Recessions and Real Estate in Utah
by Teresa Larson, Village Real Estate, Murray, Utah
20+ years real estate experience
Oct. 20, 2014
A recent article in the Salt Lake Tribune Oct. 18, 2014 told about the great recessions in Utah. The article was referring to real estate. A recession of which we experienced prior to 2009. Some would argue we are still in, or recovering from depending on who you listen to. The article talks about how the state continues to struggle to bounce back. Utah’s job-growth rate is still at only about half its pre-recession peak and new construction is slow compared to prior recoveries. One thing the article didn’t mention is that the new home pricing for a single home in Utah is somewhat over the pricing that most first time buyers can afford. The term recession may be misunderstood by some we hear it a lot these days. We are in one, the threat of one the talk of recession is always there in some form. Let’s face it things are simply not simple these days.
The word recession sounds bad the Wikipedia definition says; in economics a recession is a business cycle contraction. The term great recession is used to describe a general economic decline. June 2009 was technically considered the end of the recession. That was the last time we saw two consecutive quarters of declining GDP. The recovery has been weak. American household wealth has plunged to levels not seen since 1992, with incomes dropping to 1996 levels when adjusted for inflation. These statistics are part of the reason that the last recession has been so hard to recover from. Home values didn’t start showing improvement until 2013.
Utahs Great Recession Slow Recovery
The Salt Lake Tribune Oct. 18, 2014 told about the great recessions in Utah. The article was referring to real estate. A recession of which we are still in, or recovering from depending on who you listen to. The article talks about how the state continues to struggle to bounce back. Utah’s job-growth rate is still at only about half its pre-recession peak. The article also shows the cycles of Utah’s real estate recessions.
The Salt Lake Tribune article is referring to a study done by the U.’s David Eccles School of Business. “What distinguishes this cycle from the others is the prolonged period of very sluggish levels of new construction and the timid recovery,” said study author and U. economist James Wood, whose research highlights the slowest homebuilding rebound of any recent downturn. Pain in the housing industry, the noted economist writes in a 25-page analysis released this week, “has diminished but not ended.”
Utah Shows More Improvements
Utah is doing better than many other states. The reality of our real estate market is that we are seeing some longer days on the market. Prices are up slightly. Many people would like to do something now in real estate but are not able to do anything in the current market because of the problems they suffered in the recent recession. The tightening of credit standards has made it more difficult. We are also seeing more people who would prefer to rent in the Millennial age group. Millennials’ that are holding back on home ownership are just helping someone else build their wealth. Some might argue the point about . A recent article dated Aug. 31, 2014 in the Salt Lake Tribune says Millennials’ are driving a boom in the downtown urban market.
Real Estate Agent and Housing Sold Numbers
It has been an interesting time for people in real estate related industries. In the height of the housing and financial crisis lenders and real estate agents as well as title companies dropped out of the business in big numbers. At one point there were only approx. 2000 members of the Salt Lake Board of Realtors. Today there are approx. 5900 members. When you look at sold volumes for residential properties you can see how there might be some stiff competition amongst the members. The first half of the year statistics showed slightly more than 8000 sold properties. For real estate industry professionals this is a pain! Housing pricing has improved but to only 87% of the original values. In a nut shell everyone has to work hard to reach the goal of home ownership and realize the benefits. Real estate industry people also have to work harder to find clients.
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Membership desk at the Salt Lake Board of Realtors Oct. 20, 2014
©Teresa O Larson PC, 2014