Thursday, December 30, 2010

Rise in signed contracts gives housing market lift


December 30th, 2010 @ 11:33am

By JANNA HERRON
AP Real Estate Writer

NEW YORK (AP) - People are starting to buy homes again, lifting a battered industry that is bracing for its worst sales year in more than a decade.

Signed contracts to purchase homes rose in November, the fourth increase in five months. That should give the housing market a boost in the first few months of the new year because there's usually a one- to two-month lag between a sales contract and a completed deal.

Economists cautioned that a major reason for the jump is that people are buying foreclosed homes, which sell at steep discounts and weigh on the broader market. Another obstacle is the sudden spike in the 30-year fixed mortgage rate, which only weeks ago had fallen a 40-year low.

Still many economists expect sales to gradually rise next year as the economy adds more jobs and home prices stabilize.

"Sales appear to be picking up and we expect better sales in the next several months," said Patrick Newport, a housing economist at IHS Global Insight. "A lot of that is because the job market is improving."

The National Association of Realtors said Thursday its index of sales agreements for previously occupied homes increased 3.5 percent last month from a downwardly revised reading in October. Contract signings were up in the West and Northeast, but down in the South and Midwest.

A reading of 100 indicates the average level of sales activity in 2001, when the index started. It was above that level during the boom years, sank during the recession and surged temporarily when the government offered tax incentives to spur sales. When the credits expired in April, the index sank again.

Completed home sales _ which the Realtors group measures in a separate report _ are expected to total about 4.8 million units this year. That's much lower than the 6 million units that analysts consider a healthy pace. The last time sales were lower was 13 years ago when sales totaled 4.4 million units.

A third of the pending sales likely will be foreclosures or short sales, where a homeowner sells a house for less than what is owed on it, NAR spokesman Walter Molony said. That tracks with the average for the year. These distressed sales go for discounts of up to 50 percent in some of the hardest-hit areas and will continue to weigh down home prices.

Many economists expect home prices to drop another 5 percent to 10 percent in the next six months before stabilizing. Prices fell in 20 of America's largest cities in October, according to the Standard & Poor's/Case-Shiller home price index released Tuesday.

There are several challenges facing the housing market aside from foreclosures. Potential buyers are worried about their jobs or are unable to qualify for a mortgage because lenders have tightened standards. And now mortgage rates are on the rise, gaining about two-thirds of a percentage point in the last month.

This week, the average rate on 30-year home loans rose to 4.86 percent from 4.81 percent, mortgage giant Freddie Mac said Thursday. That's the highest level in seven months. It hit its lowest level in 40 years in November at 4.17 percent.

The average rate on the 15-year loan rose to 4.20 percent from 4.15 percent _ the highest reading in six months. It fell to 3.57 percent in November, the lowest level on records starting in 1991.

Rates overall have been rising since November as investors shift money out of Treasurys and into stocks. Many expect the tax-cut plan will fuel economic growth and increase inflation. Yields tend to rise on fears of inflation. Mortgage rates track the yields on the 10-year Treasury note.

The report on contract signings from the Realtors showed that signings jumped 18.2 percent in the West and edged up 1.8 percent in the Northeast. The Midwest region saw a 4.2 percent drop in signings in October and the South posted a 1.8-percent dip.

Wednesday, December 29, 2010

Sandy courts national sports retailer; county commits up to $3.8M


December 28th, 2010 @ 8:59pm
By Marjorie Cortez

SALT LAKE CITY -- Sandy is courting a major sports "destination retailer" to locate on an 18-acre parcel at 11400 S. State.

On Tuesday, the Salt Lake County Council pledged a property tax increment up to $3.8 million as part of an incentive package to land the 102-year-old retailer. Neither county nor Sandy officials would name the company.

The council approved an interlocal agreement with Sandy that caps the county's contribution to the project at $3.8 million or 25 years, whichever occurs first. Sandy officials had asked the county for its full tax increment over the period of the project. The county agreed to 75 percent.

Nick Duerksen, Sandy's economic development director, said the city is competing with Boise for the company. Negotiations are nearing an end, he said.

"Once it's in place, we'll release the name," Duerksen said.

The company, according to documents, has no presence in the Intermountain West at this time.

A technical analysis says the retailer would employ an estimated 185 full-time workers and 245 part-time employees at "above-average wages, plus benefits."

