Don't believe this stuff, until our leaders in the state acknowledge this it's
true. I have read many stories that say our leaders say Utah is different than
the rest of the country and I trust them. When the governor says we may have
high foreclosures they it could be true, but until were told it don't listen to
this stuff.Just like with the recession looming, until I hear
President Bush say it's happening it's not true. If we just ignore
this stuff it won't happen, trust our leaders god be with them.
Well, it has all finally come home to roost. I have been warning about these
things coming for nearly two years. I had people tell me I was crazy. Numerous
articles were run quoting local economists saying that Utah was different for a
hundred different reasons.Utah isn't different, just late.Here we go.
I have a great and very safe job and I earn a great income (95K). I love to save
my money. I haven't bought a house yet because I feel that prices are too high.
I know I can afford one but why pay for something that will depreciate like a
car? I hope the housing bubble hits Utah hard. I know too many people that live
like they make a lot of money, and I know they don't. Utahns and Americans in
general need to learn how to save. The bursting housing bubble is a good thing.
The government needs to stay out and let the market fix itself and let grown
adults suffer the consiquences of their irresponsible spending habbits. I am a
responsible adult and I am paying the price right but not living a 95K
lifestyle. I will be rewarded for my thriftiness when I buy house at half the
current market value. Americans need to do learn to do the same.
Perhaps some type of federal regulation is needed to protect people from
mortgage brokers who stretch qualifications and fail to adequately inform their
clients of the negative potential of some of their loan vehicles.The
lack of oversight in this industry has created a mega problem for the nation.The cry of "Get the government off our backs and let business do the
business of business" is no longer heard as often and it is replaced with the
cry of "Some type of federal program is needed to bail out our economic
institutions."The effects of their own "laizze faire" policies have
come back to haunt them.
Thats only about 4 percent. If a couple of things happen in this years
legislature then I will be ready to leave this Lovely Rock for the mainland. You
have to buy within your means and even below it you house is vital and because
of Tax advantages you should buy instead of rent. I do not believe that people
went into adjustable rate loans with out knowing it and not thinking the rates
would adjust. I accepted (the buyer is the customer) a slightly higher fixed
rate just to avoid that. The Market can adjust do to supply and demand of both
buyer and the Banks willingness to loan. Thats why when I did buy I hired a
Shark (lady real estate agent) to represent me. She found me a nice house in a
less desirable area of the island. I live underneath an extent Volcano Cone. Its
been that way for millions of years and the people tell me, as long as the
Volcano on the Big Island continues to go off we are safe. When the Island came
out of the Sea, my part came out first. I think the problem was mostly Buyer
Buyer Greed and Bank willingness to loan to unqualified buyers. People wanting
more house then they can afford and adjustable rate mortgages. Being upside down
in a Car is okay and you kind of expect it, just hold on to the vehicle, pay it
off. Then Bank for 3 years what would be the Vehicle Payment. Then Pay Cash for
the next one, and from then on. Being upside down in a House is a vastly
different story. Some people are going to have to either double up, or move back
in with their parents. Back to the Silent Scream Days. I feel badly for them but
they made their choices. Some will pay for their homes with their Tithe Money,
which will open up a whole set of other problems. 2nd Jobs really kill families
and the 2nd job money almost always gets tied up in paying increased debt. When
the 1st dollar from job 2, gets spent on something other then what it was
planned for the 2nd job holder needs to quit. Its a fast and down hill slope.
More Education always equals a better job. You never get the close times that
are lost back.
This whole mess is a direct result of policies and attitudes started under
Reagan. The idea that all government is bad has caused the decline of
responsible oversight by our federal government. We see it in energy planning,
immigration, healthcare, and even foreign policy. Bush has exemplified this
irresponsible trend with this bungling of Katrina, Iraq etc., it is hard to lead
a federal system if you think that government is the problem.
But those consumers should have taken the time to read what they were signing.
I was always taught if it is too good to be true, it probably is. The same goes
for a person who is purchasing a $300K or more home with a monthly payment of
only $1000. It's impossible! The consumer should have done the math and
realized it wasn't true. Same thing as a car. People buy cars based on
payment. Some neglect to realized the payments are low because they are
stretched out over 7 years.They made their beds now they can sleep
in it. The government doesn't have to govern us in all aspects of our lives.
We should all be grown ups.
I am so happy for you, you've had the opportunity to save and jumped on it. You
are also holding out to buy a house, good for you.... However, you are pretty
dang rude to HOPE the housing bubble hits Utah hard. How sad. My guess is,
even though you make a good living you don't have many friends, with an attitude
like yours who would even want to be around you.What comes around goes
around, maybe your job isn't so safe buddy.
SINCE THE PROBLEM WAS CREATED BY THE MORTGAGE COMPANIES WHICH INVENTED THE
VARIABLE RATE PRODUCT, THEY SH9UD BE FORCED TO FIX THE PROBLEM BY ALLOWING THE
VARIABLE RATE TO BE CHANGED TO A FIXED RATE FREE OF ANY CHARGE. THIS WOULD ALLOW
PAYMENTS TO BE STEADY WITHOUT INCREASE. THE NEW RATE WOULD HAVE TO BE GOVERNED
BY AN INDEPENDENT, EQUITABLE JUDGE WHO IS WELL QUALIFIED TO MAKE THE
DECISION.I BELIEVE THAT THERE WAS AN ELEMENT OF GREED IN THE DEVEKLOPMENT
OF THIS PRODUCT AND THOSE WHO FOISTED IT ON THE GENERAL PUBLIC SHOUOLD PAY THE
Dave,I won't believe there is a problem with just Guv Huntsman saying
there really is a problem. I need Jeff Thredgold to say there is a problem. Only
then will I believe it.
dream on, a house at half the price? keep saving your money you will need it to
pay your ever increasing rental rates. these foreclosed properties can be
occupied by our increasing population they refer to it as immigration i have a
house down the street with about 7 immigration occupants in it. they can split
the rent, cheap housing.
