Becky Nay’s Blog

According to a recent report from Global Insight, an economic and financial analysis forecasting firm, current housing statistics indicate that now is the right to time to buy. They claim that the U.S. housing market as a whole is undervalued by 3.8 percent. Global Insight analyzed 330 metropolitan areas in the United States and found that 241 metro areas experienced price declines in the third quarter of 2008 in comparison to 150 metro areas in the second quarter.

The markets that were hardest hit were in areas that were most overvalued three years ago. This study, a combined effort by HIS Global Insight and National City Corporation represented 78 percent of all existing housing units in the United States.

Low intrest rates and increased affordability make today’s market a buyer’s dream!

Source: Global Insight (12/03/2008)

Salt Lake City is in great shape to rebound from the struggling real estate market, Smart Money, the monthly personal finance magazine from the Wall Street Journal, reported in its November issue. The article, noting that the national housing statistics are dragged down by boom-and-bust markets like Las Vegas, said there are signs that “the overbuilding and speculative pricing that inflated the housing bubble are working their way through the system.”

Salt Lake was named one of 25 cities poised for a rebound because of job gains in a variety of industries such as health care, education and natural resources. “That diversity has offset tough times for local home builders and information technology companies, keeping job growth in positive territory - and putting a safety net under home prices,” the article said. Citing an analysis by mortgage insurer PMI Group, the article indicates Salt Lake City has a less than 1 percent chance of home prices being lower two years from now than they are today.

Jillinda Bowers SLBR President
“For the second year in a row, CNBC has ranked Utah the No. 3 Top State for Business.
Each of the 50 states was judged in 10 categories. Utah received high marks in several areas, including: the cost of doing business, its workforce, the economy, quality of life, and business friendliness.  “This ranking highlights our constant effort as a state to maintain a strong economic foundation,” Utah Governor Jon Huntsman Jr. said in a prepared statement. “Our unmatched quality of life, livability and dynamic workforce make Utah a great place for business, employees and their customers.”  Of course, Utah has consistently scored among the top states when it comes to doing business. Last year, Utah ranked as the most economic competitive state in the nation, according to the Boston-based Beacon Hill Institute. In addition, a separate report last year by the American Legislative Exchange Council ranked Utah No. 1 in the nation in Economic Outlook, a forward-looking forecast. The ranking gauges a state’s economic future based on 16 factors like fiscal policy, security, infrastructure, business incubation, state minimum wage, tax policy and education freedom.  “America is one massive free trade zone, where businesses, capital, and people move freely,” the ALEC report stated. “States are now openly competing with one another for assets, and they are doing so on the basis of their tax systems, their liability laws, their education systems, and their quality of life.”  The ALEC parameters for measuring economic outlook are areas where Utah continues to excel. In a time of economic uncertainty, where would you rather be living? States like Arizona, California and Florida are losing jobs, while Utah continues to rank among the top job producing states in the nation.  A business-friendly state combined with continued household formation and job growth are what will continue to set our state apart from the rest.”

By Amy Choate-Nielsen
Deseret News

Published: Sunday, June 29, 2008 12:12 a.m. MDT

HERRIMAN — New construction may be disappearing from many west-side cities in Salt Lake County, but here, where a newly announced, billion-dollar development is waiting on the horizon, the situation is drastically different.The Sorenson Group announced plans this week to build a bonanza of development in Herriman’s soon-to-be Towne Center project — with a new City Hall, school, county recreation center, county library and courthouse at its core. All totaled, the project — which should begin within 90 days and finish its phases in 10 years — will occupy more than 375 acres in the heart of Herriman.

“Herriman is a very vibrant, growing community in the county,” said James Lee Sorenson, CEO of The Sorenson Group. “We’ve developed a great relationship with Herriman where there is mutual trust and respect. We work together and we understand their needs and goals. They understand some of the challenges and needs that we have.”