Sandy officials say increased sales tax collections plus the added value of the now-vacant land should make the county whole on its contributions over time.

Duerksen said the opportunity to land such a retailer comes around only every 20 years.

Sandy has agreed to contribute 100 percent of its property taxes and fund any project revenue shortfalls through other revenue sources, according to documents.

Meanwhile, the Utah Department of Transportation opened a new freeway exit at 11400 South in September.

Although the interlocal agreement with Sandy was approved by the County Council, it will require some refinements.

Some on the council questioned the wisdom of using tax increment funds for retail development. Salt Lake County Mayor Peter Corroon said the issue "is a legitimate question."

"Are taxpayers getting their return on investment? Would this company come here but for these incentives?" Corroon told the Deseret News.

The county's Technical Review Committee said in a report that it was "comfortable with the consensus approach for the 11400 S. State project, although it does have concerns about the 25-year length of the project and the precedent it creates."

However, some of the concerns are mitigated by the "pass through" of tax revenues of nearly $13 million that would benefit the Utah Transit Authority and Zoo, Arts and Parks (ZAP) program.



Housing Starts Predicted to Hit 3-Year High

Housing starts will probably reach a three-year high of 739,000 in 2001, creating about 500,000 jobs and helping trim the unemployment rate to 9.1 percent, said David Crowe, chief economist for the National Association of Home Builders, in an interview with Bloomberg.

“This is an ugly economic cycle,” he said. “We need job creation to get people comfortable with buying a home. If they do that, we’ll create jobs that will reinforce that home buying and fuel additional job growth.”

Job growth in other sectors, as well as population growth, will also likely have an effect. The number of U.S. households will rise 0.7 percent to 118.7 million in 2011, the largest annual gain since the beginning of the housing crisis in 2007. Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, N.J., expects jobs to rise by an average of 200,000 per month in 2011.

The CEO of luxury home builder Toll Brothers is optimistic. “The recovery is here to stay,” said Douglas Yearley. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”


Source: Bloomberg, Joshua Zumbrun and Kathleen M. Howley (12/28/2010)

Friday, December 24, 2010

How to Stay Focused When Buying Your New Home...

Many buyers are paralyzed by the vast selection of houses for sale and by the fear that the value of the property they choose will fall as soon as they own it.

"Buyers have read a lot about foreclosures, short sales and how desperate sellers are," says Sarah Ritter, an associate with RE/MAX Properties in Western Springs, Ill. "They feel there is this fabulous deal out there, a mansion with all the bells and whistles. …They are convinced the next house they look at will be a better deal, and with so much inventory now on the market, they keep looking and looking."

Here are a few ways to stay focused and on track while searching for your new home:

· Line up financing. Find out what qualify for so you don't end up looking at houses you can't afford.
· Decide what you want. Make a list of the most important features and then refine your search.
· Use technology. Get organized by previewing as many properties as possible via the Internet & http://www.parkersutahproperties.com/.
· All real estate is local. Remember that those news reports you are hearing of falling prices are often in places other than where you are looking.
· Make an offer. Even a low offer is a starting point. The worst that can happen is that the sellers will refuse to negotiate.


Source: United Feature Syndicate, Lew Sichelman & Parker Smith (12/19/2010)

Thursday, December 16, 2010

Fewer jobless claims cap strong week for economy

A further decline in the number of people applying for unemployment benefits capped a strong week for the economy.

Factories are producing more, shoppers are spending more and business executives and consumers are more optimistic. The latest reports, along with a tax-cut plan that Congress is set to pass, are leading economists to predict 2011 will be better than first thought and that hiring will pick up.

Weekly claims for jobless aid dipped by 3,000 to a seasonally adjusted 420,000 in the week ending Dec. 11, the Labor Department said Thursday.

The four-week average of claims, a less-volatile measure, fell for the sixth straight week to 422,750. That's the lowest level since August 2008, just before the financial crisis intensified with the collapse of Lehman Brothers.

Weekly first-time applications below 425,000 tend to signal modest job growth. But economists say applications would need to dip consistently to 375,000 or below to indicate a significant decline in unemployment. Applications for unemployment benefits peaked during the recession at 651,000 in March 2009.

Claims have been steadily declining in the past two months, raising hopes among economists that layoffs are falling and employers are hiring more. So far, though, job gains have been too few to reduce unemployment.