There was already a mechanism in place, and it failed. We allowed the Federal
Reserve to take over our monetary system. They were supposed to control
inflation by regulating the flow of money. They supplied the cheap money that
caused this boom and its eventual bust. They alone are to blame. Get rid of
the Federal Reserve and quit using fiat money.Problem solved.
Prices have been dropping in St. George for over a year now. I'm still holding
out here because mortgage payments vs. income and mortgage payments vs. rent
ratios are still far above historic norms for St. George. Salt Lake's boom was
just a little bit later than ours, and it's bust will follow too.We've also been saving money and have a high household income and can afford a
house, but simply won't throw our money away on such a rapidly depreciating
asset. It's also unwise to leverage your money on something that won't
appreciate in value.
You'd better pray the job you now have and your nest eggs of savings are still
there when you need them.I have seen people in your situation: good
job, living wisely lose it all in a heartbeat...No fault of their own...Don't think you are beyond something catastrophic happening to you. I hope the housing situation wakes people up, but I don't hope they lose
their homes, that is cruel. I saw a bumber sticker yesterday that
said,LIVE SIMPLY SO OTHERS MAY SIMPLY LIVE!!!!!We all
need to do that!!!!!!!!!!!!!!!
Dave:What planet are you living on? Do you watch the markets? Have
you seen government statistics? Are you dreaming?It's about time the
market there corrected. Irrational borrowers and their liar loans should be
punished. Let the markets work. Why should I help subsidize the bailout of
people making poor decisions. Let the markets work. If you were smart and didn't
overpay, good for you. If you got in over your head, tough luck.
One of the things that's struck me in the several years I've been in Utah is the
importance of status. I've seen so many people buy houses far larger and
fancier than their needs: more importantly, too large for their budgets.
Combine that with the expensive cars in the carports, the boat and the vacation
cabin, it's not surprising that the chickens eventually come home to roost.I don't know why it's so important to be seen as rich, when personal
finances don't support it. I hate to see my own property value go down as a
result, but it's hard to feel sorry for people whose vanity got the better of
Most people mistakenly think the Great Depression just happened overnight.They also forget that is the time when millionaires were being made by
the sackful while the rest of us little people were either just getting by or
starving.Start telling your children and grandchildren that the best
things in life are free and that they really don't need that Lamborghini.
Don't blame the banks and don't blame the government.People were
greedy.If a deal seems to good to be true it probably isn't.All hogs end up at the slaughter house eventually.LIVE
WITHIN YOUR MEANSGET OUT OF DEBT
Those picking on "Holding Out" must have missed the part about him saving money.
He's right about getting a house for half off. And he nor I wants the economy to
crash. We just know that it will. A country's economy can't be floated on
massive debt forever.
Tony,Pssst Pssst,Dave was being SARCASTIC, as was I.(As
Nobody put a gun to anybody's head and forced them to borrow more than they
could pay back. Buyer be ware!!!! Consumers need to READ THE CONTRACT. We are
all big boys and girls. This can't be laid only at the door of the lenders.
There were plenty of greedy borrowers, living well beyond their means out there.
With that said, however, I have to put the blame at 55% lenders and 45%
borrowers because (for reasons I do not understand) people think that when they
qualify for a loan they think it means it is financially prudent to accept the
loan. They believe that loan officers are financial advisors. NO THEY ARE NOT.
They are salesman. They do not care if you have money left over to save for
retirement, go on vacation, or send your kids to college. Bottom line: Economic
illiteracy is killing us. People have to stop living beyond their means. Too
many believe they are "entitled" to live in a $400,000 house on a $40,000
income. Simply amazing.
I'm sick of hearing how this entire mess is the "Mortgage Companies Fault!" Its
the fault of the American public! Nobody held a knife to the throats of
individuals that took out subprime mortgages. They new the risks. Its not the
mortgage company's fault that these individuals are financially ignorant. Its
simple: Do not get something you cannot afford! Oh wait...we live in Utah -
where the next family is always trying to keep up with the "Joness". ITS OUR OWN
FAULT! AND NOW YOU WANT THE GOVERNMENT TO BAIL YOU OUT?? YEAH RIGHT!
To "Holding Out" EXACTLY! DITTO! But the government will prop
up the market and delay the correction. They need to let the foreclosures
come. Let the market shake out, and let the prices come down. It will be OK.
Then I'll buy. Then liquidity will return to the market. Some
will get burned. But it's the marginal, speculating home buyer got us to this
untenable situation. Let them foreclose, have bad credit, have to rent.
Those risk-ignorant buyers of mortgage-backed securities, and so-called
predatory lenders have suffered already. This is right. This is what should
happen. Don't need regulation. Just let nature take its course.
Utah usually runs behind the times on things like the economy. Just as the
economic boom was fueled by construction, the coming hard and deep recession in
Utah will fall with construction. New homes permit down 75% to the lowest level
since 1990. No more equity for people to take out of their homes to pay those
debts and then go back into it. So with construction drying up,
where are the jobs going to go? What about all those workers who have
construction jobs or businesses related to construction who are now facing
economic hard times? They will be hit first and will be hit hard. In 2006 out of
54000 new jobs, 14000 were in construction or 26% of the total new jobs were
construction. Well, if we lose 20% of our jobs to 25% that is going to hurt.
