Utah’s delinquency rate is still rising and the cure rate is not very good which means that the short sales and foreclosures of 2009 will continue… even at a higher rate in 2010.
2. Mortgage Rates: Northern Utah is now enjoying some of the lowest interest rates in history.  A recent search of the Golden West Credit Union mortgage rates shows 30 year fixed mortgages at historic low rates.  High home inventory, low interest rates, and the $8,000 tax credit have increase home sales for the past seven months consecutively.  Our sellers have struggled to keep their prices from declining too much but 2009 was certainly a buyer’s dream market.
3. One thing Northern Utah has in its favor right now is a constant inflow of new citizens to grow its population.  Population Growth will always generate new housing demand which will keep prices from falling as far as other areas of the country.  Here are the links to the Northern Utah Counties (Weber, Davis, Salt Lake, Utah, Morgan, & Summit Counties) showing unemployment rates, population growth, and the economic impact on wages in each county.  The Department of Workforce Services has a website with information relating to population growth, unemployment information, and some insight on future growth. Simply select the counties you have an interest in and click on the View Data button.
4. Many Sellers are wondering when the market will return to its 2006 values so that those needing to move will be able to do so without losing equity.  The Prognosticators indicate that Utah will not see these values again until 2018.  This is one prediction that I hope is way off and that it will come much sooner. 
5. Investment Opportunities.  In today’s Wall Street Journal there is an article showing that 2009 was a banner year for stocks with an increase of 20% and 61% since the big drop in with the economic crash.  Interestingly enough, if you had invested $100,000 in the Dow in 2000 you would now have $88,000 even with the stock market’s recent rise.  If you had invested $100,000 in real estate in 2000 you would now have $144,000 even with real estate’s most recent decline.  In Northern Utah real estate still remains one of the best investments in 2009.  One of the best explanations of what happened in the stock market crash and subsequently what happened to real estate value is on the Wall Street Journal’s most watched video list.  It is entitled The End of Wall Street: What Happened?.  You will enjoy watching this summary of events leading to the financial collapse. 

In tomorrow’s post we will add five more factors that have impacted real estate in 2009 to complete our top ten list for Northern Utah.

Contributed by Steve Randall steve@welchrandall.com