Real Estate Forecast for 2008 (in English)

Before I give you my professional opinion about what will happen to real estate in Utah in 2008, let me tell you that Real Estate is very local and everything you will read below may not apply to you at all.

In my opinion, you are going to see slower seller's market (sell of properties), I expect the activity may pick up once people know the full extent of the mortgage crisis which is expected to peak in 2008. However, mention such a scary word as crisis, let me tell you that financing still exist, you just need to be more patient looking for the right company to work with. I will touch base about some of those programs tomorrow.

Hearing all those national news, I would not be surprised if home prices in Utah will continue to go up. It will not be as fast as 2 years ago, but between 7-10%. Lower-end properties between 175-300K range should increase approximately 7-10%, homes in 300-500K range-about 5%, and properties above 500K may experience some problems and would need to lower the price 10-15% in order to sell.

Overall this state should not experience problems to the same extent as other states. You, certainly, can ask me why and I will tell you:

1. We have tremendous population grown in 2006-2007 year, about 3.2%, in comparison with the rest of the country-0.9%
2. Great Job Growth-about 4.3% in October 2006-2007. U.S. Employment growth for the rest of the country was only 1.2%
3. Unemployment for the same period is 2.8%. U.S. Uemployment growth for the rest of the country was 2.8%
4. Foreclosures in 3rd quarter 2007 in Utah: 3.92%. Same time period in U.S.-5.59%
5. Even though home sale number has dropped about 4%: 2006 3rd Quarter Sales in 2006 24.62%, and same period in 2007-20.39%, average home price went up from 2006 (about 13%). Average Home Price in 3rd Quarter of 2007 (Average in this State): $288,307
6. According to estimates from the state, 2007 had record annual growth of nearly 85,000 people, which translates into 25,000-30,000 new households.

My conclusion is local economy is strong enough, and only good things may happen to real estate in this state.

Houses over $500K may be slightly a different story. Prices were pushed up during the last 2-3 years through a combination of lower-than-expected interest rates, a robust local economy with strong job and population growth, investor activity, and agressive financing. Even though most of these factors are still in place, investor demand decreased substantially (especially from out of state), and based on current mortgage standarts, most people cannot afford these places over $500K.

I will touch base of still available mortgage programs to show you that market is good, and it is a great time to sell or buy.

Thanks,

Marina Vialtsina
(Your Local Real Estate Consultant)
801-649-5883