What about extra spending money? No more eating out (or less of all of this) and
that also means keeping older cars longer, no thrill spending. Things are going
to cycle back to being rough, but a year or so after the national economy
revives so will we. Maybe after the national election.
I laugh out loud when I see people blaming the mortgage companies--WHATEVER!
You are the one who signed on the loan...knowing full-well that if even the
slightest thing went wrong you couldn't make the payment. Well, I'm with
Holding Out--I've already bought a condo and a home and I'm planning to own a
bunch of real estate before it goes up again.
The previous couple of comments are right on. Around here image is everything,
and if it all has to be faked so be it. Overextend on your house, then tear
every bit of equity out of it to buy the 1 ton pickup to get groceries, and a
boat to drag around the desert behind it. Who knew such stupidity and blatant
greed would come back on us?
I was surprised that Greenspan allowed this to happen. A couple weeks ago, USA
Today printed a article, on the country of Sweden, which got themselves into the
same exact problem, that the US economy is in. As he knew of what happened
there, could he not think of way to prevent it from happening here?
The ride up was a thrill and drop will be tough. Who could be surprised? We
seem to think, rather consistently, that this will never happen again or to us.
You know, i bought my house in Davis County about a year ago and I estimate I am
already upside down. Luckily we can comfortably afford the house, but we are
down somewhere around 10%-15%.I expected this having come from
California and watched what happened there. Of course everyone here kept saying
"this won't happen in Utah cause our economy is different." The funny thing was
that I heard every single one of these excuses in California before the housing
market crashed.The fact of the matter is that the market needs to
correct. If we allow the government to try to fix it, we will just end up with
more problems down the road. The whole cause of the over inflated housing
market was a direct result of trying to stop a market correction (recession)
when Bush was first in office. Now we are facing the same recession but being
caused by different areas. If the government attempts to stop this one, then we
will just be faced with another down the road. Sometimes the markets just need
to work themselves out without the government stepping in the "fix" everything.
My wife and I for Christmas purchased 3,300 lbs of white wheat at $10 per 50
lbs. Today it is worth $30 per 50 lbs. Is there anyone else who has tripled
their investment in the last 5 months? My dad taught me that it is
real hard to eat money.
I and thousands of others are just waiting for the dam break. Looking for a
good deal in Utah. Can't wait, but will.
It doesn't matter what the government does or what mortgage companies
offered...when you buy a house you still have to sign on the dotted line. If you
didn't know what you were signing, that's YOUR fault. Too many people jumped at
a chance to buy a house they couldn't really afford in the first place.
"Interest only loans" and "variable rates" are cheap at first, then the price
goes up - that's how they WORK. There is no trickery, no government scams - just
people trying to get more than they could really afford and now they're dealing
with the consequences.
Holdin Out - Definitely has it right. Too many people live beyond their means to
"have it all" right now, and can't see beyon the end of their nose. How can you
not think there is something wrong about living a $100K lifestyle on a $75K
income. The moment you hit a bump in the road (and it is not a matter of "if",
but "when") such as losing a job, someone gets sick, divorce, etc. etc. realty
hits in a big way. It is a sad thing, but adults need to act like adults and not
try to blame the economy, the government, the banks, or anyone else for their
decisions to expose themselves to greater risk than necessary. People in Utah,
and America in general need to wake up and make better financial decisions about
how and where they spend their money. People need to start thinking "long-term"
and make a "life-style" adjustment. The economy won't change until attitudes
Shame on us for not reading our loan terms more thoroughly before signing.
There was never a time that I doubted or was discouraged by my 30 year FIXED
rate of 5.5%...plus I didn't try to buy more than I could/should afford, even
though I could have qualified for a much much higher (double) what I ended up
buying. Shame on the consumer for not informing himself; there's no way I
should put that responsibility on anyone or anything else. Government oversight
cannot replace the consumer's common sense!!! Immoral loan brokers need to be
handled, but I'm guessing that the majority of people just walked in and told
the broker what they wanted, and got it, and now the masses have to deal with
the fallout.Also, I'm not moaning about a decline in the market,
there's no way prices will drop back to where they were when I bought 5 years
ago. I can handle a 10%-20% drop in home prices since my value is currently
100% better than purchase price.
Amen to everything you said. It's tough convincing my son why that 1995 Ford
Explorer with over 200,000 miles is still sufficient for my needs. It runs
great and has never left me stranded. Aside from the expected repairs it was
paid for several years ago. Last month when the starter quit I bought a new one
at Schucks for $129.00 and put it in myself. My son said, for the umpteenth
time, "I can't believe you keep spending money to fix that thing. Why don't you
just go buy a new one?"Son, think about it...$129.00 every six or so
months for repairs or $500.00+ EVERY MONTH for payments. No rocket science
degree required here!I'm feeling pretty comfortable in our modest
house with a fixed rate mortgage and only 7 years left to pay too!Bigger and newer does not always equal better!
The Great DepressionThe Great Depression Part IICapitalism at its finest.
This report is a joke. Look at the source and credentials of the author. What
credence can be given to a "manager" of Health and Human services with Pew
Charitable Trust? I personally think that a lot of the current problem is due
to the insatiable thirst by the media for "gloom and doom" headlines and
stories. If the same stories are broadcast over and over, no matter how
unreliable the sources, the public starts to believe them and they turn into a
self fulfilling prophecy. You can see this in some of the comments here like
the person who is eagerly anticipating a 50% decline in home values. Having a
foreclosure in your neighborhood doesn't necessarily mean that anything will
happen to your house value. Foreclosure sales are generally not even accepted
as comparables when other homes in the area are valued. The loss of income due
to higher income taxes from renting and the risk of waiting and missing the
"upturn" in the market may well outweigh the benefit of possible lower prices in
To all those who don't get sarcasm:The first post is funny!Also, recessions are necessary for future growth. And when investors
take risk (too large a home, variable interest loans, etc) then some are going
to suffer. That's why they call it risk. Government should avoid any
intervention. Let the recession happen and get over with, and then we can start
another growth cycle. It is not possible to have uninterrupted growth.