The Sorenson Group, which developed the Rosecrest area of Herriman, donated 27 acres where Herriman’s new City Hall and the newly named J.L. Sorenson Recreation Center will sit in coming years. The development company also donated land to Salt Lake County for a library.

In exchange for donating the land to Herriman, The Sorenson Group will receive allowances to build the residential/retail portion of their project at a higher density.An estimated 2,000 housing units will be completed as part of the project, including condominiums, townhouses and single-family houses. Some of the units will be completed early next year.

“One of the things that has made Herriman as successful as it has been, I believe, is our perspective of viewing development from a corporate, municipal partnership,” said Mayor Lynn Crane. “We have certainly enjoyed that kind of relationship with Rosecrest from the beginning, and they have a wonderful presence in our community.”

Construction on the Sorenson Recreation Center should begin by the spring of 2009, to be completed in 2010. The southwest regional project stalled for nine months because the county’s original site conflicted with Utah Department of Transportation plans to build the Mountain View Corridor through the area.

Construction on the library should begin next year, said Salt Lake County Mayor Peter Corroon.

“This project really is a recognition of the growth that is taking place in the southwest portion of Salt Lake County,” Corroon said. “The growth has happened quickly, so I think we’ve recognized that growth and are trying to meet that need as quickly as possible.”

Corroon said the project is a “better way to plan” because it brings a variety of civic buildings to one central location so residents won’t have to travel to multiple areas across the city.

“I think, in Utah, this is a great example of forward-thinking,” Corroon said. “It almost hearkens back to the past, to the European-style planning where the town center is the focus and the community builds up around it.”The project will be situated on Main Street, near 12600 South, in the center of Herriman. Aside from 45 acres of retail space and 52,000 square feet of office space that will be included in the development, the Towne Center project will also have 20 acres of recreational space, with a proposed one-acre lake, ice skating rink, splash park and movie theater.

When it is completed, the project could change the face of Herriman, which had an estimated population of about 15,000 people in 2006, according to U.S. Census Bureau statistics, but Crane says residents are supportive of the development.

“Obviously, interaction with the residents often creates comments … from people that were attracted here for a certain reason, and many of them came here a few years ago when there weren’t as many people and there wasn’t as much noise,” Crane said. “You get those kinds of comments, which are natural and normal, but … in general, this concept and this development have generated as much excitement in our city as any development or proposal.”

Daily Real Estate News  |  July 11, 2008

Companies Help Employees Buy Homes

In the wake of the housing crisis, more businesses are offering employer-assisted housing (EAH) programs.

Illinois was an early advocate of such programs, approving a law to provide a tax credit of 50 cents for every dollar that employers invest in EAH. Other states have followed suit, and similar legislation has been rolled out at the federal level as well.

The plans generally combine counseling services with down payment assistance. The down payment programs are usually loans that are forgiven if the employee stays with the company a certain amount of time, which also helps reduce employee turnover.

The programs appear to work. A recent study of one of the oldest EAH programs at Aurora Health Care in Milwaukee showed that the 208 employees who bought homes through the program stayed with the company significantly longer than average and performed better than other employees.

Source: Christian Science Monitor, Amanda Paulson (07/11/08)

I’m sure they are talking about the field between 12600 S & 13400 S west of Bangerter Highway. It’s kind of funny but 3 years ago, when we had all this hoopla over the Wal-Mart and all of the High-Density mixed use housing that they wanted to put in. I had mentioned to the Riverton City planner Jason, I forget his last name now, that why don’t they put all of this commercial development just west of Bangerter. Because there were no houses, residents, to conflict with. It was just one big open field, and I said to him, “Then you can put in roads, businesses wherever you want.” Because one of the concerns people had was the traffic congestion this would cause at rush hour traffic times at the intersection of 3600 W. and on to Bangerter. Now it looks as though they may be putting in a large commercial/residential development after all. Funny!

by Darci Girdler
Large commercial developments continue to make their way through Riverton planning approval even with single family housing building permits at an all-time low. Despite the housing bust, Riverton City officials are looking to the future by considering a California-style town center, similar to one currently located in Rancho Cucamonga, Calif.