"The trend is unmistakably better and this echoes good news from other leading indicators," Jonathan Basile, an economist at Credit Suisse, wrote in a note to clients.

Separately, housing starts rose slightly in November after two months of declines. Builders broke ground on a seasonally adjusted 555,000 units, a 3.9 percent rise from October, the Commerce Department said.

Even with the gain, housing starts are just 16 percent above the 477,000 unit pace from April 2009 _ the lowest point on records dating back to 1959. And they are down 76 percent from their peak in January 2006, and 45 percent below the 1 million annual rate that analysts say is consistent with a healthy housing market.

Americans are buying more imported goods. The widest measure of the trade deficit rose 3.3 percent in the July-September quarter, the Commerce Department said. Consumer demand for clothing, footwear and household appliances boosted imports. That was the fifth straight quarterly increase and could be viewed as a hopeful sign that Americans are confident enough in the economy that they are willing to spend more.

And Fed Ex Corp., the world's second-largest package delivery company, raised its earnings prediction for the full year on a better economic forecast and a brightened view for the holidays.

Thursday's reports follow encouraging data this week on retails sales and factory output. Both showed gains in November for the fifth straight month. Inflation remains tame. And a survey of CEOs at America's largest companies found that 45 percent expect to hire in the next six months.

Still, what matters most to Americans is the job market. Earlier this month, the government issued a disappointing report that showed employers added only 39,000 net new jobs in November and the unemployment rate rose to 9.8 percent.

The number of people continuing to receive unemployment benefits rose by 22,000 to 4.14 million, the department said. But that doesn't include another 4.8 million people receiving extended benefits under an emergency program paid for by the federal government.

The extended aid can last up to 99 weeks in states with high unemployment. That program lapsed Nov. 30 but would be continued through next year as part of the compromise on taxes between President Barack Obama and congressional Republicans. That compromise measure is currently before the House after being approved by the Senate.

Some companies are still cutting jobs. Yahoo Inc. said Tuesday that it is laying off 600 employees, or 4 percent of its work force.

__

AP Economics Writer Jeannine Aversa contributed to this report.

Wednesday, December 15, 2010

Asian Investors Shop in Japan...

Regional Buyers Grab Properties That in Past Might Have Gone to Westerners


TOKYO—As property prices in Japan head down for the 19th consecutive year, a new breed of investor has taken up some space long dominated by Western institutions.

Flush with cash and unscathed by the credit crisis, Asian investors have stepped up their purchases of Japanese real estate over the past year. Compared with the astronomical prices in Hong Kong, Singapore and parts of China, valuations are lower—and returns are less volatile.

Asian firms and individuals have made 18 real-estate acquisitions in Japan this year, valued at $372 million, up from eight last year, according to Dealogic. That compares with U.S. buyers' three deals totaling $6 million and European buyers' one deal, Dealogic reports. (These numbers exclude deals involving private companies and funds.)

Some notable 2010 Asian purchases: the Hilton in Niseko Village, a popular ski resort in Japan's northernmost island of Hokkaido, was snapped up by YTL Corp., a Malaysian infrastructure conglomerate, for six billion yen ($72.3 million); three logistics facilities on the outskirts of Tokyo were purchased by Mapletree Logistics Trust, a Singapore-based real-estate investment trust, for 13 billion yen in July; and, according to people familiar with the matter, the Hyatt Regency Hakone Resort & Spa was bought by an unnamed private investor in Hong Kong in March.

Real-estate funds run by the likes ofMorgan Stanley,Deutsche BankAG and Goldman Sachs Group Inc. and private-equity firm Lone Star Funds did spectacularly well buying up distressed assets in the years after Japan's bubble burst 20 years ago, as the country's banks offloaded their nonperforming loans.

Prices even turned around in Tokyo in 2007; at that time, Morgan Stanley's property business was one of the firm's biggest revenue generators in Japan.

Now, many of the deals made during that Tokyo spike are dogging the U.S. investment bank as property values plummet and refinancing options remain scant.

Nationwide, according to a government survey, the average price for residential land fell 3.4% in the 12 months ended June, and the average for commercial land fell 4.6%. These overleveraged Western banks and funds have reined in their proprietary investments since the global credit crunch—and Asian investors have rushed to fill the void.