Of course prices are going to drop. They're over-inflated. And they NEED to drop
in order to be in line with the purchasing power of the average Utahn. If they
don't drop, then the next generation of home buyers won't be able to buy. And
for those of us who do own, a historically distorted amount of income goes to
paying our mortgage (and lining the pockets of investment bankers in NYC),
preventing us from purchasing the normal Utah goods and services that keep our
economy hummin. Simple economics, folks. Anyone who thinks housing prices
should be supported in the stratosphere should email me. I have some great $5
stock left over from the dot-com bubble that I'd be more than happy to sell you
at the $200 per share that it once (stupidly) was. (I own two houses, by the
way, so I'm getting hit with the rest.)
My little family has been "house free" for all but 3 years when we owned a
little condo. We've lived with family for 5 years trying to make it on one
income. It's just not going to pan out. Some were cut out to understand and play
the job market. Others really struggle because the game goes against their
nature. That second income is going to have to be added in the next few years.
Still, I'm optimistic that everyone who lives wisely will feel less pain than
those who overextended themselves as our debt-reliant economy caves. Say "so
long" to the comfy life and "hello" to the simple life.
Americans are too spoiled. Americans are completely narcissistic. This is good,
it needs to happen.The keeping up with the Jones mentallity will cripple
I really don't care what the governor has to say about all this. I really am
waiting to hear what "Super Dell" will say. He is a man who we all can trust,
and he will certainly fix this whole foreclosure mess. If anyone can do it,
"Super Dell" sure can!
Jay, Greenspan didn't allow it to happen, he MADE it happen. Remember when he
and the rest of the Fed took the interest rate down to 1%? Borrowing was so
easy and plentiful that it drove the real estate market up sooooooooooooooo
predictably. Now Bernanke is following in his footsteps by bring the rates back
down again. All he's doing is throwing gasoline on the fire. It's going to a
big fire sale on real estate!
I remember when someone came to my house and tried to push one of these loans on
me. Luckily I didn't. This hurts the banks as well as the person who
borrowed. Neighbor will see their property decrease in value as well. The
borrower and the bank both had a part in making this mess, yet the bank gets
bailed out by the government...I mean you an I get to pay for it. The government
needs to stay out of it and let the pieces fall where they may. I didn't do it
and I don't want to pay for it.
Am wondering what do you do when 2 years ago you qualified for a loan, bought
the house, and have paid payments perfectly on time... but now you want to
refinance the same house, and because of stricter recommendations from the Feds,
you cannot qualify for your own house that you currently live in, and have paid
I make 110k per year, have owned my humble 1500 sqft home for over 10 years now.
I still drive a 1989 vehicle. I watched the housing boom with dismay and avoided
it at all costs. It was too expensive 10 years ago after the boom in the 90's,
let alone the cartoonish levels its at now. My job is at just as much of risk as
anybody else's and I know that my savings won't keep me alive for too long. The
very real possibility that I may lose everything due to the carelessness of
others ticks me off beyond words. This country is at the pinnacle of pigginess
(just made that up) and laziness. Its beyond disgusting. Everybody wants
everything right now. Have you noticed that it affects our lack of civility with
each other as well? And even though I try to do otherwise, I don't leave myself
out of that statement. If every nation consumed like we do, the world would look
like the moon in just a handful of years.
Jay--Greenspan allowed this to happen?? What about all the people who didn't
bother to find out what they were getting into when they got their mortgage(s)?
These days it's all about a lack of responsibility. Apparently, you and many
people think that babies took out those mortgages because they couldn't think
for themselves. Oh, those big, bad mortgage companies! Oh, brother. People need
to grow up and take responsibility for their choices, and not blame the outcome
on others. Maybe if people around here actually lived within their means, things
like this wouldn't happen. I am one Utahn for whom these "horrible" foreclosures
are beneficial, because I'll be looking to buy a house. Thanks to you, all you
In order for the 4% foreclosure rate to have any meaning we need to know what
the average foreclosure rate has been in past housing slumps and during good
What a despicable joke this whole mess is! Why do you think we
receive several credit card applications every week (or day) and endless
advertising about using the equity in homes? Why do you think the easy credit
scam has been going on forever and will continue into the future? It's all about money and people either understand and benefit from the
principle of credit, or they become slaves to it. It's about that simple. And, some of us have been warned, and warned, and warned for decades no
less. Yet, we have had as many problems with money, bankruptcy, etc., as any
state or group of people. My theory is its a misunderstanding of a
theme several of us are familiar with -- "if ye keep my commandments, ye will
prosper."It's just that we haven't understood that "prosper" means
enough resources to have full stomachs and clothing and a dry and warm place to
sleep at night and opportunities for education, for example. Instead we think
"prosper" means fancy vacations, boats, snowmobiles, big trucks and lots of
other big-boy toys.Heaven help us when all of the "give" has been
squeezed out of national and world markets.
It's not Greenspan's fault. As people have already pointed out here, our own
greed (read "House Flippers") got us into this mess and has caused the problem.
In creating artificial demand by buying multiple homes with minimum down, the
inevitable price ceiling was hit and people stopped buying. Those who did buy
before the ceiling was reached now have a home that is worth less than their
loan balance and will have to live with the result. And the flippers stuck with
multiple homes will lose everything they gambled for. The same thing happened in
1929 with the stock market. Greed will always get you in the end.