Mayor Bill Applegarth, all five council members and five staff members in senior management (including City Recorder Virginia Loader) took a trip June 14 to Victoria Gardens in Rancho Cucamonga to see the 150-acre mixed use development by Forest City Developers, which consists of retail shopping, multi-family housing, a cultural center, performing arts center, library and public events area.

The one-day trip cost the city $5,000, paid for by the city’s economic development fund.

“We felt good about the trip — very proactive. We thought the style of community would fit well into Riverton and wanted to see it firsthand. This is purely an exploration — a conception right now,” said Economic Development Director Jeff Hawker.

If the dream became a reality, the concept “town center” would be unique for its architectural styles, resembling the 1930s era — just like Victoria Gardens. “Victoria Gardens is different because it feels like a city center that is well established even though it’s new. It looks as if it’s developed over decades. It’s heavily landscaped. We want that same kind of beauty,” he said.

Applegarth said he wanted to take the council to Victoria Gardens because he “dreams of an old town center.” He said he heard associates around Salt Lake talk of the mall and how remarkable it was, so he called a mall representative and arranged the tour.

“It’s one of the most unique malls in the U.S. It has a small town feel. You can travel both ways on the road with parking on each side and it’s very pedestrian friendly. You can spend the whole day there just hanging out. We need those hang out places in our community,” he said.

For some time city leaders have been discussing their vision for farmland property located between 12600 South and 13400 South — currently owned by The Church of Jesus Christ of Latter-day Saints. The council placed a moratorium on building permits for the area in May to allow them adequate time to discuss land use plans and change the master transportation plan accordingly.

If the city pursued such a development, it would be “at least 8 to 10 years away, but it’s important to change the master transportation plan now so we don’t have piecemeal projects like scattered car washes and storage facilities,” Hawker said.

“We haven’t negotiated anything with the landowners,” he said of the idea.

Hawker said if the development became a real possibility it would be a fraction of the size of Victoria Gardens and have high visibility.

“There would be a lot of traffic flowing by this site with Bangerter Highway and the new Mountain View Corridor highway coming,” Hawker said.

Applegarth said if a smaller replica of Victoria Gardens doesn’t happen it would still be nice to get something similar in the area. “The whole idea for this trip was to get a good idea about what we would like to see there.”

The goal for the concept is to be unlike anything in Utah, “a retail and dining experience — ultra, ultra high quality,” Hawker said. “We want to be aggressive now so we can make Riverton residents proud of the future outcome to the area.”

If city officials change the master transportation plan to fit such a development, they may still run into the problem of getting a developer to build it.

“We don’t have any offers or interested developers yet, but we hope to,” said Applegarth.

By Amy Choate-Nielsen
Deseret News

Published: Sunday, June 22, 2008 12:10 a.m. MDT

RIVERTON — Hard times have fallen on Riverton.Like many other cities feeling the crunch of a faltering economy and skyrocketing fuel prices, Riverton is considering increasing property taxes by more than 200 percent to fill a gap in the city’s revenue caused by evaporating new construction.

Mayor Bill Applegarth trimmed about $700,000 from the 2007-08 budget, and five city employees — including the public works director — have been laid off, but still, the city needs an additional $1 million in revenue, Applegarth says. The city currently receives about $460,000 in property-tax revenue, which is roughly 2 percent of the total tax bill property owners in Riverton pay.

“Our problem isn’t expenditures, it’s revenue stream,” Applegarth said. “We’ve had, in the past, a high building rate of residents. The last fiscal year we were right around 1,000 residential building permits for the year. This year we’ll be right around 100 building permits. You can see that revenue stream has dropped a great deal.”