"Asian investors have not suffered that much during the down cycle, and they're not overleveraged," said Raymond Wong, executive director of Saizen Reit, a Singapore-based real-estate investment trust that manages 180 residential properties throughout Japan. "The yields in Japan are attractive by any standard, and the interest rates are so low. Asian investors are so flush with cash, they have no choice but to look at Japan."

"We are taking up some of the space that used to be dominated by Western capital," said Ben Cha, the chief executive of HKR Japan, who is busy flying back and forth between Tokyo and Hong Kong to set up the local offices ofHKR International Group, a Hong Kong-based real-estate development firm that is also a family-run business. "It's a trend that's going to be around for a while. We have capital to deploy."

Investors said that on residential properties in Tokyo, the yield—a property's annual expected net income as a percentage of its capital value—is 4.5% to 5%, compared with less than 3% in Hong Kong.

"The yields on residential assets in Japan is very stable—we have had a lot of highly volatile growth in China and Hong Kong," Mr. Cha said. "The relative pricing in Japan is attractive. There is a lot of volatility in the Chinese market and policy factors that no one can predict."

HKR this year bought three residential buildings in Japan for a total of nine billion yen, and Mr. Cha said the firm aims to significantly expand its Japan portfolio. Credit conditions in Japan, land of the near-zero interest rate, have started to ease as well: new lending by banks for real estate increased 6.6% in the July-September quarter compared with the same period last year, according to research by Deutsche Bank's real-estate fund, called RREEF.

Industry players said that although there are more Asian buyers, they still don't have the purchasing power to match the scale of the deals the Western institutions made before the collapse of Lehman Brothers.

In June 2007, the Morgan Stanley Real Estate Funds unit, known in the industry as Msref, completed the acquisition of 13 hotels and two property-management units known as ANA fromAll Nippon Airways Co. for 281.3 billion yen, $2.4 billion at the time—a record for a Japanese real-estate deal. But Asian investors tend to be longer-term buyers than Western funds, which typically focus on exiting from an investment in three to five years.

"I expect the trend to continue next year," said Michael Bowles, national director of Asia capital markets for Jones Lang LaSalle. "If you look at the dynamics of what's happening in the region, you're seeing rapid economic growth in China, a growing middle class with disposable wealth looking to diversify their assets. There is prestige in owning a good-quality residential asset in Tokyo."

Tuesday, December 14, 2010

Foreclosure prevention falling short, watchdog panel finds.../

WASHINGTON — A Treasury program aimed at preventing 3 million foreclosures is likely to fulfill less than a third of its goal, a congressional watchdog reported.

The Treasury's homeowner aid effort is "ineffective" and has failed to hold mortgage companies accountable, the Congressional Oversight Panel for the Troubled Asset Relief Program said in a report released Tuesday.

"The program has turned out to be a lot smaller and have a lot less impact on the housing market than we expected," said former senator Ted Kaufman, the chairman of the panel.

The Home Affordable Modification Program, or HAMP, pays lenders and servicers to rewrite loan terms for borrowers who can't make their current mortgage payments. Since its 2008 creation, HAMP's goal of preventing 3 million to 4 million foreclosures "has been repeatedly redefined and watered down," the panel said.

"If current trends hold, HAMP will prevent only 700,000 to 800,000 foreclosures," a small portion of the 8 million to 13 million foreclosures expected by 2012, said Kaufman, a Democrat from Delaware.

The Treasury will spend only about a fourth of the $50 billion it allocated for the program in 2009, according to the Congressional Budget Office.

"For this reason, Treasury's reluctance to acknowledge HAMP's shortcomings has had real consequences," the TARP panel found. "Absent a dramatic and unexpected increase in HAMP enrollment, many billions of dollars set aside for foreclosure mitigation may well be left unused. As a result, an untold number of borrowers may go without help."

Homeowners are dropping out of the program at a faster rate than they're joining it, the Treasury reported last month. The number of borrowers aided by HAMP grew to nearly 520,000 in October, up 23,750 from a month earlier, while 36,300 dropped out after failing to make their modified payments.

Timothy Massad, Treasury's acting assistant secretary for financial stability, called the report "somewhat unfair."

Massad said that while 500,000 homeowners have received permanent loan modifications under HAMP, the impact goes beyond those numbers because mortgage servicers have imitated HAMP with their own programs.