It's all about personal responsibility and people's increasing desire to not
take any. Too much credit card debt - file for bankruptcy and make
it the bank's problem. Too much house - default and make it the lender's
problem. Bad mortgage - cry and make it the federal government's problem. If you
make dumb decisions, you need to face the consequences. How is anyone supposed
to learn from their mistake if they are bailed out every time they make one?
Political leaders spending time trying to figure out ways to spare these people
the pain from the problems they've created themselves seems futile. The best
service they could provide is staying out of the way, letting the situation
unfold and focusing on controls that could be put in place to keep this from
For the last half dozen years or so, I have been wondering how people could
afford the monster houses going up along the Wellsvilles and across the east
side of Cache Valley. I now have my answer: They can't.
The Government, Alan Greenspan & the Federal Reserve (which, by the way, is not
a Government entity) has caused more problems than it has fixed ... and now we
have irresponsible people, running around trying to blame anyone, but
themselves, for their problems.The Government will cause more problems by
trying to fix it & we will loose more freedoms & elected politicians will get
bigger "We are smarter than you!" egos!"Those who have caused the problems
are the last ones to look for to solve the problems!"Government needs to
get out of the way & let those who "win" - win, & those who "loose" - loose.
Quit trying to punish those who "win" by taking it away & redistributing it to
those who "loose".Cutting up a 1st place trophy & giving it to all
participants does not make everyone a winner, it just makes more participants
that don't want to put out a full effort anymore, since they will be getting a
piece of 1st place.AIMHO
Sooner or later people return to basics.(The smarter ones anyway)Less is more will come to be known as the only way.(for those paying
attention)Then people will once again embrace each other regardless
of religious affiliation.
The most frightening posts on this story are the ones that say government
oversight is the answer to this problem. What we are seeing is capitalism at
work--borrowers and lenders made bad decisions, and it's time for those who made
poor decisions to suffer the consequences. Further government oversight will
only hamper growth. Allow the market correction to occu and the market will
weather the recession and grow again. Increase government oversight and the
market will suffer long-term.
A home foreclosure in most instances is the sole responsibility of the borrower.
When I purchased my home, I signed the papers, I had a chance to review them, I
understood how my mortgage worked, what the payments would be. Lenders offered
products that consumers wanted and some consumers burned themselves by taking
them. Everyone who gets a mortgage is an adult and should take PERSONAL
RESPONSIBILITY for how they handle their finances. This is not government (i.e.
the taxpapers) responsibilty. I didn't overextend myself on my mortgage and I
should not have my taxes go towards cleaning up another's messed up mortgage.
Maybe he was, maybe not. With a 60+ percent rate of "extremely obedient"
red-lettered sheep in this state, it's hard to tell sarcasm from mind-numbed
We will bail out the bilionaires who profited from the securitization of
mortgaes. We won't bail out the homeowners, that would be socialism.
What the press doesn't report is that the banks are causing much of the problem.
They have received hundrends of $Billions in low interest Fed loans; but they
are sitting on the money and refusing to fund loans. They are waiting for
interest to rise at which time they will make a fortune on the spread. How do I
know? We are builders. We don't have a single sub prime loan yet many of our
clients face foreclosure because banks won't' fund completion loans. Ask any
realtor you know. They'll tell you that loans over $400K sit un-funded even
though the Fed has funneled $Billions into the banking system.
There has been little to no regulation of mortgage brokers, they are outside the
state and federal bank regulations. Many are crooked, most (hopefully) are not.
Hopefully, meaningful regulation of mortgage brokers will come out of this
mess, but nothing else. Some people are fools, most (hopefully) are not. That
being said, NO BAILOUTS!!
Real Wealth you would have to sell your wheat to triple your money and then
what? Wheat is not an investment but if it makes you feel good so be it.For those of you who are saving your money I hope you are saving it in a
non-US currency because if you are saving it in US dollars its value is falling
faster then RE values.Read some books people it is never as simple
as you think it is and so far there is no time travel so no one knows what will
happen in the future.
While Utah housing prices haven't hit a bottom, home prices in the West are a
mixed bag of complications. I agree that Utah will be hit further by price
depreciation but not as bad as areas that have experienced extremely high house
appreciation in recent years such as California and Nevada (The higher you go,
the harder you fall). Utah housing appreciation was more modest (with the
exception of St. George), so depreciation won't be as severe. Secondly, there
are other forces that will pressure house prices upwards. They are high
inflation and high energy prices. Construction costs are not getting any
cheaper, so once the financial mess abates, I expect a return to modest price
appreciations along the Wasatch front. Another source of higher housing
appreciation in the West and particularly Utah is the lack of private land.
Most of Utah's land is federally owned, which makes the limited amount of land
available for homes along the Wasatch quite scarce. They are not making any more
land. However, Holding Out is smart to wait, but he/she might hold out for so
long, that the bottom of the market could come and go before realized.
I agree with HOLDING OUT!! Not cruel. Just stating what a dumb thing greedy
people got themselves into, not reading and understanding the playing rules. I
am glad to see housing take a hit, and come back down to reasonable levels. Now
if folks will just learn from what is going on and not repeat it in the future.
"This report is a joke"...you're the joke, this market is blowing up like
everyplace else but worse...when you comebine low incomes with the biggest
houses in the country it spells disaster...you're the joke pal....deal with
reality...AND YES....FORECLOSURES do count as comps.
UH...yes, your property can drop to where it was 5 yrs ago...it can happen real
easy...because it was overpriced when you bought it 5 years ago...look at
Shillers chart...we can easily go back to the mean.