The city’s projections for sales-tax revenue is $700,000 short, and the city is running on a loss of about $1.5 million in new construction fees from its 2006-07 budget. All but $800,000 of the city’s rainy day fund has been tapped to supplement the 2007-08 budget, and Applegarth says he doesn’t want to deplete those funds any further.

The city commissioned a survey of 454 Riverton residents in April to gauge how receptive residents would be to a potential tax increase of about $8 a month — or $96 a year, for an average home valued at about $330,000 — on the city portion of property owners’ property-tax bill. About 59 percent of residents polled in the survey said they would be willing to pay the increase to keep the same level of city services, including 6 percent who said they would pay the increase if no other sources of revenue could be found.Applegarth is quick to point out that Riverton residents pay some of the lowest property taxes in the state — even if the increase is approved the city will still be lower than most of its neighbors — and he is emphatic that he hates suggesting raising taxes, but the mayor is comforted by the statistics of the survey.

“If I had not had the support of the people to increase property taxes I never would have taken that budget to the council,” Applegarth said. “We’re dealing with the people’s money and people need to make decisions on how they feel about services. … If (the survey) had come back that over 50 percent of us wanted to cut services, that’s what my budget would have reflected.”

Some residents are skeptical that a majority of residents would support such a dramatic tax increase — and that the city really needs the revenue. Resident Bill Cox says he thinks the survey of 454 residents was misleading and manipulative. His wife was one of the 454 polled, but he does not support a 230 percent increase.

“With the economy being so bad, I don’t think it’s the best idea,” Cox said. “I think operations need to pull back. If they can’t cover costs for essential city services, then they should go to the residents. But a 300 percent increase at once? That’s a lot.”The city will have one more public hearing on Aug. 12 before the new tax rate is approved by the city. In the meantime, each property owner should receive a property-tax notice in early August detailing how much the increase would cost them.

Former City Councilwoman Lisa Mariano says she can see how the increase will hurt, but she understands why the city would need to raise the tax.

“In terms of percentage, (the tax increase) looks huge, but in terms of money, that’s the least of my worries,” Mariano said. “I know no one wants to pay more than they have to right now, everything is tight, but everything is tight all the way around, and it’s tight on the council, too.”

A conversation that I had with a seller a few days ago led me to believe that a lot of people out there don’t realize that short sales and foreclosures affect them as well. This homeowner trying to sell their home said that “We’re not selling short sale or foreclosure so I don’t have to price our home that way.” What this person isn’t aware of is, that whether we all like it or not, this does affect everyone’s home values, including those not looking to sell their home. This affects those that are are trying to refinance or get a home equity loan.

It’s important when selling one’s home that it is priced “in the market” not “out of the market”. Meaning that if it is priced too high (out of the market) it will not sell. Even if one is looking at the prices of their competitors. It’s most important to look at the ’sold comparables’. That is what an appraiser is going to look at to put a value on a home.

Realtors do have access to this information to help put a value on a home. We do look at the sold, active listing comparables as well as under contract. We put all of this information together to help put a value on a home.

If anyone would like a free Comparative Market Analysis of their home please just call or email me. I will give you this information to help you know where the value of your home stands.

Thanks,

Becky

beckynay@kw.com

www.beckynay.com

801-573-2077

I hope to post useful information that would be great for anyone regarding real estate. If you have a comment about something that I write about or information that I share, please do so. Thanks!

Becky Nay

Salt Lake REALTOR® June 2008

By Dave Anderton

The headlines are unavoidable. “Meltdown For Housing: Why The Worst Is Yet To Come,” screamed the cover story of a recent national magazine with

a portrait of a red house melting into oblivion. “The Great American Slowdown” shouted the headline of another magazine. “Buyer and Seller Beware,” warned yet another. As the national media focuses on what is wrong with America, Utah economist Jeff Thredgold isn’t losing any sleep. In fact, Thredgold, who runs his own consulting firm and serves as an economic advisor to Zions Bank, believes the divide between the media’s take on the U.S. economy and the actual fundamentals has never been greater. America’s economic opportunities, Thredgold maintains, abound as much now as ever before. “The national media has led millions of Americans to believe that the economy is merely limping along, creating few quality jobs, and on the brink of disaster,” Thredgold writes in his latest book, “EconAmerica: Why the American Economy is Alive and Well. “Such negativity dominates the economic writing found in the nation’s bookstores. Books focusing on the demise of America; the coming debt crisis; the coming oil crisis; and the imminent dominance of China, Europe, or India are far too prevalent.”