"We've set a new standard for the industry," Massad told reporters in a conference call. When " millions of modifications" by the industry are taken into account, "it is having a real impact on the ground," he said.

HAMP's premise is that lenders have an incentive to reduce a borrower's payments to prevent a foreclosure because they usually recover only a fraction of the value of a mortgage when they seize a home.

Through HAMP, "Treasury attempted to sweeten this deal by offering incentive payments to all parties to a mortgage loan modification," the panel reported. "Yet despite the apparent strength of HAMP's economic logic, the program has failed to help the vast majority of homeowners facing foreclosure."

Companies that manage mortgage loans can profit from foreclosure-related fees and are reluctant to participate in the Treasury program, the report found. In addition, many borrowers have second mortgages from lenders who might profit by blocking a loan modification. Pooling and servicing agreements that govern securitized mortgages might also limit servicers' ability to modify loans.

"Mortgages are, in practice, far more complicated than a one-to-one relationship between borrower and lender," the panel found.

Utah mortgage brokers in danger of losing licenses

December 13th, 2010 @ 4:34pm
By Jasen Lee

SALT LAKE CITY — The clock is ticking for thousands of Utah mortgage licensees who may lose their ability to do their jobs if they don't meet new federal standards by year's end.

According to the Utah Division of Real Estate, brokers must meet the federal Nationwide Mortgage Licensing System deadline for renewal and complete the required education and testing by Dec. 31.

Only 5,200 licensees had transitioned onto the NMLS database by the May 31 deadline. Of those licensees, only 2,000 have requested renewal and completed the necessary requirements, a news release stated.

The Division began 2010 with 9,027 mortgage licensees. Utah mortgage licensees who fail to request renewal through NMLS and meet requirements will have to re-apply for licensure by completing 20 Hours of NMLS pre-license education, 40 hours of Utah pre-license education, pass both NMLS Utah and NMLS national exams and reapply for license.

"Last spring we asked mortgage licensees to get on the NMLS federal system," said division director Deanna Sabey. "To date, around 50 percent of our licensees have complied with the first step but are still in danger of losing their license if they fail to renew their license and meet the NMLS requirements by the end of December."

She said the December 31 deadline affects mortgage loan originators, associate lending managers, branch lending managers, principal lending managers, mortgage entities and branches, among others.

Sabey said she is concerned that licensees are "forgetting this important step" and — beginning in January — will be very unhappy to learn they are no longer licensed to originate loans in Utah.

She also expressed anxiety about the potential for some mortgage brokers to conduct business illegally just to make money.

"My bigger concern is that people will continue to originate loans without a license and, therefore, violate the law," Sabey said. "We have given (licensees) ample opportunity to take the steps to renew their licenses, and if they don't do it, then the responsibility is on them."

She said that while the vast majority of brokers operate within the law, there are some who would do otherwise if they thought it was worthwhile financially.

"Their license has expired and they haven't taken the steps to renew, (but) they have the opportunity to originate a loan where they can make (thousands of) dollars and they've got bills to pay," Sabey said explained hypothetically. "They are put in that situation and all of a sudden it makes it a lot easier to justify and rationalize, doing (a) loan without a license."

Brokers found guilty of processing loans illegally in Utah would have their licenses rescinded permanently, she said.

"The way the federal (law) is set up, if they are revoked in Utah they cannot qualify for licensure in any other state," Sabey said.

All the more reason to complete the renewal process by the Dec. 31 deadline, she said.

Visit www.realestate.utah.gov for more information or contact the Utah Division of Real Estate at 801-530-6747.

Monday, December 13, 2010

Utah offers Overstock.com as much as $1.1 million to expand in Provo

Utah has offered online retailer Overstock.com an incentive worth as much as $1.1 million to expand its software-engineering department in Provo. That means 150 new workers would be added over the next 10 years.

The company immediately accepted the incentive offer, approved Thursday by the Governor’s Office of Economic Development board.

The money is payable over 10 years as a tax credit and is contingent upon the addition of as many as 150 full-time workers earning an average of more than $51,000 annually.

As part of the expansion, Overstock.com said it will open a new office in Provo and double the company’s software engineering staff.

TheCottonwood Heights-based company said 100 of the 150 new full time positions will be filled over the next year.

"The new jobs … will significantly add to Utah’s vibrant Software and IT [information technology] development industrial cluster, said Spencer Eccles, executive director of the Governor’s Office of Economic Development.