If we think it will happen
I am totally agreeing 'holding out'. And yes, things will be fine if left
alone. Lowering interest rates further only delays the inevitable. To those that think it is impossible for house values to plummet SO far, you
need to look at the rest of the country.And whoever said it was Alan
Greenspans fault is...well, not very smart. First off, before he stepped down
from office (that's right he is no longer in charge of the federal reserve), he
spoke quite a bit about the housing bubble. He warned everyone that it would
burst. Not his fault that most of the country didn't listen. Oh
and both the lender and the borrower are to blame. The lender because they lent
out too much money to people who don't realistically have the means to pay it
back. The borrower because they didn't do the math and realize that they were
Is it the consumer who purchased more house then they could afford or is it the
mortgage companies who pumped the ARM loans and told the consumer that they
could refi in a couple of years when the value of the home would allow them to
get a better long term rate or is it the banks who allowed the consumer to
borrow money on stated income with nothing down and bundled those loans together
and sold them off to pension and hedge funds?
America is a capitalistic nation. It's survival of the fittest, aka the greedy.
That's how it is. If you can't compete, get out of the way. There is no time for
compassion, sympathy, understanding, or helping. There's only time for getting
what I want, when I want it, how I want it........right now. It's all about me,
me, me. No genuine spirituality.....just the kind you see selling on
TV......religions selling themselves through TV ads and TV preachers. Religious
greed to get more converts to get more money and power. A nation who's laws,
politics, and policies are bought and paid for by big business. That's what
America has become. A superficial, greedy, arrogant, belligerant nation with no
soul. It's disgusting.
There's a lesson to be learned in all of this. Teach it to your children:When I was newly married and in college, my wife and I lived in a
one-room apartment (not one bedroom, one ROOM) for $200 a month. After we
graduated we looked forward to buying our first home. We decided to wait until
we had enough money to put 50% down.It took us two years - we were
making almost $100k at the time. Do you know how hard it is to voluntarily stay
in that situation when you're making that kind of money? Several times we asked
ourselves "what are we doing here?"But we stuck with it, bought our
house, and thanks to our patience and sacrifice we're in a great situation
today.Teach your kids that a little sacrifice now will pay huge
dividends later. And teach them to be patient - you can't have everything you
want right away.
Home prices in Utah have not yet dropped a significant amount. I suggest that
anyone that has a "subprime mortgage" refinance now. Oh, you say they don't
have any equity in the house since it was financed at a 100%? In that case the
owner is no different than a renter and has nothing to lose financially
speaking, and will be be much like the renter who doesn't pay the rent. Why
should the taxpayers have to pay for their gambling loses? And that is exactly
what this is.
Over priced homes hurt everyone - the market needs to drop. If my home goes up
in price it is paper money unless I sell. Meanwhile my property taxes go sky
high - just ask the folks in Davis County and Ogden Valley. Plus now my kids
have to pay more for a home. Do the math - My home goes up say $100K, now each
of my kids has to also pay $100 K more so... in the end as a family we are much
worse off. I would rather keep my home priced reasonably than see the
consequences with property taxes and my children being unable to afford a home.
You are never going to hear any governmental person say, "It looks like the
economy is going down the drain. If I were you, I'd start saving my money."If they did, there would be a run on the banks like you and I have never
Utah leads the nation in supersized homes. First and second time home buyers
think they have to go for the 6,000 square foot dream house. The monster homes
are fake like the people. The primary facade gives the illusion of a manor or
estate with ornate brick and stone work, banding around the windows, shutters on
the windows, beautiful wood front doors, with a professionally landscaped front
yard. The his and hers SUV's in the driveway. The secondary facades are one of
three colors of tan stucco used in the subdivision with no architectural
interest at all. the tiny windows look randomly placed on the spacious plain
walls. The landscape has one tree and one bush and the patio set is white
plastic from wal-mart. What ever happened to kids sharing a room; I am college
educated and have a good job. I live in a 1947, 200 square foot home I can
afford and am paying my fast offerings to help pay Barbie and Kens mortage when
they going crying to bishop that they will lose their vinyl castle on the
westside of town.
You can thank the neocons for the mess we're in.I didn't vote for
them.The administration we have today doesn't give a (blank) about
you and me.
To Anonymous 7:57: this is not a phenomenon of capitalism. This is totally a
result of government intervention in the market. IF the Federal Reserve (I
know, I know, it's not a government agency, but it's empowered by the
government) had not inflated the market with fiat dollars, IF Congress had not
given artificial incentives to home buyers, IF regulators had not allowed the
creation of sub-prime financing, etc., etc., the "greedy capitalists" wouldn't
have had the tools to manipulate the market into this catastrophe. You're never
going to rid the world of greed, but you can keep them from tools to ply their
Matt 9:10 is right. We should allow the market to set itself right soon rather
than postponing the inevitable for later. If we don't make that choice now, it
will be made for us later.
Yes, greed and recklessness on the part of buyers are the ultimate causes of the
meltdown. But none of this would have been possible were it not for the
existence of the Federal Reserve and the concept of fiat money, along with the
dangerous practice of fractional banking.
First, the consumers are at fault for making bad decisions and getting loans
that clearly in the long term they could not afford.Second, you can
not absolve banks and mortagage companies from responsiblity because they made
lots of money offering loans that they were well aware were ticking time bombs
should the economy change. They wanted to make money with no regard for
longterm issues.Third, we do need to allow the market to adjust.
Homeowners will suffer and sometimes a lesson learned the hard way is the best
way not to repeat it in the future. If they are bailed out then nothing will be
learned.Fourth, banks and mortgage companies should now be forced
into more regulation since they have shown they can't regulate themselves since
making money is more important than helping people make good decisions.