Excerpts from the article:

Utah ranked No. 2 in the nation in house-price appreciation in the first quarter compared to year ago.

Our economy is three times the size of No. 2 Japan. It is four times the size of No. 3 and No. 4 Germany and China.

economists are “dialing back dire forecasts.”

The media drives negative news when it’s negative and drives positive news when it’s positive.

In Utah, every sector is doing well Manufacturing, surprisingly, is doing well.

After five consecutive quarters of posting the highest rates of house-price appreciation in the nation, Utah fell to the No. 2 spot in this year’s first quarter, according to a May report by the U.S. Office of Federal Housing Enterprise Oversight. For the three months ended March 30, Utah home prices appreciated 5.58 percent compared to the first quarter of 2007. When compared to the fourth quarter of 2007, Utah home prices declined slightly at 0.20 percent.

Wyoming saw the strongest house-price appreciation of all states at 6.34 percent. California ranked dead last, with home prices there dropping 10.58 percent. Besides California, 14 other states (including Nevada, Florida, Arizona and Michigan) saw home prices fall. Three Utah cities made the top 20 list of 292 U.S. cities showing the highest rates of appreciation. The Provo-Orem area was No. 6 at 6.76 percent. Ogden-Clearfield was No. 9 at 6.64 percent. Logan ranked No. 15 at 6 percent. Salt Lake City was No. 22 at 5.39 percent. St. George was No. 235, with home prices there dropping 3.65 percent.

Nationally, home prices were down 0.03 percent in the first quarter compared to a year ago and down 0.23 percent compared to the fourth quarter of 2007. James B. Lockhart, OFHEO director, said the national price declines bring positive and negative news. “For

homeowners and financial market observers, these declines spell further erosion in home equity levels and potentially more trouble for mortgage markets,” Lockhart said. “To prospective home buyers who have been shut out of homeownership because of affordability constraints, these declines may be welcome news, as are continued low mortgage rates.”

Top 10 U.S. Cities With Highes Rates of House Price Appreciation

Houma-Bayou Cane-Thibodaux, LA — 11.22%

Grand Junction, CO — 9.08%

Wenatchee, WA — 8.02%

Austin-Round Rock, TX — 7.74%

Billings, MT — 7.09%

Provo-Orem, UT — 6.76%

Anderson, SC — 6.73%

Mobile, AL — 6.64%

Ogden-Clearfield, UT — 6.64%

Hickory-Lenoir-Morganton, NC — 6.41%

Top 10 Economic Myths Perpetuated by the National Media

1. U.S. economic growth continues to be substandard.

2. We are losing our ability to “make things” in the

economy. We are rapidly approaching a time when

all we will do is serve each other hamburgers and

trade information with each other.

3. We have endured a “jobless recovery” in recent years.

4. We are losing high-paying jobs and replacing them

with low-paying jobs at Wal-Mart and burger joints.

5. We will be forever dependent on oil-rich nations.

6. Reducing the capital gains tax rate reduces tax revenue…

and vice versa.

7. We run a huge trade imbalance with the rest of the

world because we are not competitive.

8. Social Security will not be there for our children

and grandchildren.

9. As Americans, we have an insatiable appetite for

consumption… We save little for the future.

10. The stock market is overvalued.

Source: Jeff Thredgold

Dave Anderton is the public relations director for the Salt Lake Board of REALTORS®.