Overstock.com was founded in 1999 and employs about 1,500 people in the state

BYU ends hiring freeze, will fill jobs gradually

December 12th, 2010 @ 2:44pm
By Jamshid Ghazi Askar

PROVO — The freeze is dead — long live the thaw.

BYU confirmed Friday the lifting of a hiring freeze that had been in place for nearly two years.

"It was announced today at some meetings the president had with university leadership that the hiring freeze has been lifted," BYU spokeswoman Carri Jenkins said. "Although the hiring freeze has been lifted, it will be a gradual hiring process. … This is true for every department and every area on campus. Some positions will be able to open up quite quickly; others, the departments will need to take their time."

Jenkins added that the rescinding of the hiring freeze is applicable at all other higher-education institutions belonging to the LDS-affiliated Church Educational System.

In a letter sent Friday to BYU faculty, academic vice president John S. Tanner emphasized the need to hire the right people at a time when more vacancies exist than normal.

"We have instructed deans and chairs that we should not rush to fill every position," Tanner wrote. "We expect that it will take several years to find faculty prepared to meet our high expectations for continuing faculty status …

"At the same time, may I suggest that the thaw will be just as challenging in its way as was the freeze, and even more decisive for our future. The choices we make during the next few years will have a major impact on the quality of the university for many years to come."

Citing "the recent economic downturn," BYU announced a hiring freeze on Dec. 19, 2008, applicable to all positions except student employees and a select few auxiliary workers. During the hiring freeze, for example, BYU often hired short-term visiting faculty when continuing-faculty positions opened up.

Saturday, December 11, 2010

5 Predictions for 2011

Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:

1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings — known as the "seriously delinquent rate" — generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.

Source: Freddie Mac (12/09/2010)

Wednesday, December 8, 2010

Has Real Estate Been a Good Investment Over The Last Decade?

Forbes: Housing Had a Superb Decade

Posted: 08 Dec 2010 04:00 AM PST

Has real estate been a good investment over the last decade? Many people would be quick to answer ‘no’ to that question. However, they would be wrong. Real estate prices in this past decade have appreciated nicely despite the challenges over the last four years.

Forbes.com reported on this issue two days ago:

With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit: Housing had a superb decade.

According to Radar Logic, the value of a square foot of housing in the U.S. is up 58% from its January 2000 level. That represents an average annual gain of 4.3% in the value of one square foot of housing. According to the Case Shiller Pricing Index, home values are still up 34.9% over 2000 prices.

How did real estate compare to the stock market? Forbes answered this question:

The growth in average U.S. housing values looks pretty impressive compared with that of other assets, especially stocks. The S&P 500 is lower now than it was in January 2000. So is the Nasdaq. Even factoring in inflation, which ran between 2.5% and 3.5% for most of the decade, a home purchase really did produce wealth for anybody who opted to sell some stocks and buy at around the time the dot-com crash got rolling.

Bottom Line

Even in what many consider a sub-par decade for the housing industry, real estate proved to be an excellent investment.


Tuesday, December 7, 2010

Utah foreclosure sales down. Discounts, Not Such A Great Deal...

SALT LAKE CITY -- Foreclosure sales are declining in Utah. And, people shopping for foreclosed homes are seeing better deals nationally than here in Utah.

The RealtyTrac Third Quarter 2010 U.S. Foreclosure Sales Report says nationally foreclosures are selling for 32 percent less than properties not in foreclosure. That's up from a 29 percent discount this time last year.

In Utah, buyers are getting only about a 3 percent discount on foreclosures. Realtors are attributing the difference to high demand here.

"The RealtyTrac report confirms that there are fewer foreclosures in Salt Lake City and Utah compared to the rest of the nation," said Bill Heiner, president of the Salt Lake Board of Realtors. "With fewer homes for sale in the Salt Lake area, home prices are beginning to stabilize and even increase in some neighborhoods."

The number of foreclosures bought and sold in Utah is down 21 percent from this time last year. And foreclosed home sales plummeted 30 percent from the second quarter.

According to the report, the average sales price for a Utah foreclosure was $214,472 compared to $169,523 nationally.

The average sales price of properties not in foreclosure was $249,721, up 6.42 percent from the previous quarter and up 4.36 percent from the third quarter of 2009, the report states.

Story written with contributions from Jasen Lee