Greenspan may not be directly responsible, but the huge inflow of money (via
reduced rates and increases in the money supply) has led to a cheap dollar (low
interest rates) -- Greenspan has some responsibility to this huge fiasco (and
more importantly, the horrible position of the dollar worldwide). People getting into houses they can't afford and lenders not doing due
diligence on the borrowers are also culpable in this mess. The markets really
need to sort themselves out w/o gov't intervention. The more gov't gets
involved, the longer it will take for any correction to run its course. SLC and
surrounding areas were slow on the uptick and will be behind on the downside,
but I believe it is coming. Denver has already started its slide. The coastal
areas are even in worse situation (except San Diego, which has started to see a
bottoming in the housing plunge). Not sure how far it will go, but it will fall
more. BTW, as noted, the Fed is not a gov't institution. It's a
privately held central bank. There is some gov't oversight, but no direct gov't
control. Seems a bit extra-constitutional to me.
That's 1 out of 25 homeowners... who have bought homes extending back over a
period of 40 years! That minimalizes the statistic a a ridiculously silly level
and doesn't convey the actual gravity of the pending crisis.Now,
take the last 10 years of mortgages done in Utah, with a Lion's share being
sub-prime, and not add the mortgages done the prior years and we get a more
accurate reading of the situation.Taking that approach and we can
assume that the figure is more like 1 out of 4 or 5 of the last 10 years
mortgages being foreclosed on. That's a disaster of huge proportions! While the borrowers themselves will carry the brunt of the crisis, being
blamed for overextending themselves, let's remember that the banks and mortgage
lenders also could have said, "Sorry, but the home you're attempting to buy is
actually out of your long-term debt-to-income ratio." The banks/mortgage
lenders are equally responsible because they turned a traditionally conservative
segment of the economy into a highly speculative 'paper wealth' driven market
scheme, when it should have stayed a 'collateral' driven endeavor. Yes! The lending institutions should take a hit/fall as hurtful as the
borrowers are taking!
Houses are to live in. Homeowners need to pay their mortages off, period. Only
then does the house become a home. Only then does the house become a real asset.
The present generation seems to have forgotten about that and many will end up
having to start over the right way. Pay off your mortgages folks or your
retirement will be tough.
I hope the bank doesn't foreclose on my house. I hope I can somehow
pay off the crushing burden of my student loans someday. I hope my
job doesn't get shipped overseas. I hope I don't get stop-lossed
again. I hope the war is over by the time my son is grown. I hope I don't lose my health insurance. I hope reckless
investment bankers haven't destroyed our entire economy. I hope I
can afford to heat my home next winter. I hope we can make it
through the next seven months of the Bush Administration.
I think there is a fine line here...I am a believer in free market
economics, I believe the "American Dream" is founded on free market
principles.That being said, history has shown that the market CANNOT
be trusted to regulate or police itself. I DO NOT support the
govornment giving handouts to try and stop a recession or bailing out companies
that egaged in poor buisness paractices.I ABSOLUTELY support
govornment regulation of buisness and industry. For those of you
who say "they should have known better". I think that is a very cold way of
viewing this situation. Often times the loans that people where being given
where being sold to them like a used car, and the mortgage brokers were
intentionally deceiving and preying on people they knew could not afford the
product they where selling. If America can avoid the socialist
response of free handouts and enact some good legislation regulating the
financial industry I think this can be a good thing. It's a good reality check
and may help some people to realize that their home equity is not a disposable
source of income. Unfortunately, I think that may be asking too much.
IT IS TO BAD. BUT THE MORTGAGE BROKERS GOT THEIR COMMISSION AND DID NOT DO THE
BUYERS ANY GOOD. THE BANKS GOT THEIR COMMISSION AND ALSO DID NOT DO THE BUYERS
ANY GOOD. I THINK THE BANKS AND THE MORTGAGE BROKERS SHOULD GIVE THEIR
COMMISSION BANK AND PUT AWAY.
amazing the ignorance that persists on this topic. The ARM was created as a
result of the savings and loan crash - with a hope that they would not get
burned lending money out at a lower rate than what they were bringing in.
However to say that the mortgage brokers or lending institutions are responsible
is childish. The consumer is able to read -- able to comprehend that the rate
will increase - but greed trumps logic and the loan is secured. The government
bail out is a terrible decision. The FED should have left Bear Stearns to their
fate as they did the 190+ other lenders who failed due to greed. Everyone
getting foreclosed on should be left to their own devices as well. Short sales
should be promoted to prevent foreclosure and mitigate loss for the banks while
there is still a sense of inflated values... this is the more feasible option
that F/C is but not as readily pursued.
Dave:Re: Wheat/Food StorageReal Wealth is knowing you
can feed your family in uncertain economic times. Yes, I feel real good knowing
I don't have to beg my neighbor, church or government for food. Last I checked
money does not taste real good and the dollar is going down in value and my
wheat is increasing in value.
I seriously hope you are being 100% sarcastic. It's hard to tell when "reading"
someone's comment, as opposed to "hearing" a comment. If you are
serious, I feel sorry for you.
I have lived in Utah (USA) for 8 months. I am amazed at the huge consumer debt
that I see. People are encouraged at every turn to spend money that they do not
have. I have received countless offers of credit cards from all sorts of
institutions and companies since I have been here. It is SO EASY to get into
debt here. I have witnessed a surprising level of materialism among people in
certain areas. We rented a condo in a really nice area - new, young ,lots of
material possessions. When we bought an older home in an older area in the
Valley people were amazed that we would want to move to an older area. I have
friends that have 3-5 credit cards - all maxed to the limit. What is wrong with
people? We love it here and love the opportunities that we have. In my opinion
people have largely got themselves into this mess. You don't need a new sofa
every 2 years, so what if you kitchen appliances don't match. We love the old
area that we live in now. People are grounded and not trying to keep up with
The real losers in the housing crisis are those responsible people like me who
actually met the qualifications for a home loan without crazy financing and are
making their monthly mortgage payment. Here in N. California where the average
home costs more than $600,000- It's the idiots who should have never been
approved for a mortgage and are now walking away from a home they should never
have qualified for and are foreclosing that caused this crisis. Those people
along with the lenders who cooked the loan approvals are making the honest
homeowner pay the price for this crisis!!!
KSL hosted an advertiser today offering training on how to make big bucks in
Utah on another personss foreclosure[sub-prime lockout]. The training
vultures are back and encouraging people to engage in this new white collar
crime of equity steeling and flipping properties, amongst other actions that are
investigatable and possibly prosecutable. Homeowners have and will go through
literal by these sharks and their trainees. Watch out for those we can help you
avoid foreclosure stunts, too.
We have a modest house, with no mortgage. Accelerating the payment of principal
can save 10's of thousands of dollars. Pay as you go keeps one in the black. But
the government and the FED still manage to steal from everyone by creating huge
deficits and inflating the money supply. Let's get back to HONEST money! Get the
FED out of creating money out of thin air! Ron Paul is right. Only honest money
can get us out of this mess!
I am very puzzled and confused. you say u are waiting until houses decline to
~50%? I say good luck waiting. How is it that 2 houses in my neighborhood sold
in less than a month for way more than they paid for them? If I could get what
they sold their homes for just last week, I will have doubled what i paid 3
years ago. Try to tell me that homes are declining! I, too, make what you do,
and I am enjoying home ownership while you are enjoying rental receipts.
Whatever homes are priced at does not matter, what matters is everyone needs an
affordable roof over their head.
I am an educated investor who understands these financial instruments. If I
make bad decisions, I should accept responsibility.However, there
are millions of people who have only a rudimentary understanding of mortgage
instruments, let alone basic cost-of-money principles. When you involve two
real estate agents, a mortgage broker or bank, an underwriter, and a title
company, all who have an extremely high vested interest in the transaction
taking place, you end up with normal-every-day buyers (and sellers) executing an
unwise transaction due to the input of several parties with a potential conflict
of interest. I saw this happen with my first house, decades ago, and learned a
valuable lesson. Sometimes, however, these lessons are too costly from which to
recover.It is not only inaccurate, but a little cruelly stupid, to
believe the responsibility lies only with the buyer here. There is plenty of
responsibility and accountability to go around, but real estate agents, mortgage
brokers, banks, underwriters, and title companies need to be held accountable
for some of it. These fields drive entire sub-economies here and I don't hear a
whole lot of people talking about it. This is not equitable.
Nonsense!Spend. Spend. Spend.Max out all your credit cards.Keep the American economy afloat.Buy every new gadget that comes
along.All this gloom and doom talk is just more liberal lies.Vote Republican (and don't forget to keep spending)
Everyone here seems to think our economy will rebound as it has many times in
the past. You'd better think again! What about our growing annual
several-trillion dollar trade deficits that occur every year? What about our
insurmountaabe and growing national debt? What about the fact that NAFTA has
caused and is continuing to cause the loss of millions of professional jobs,
that have gone over to foreign countries (corporate greed)? What about the Free
Trade of the Americas (FTA) that our government has been attempting to bring
about? What about this on-going war; which we all know, Bush wants to expand
into Iran? By the way, we have been borrowing from China to fund this war for
the past few years. Against every other currancy, the dollar is plumeting! Oh
yeah, and what about the cost of illegal immigration? By the way, the Federal
Reserve is unconstitutional and it's title is deceptive! It is made up of
private world banks who call all the shots. It is and always has been their
design to eliminate the middle-class. I could go on and on. We are on an
irreversable course into becoming a third-world nation and into a depression.
May some day my wife and I WILL be able to afford a home. We were priced out of
the market years ago and have been patiently waiting and saving for the return
of home prices from their trip to the moon. Our one bedroom apartment is seeming
more and more cozy after seven years.There are plenty of buyers in
Utah. Problem is the prices have left them all behind. Equilibrium needs to be
re-established. If that means lots of forclosures and price decreases, so be it.
In the end, buyers can keep waiting for the prices they want. Builders and those
on the verge of losing their homes don't have that luxury.
Raise them or the circle will break.People with good income don't
comlain, then it hits them... then they wonder why.I am not some
poor person screaming because I just couldn't get a good job.I HAVE
a good job and make enough money and I'm in a solid place right now. I recognize
the problem today and it is mainly greedy business practices. Businesses want to
make more money and don't want to have to pay out.The news will
usually have someone special guest to talk about the "crisis" just as a "set
back" but we will move on and the real problem is in this market over here... or
over there.... it's only REALLY happening to this crowd.. Just to make the
middle class majority feel good to buy more time.It is
simple...nothing need change but businesses focus on working for it's employees
as much as they do their customers. That is what will progress society. Anything
other than that has always historically killed society and will continue to do
so.Focus on helping everyone or crumble in greed. It's as much a
moral issue as a financial problem.Greed destroys progress. Progress
My wife and I have been waiting patiently and renting for four years while other
young couples dove head first into large mortgages. They were "living the
dream." Looks like our patience and smarts is about to pay off. It
feels so good to be right. To the Utah housing market, "how low can you go, how
low can you go?"
Every country has its turn on the top of the heap.All eventually fall to
another country.The United States of America is no different.Live with and appreciate that the best things in life are truly free.
You forgot to add:Please, don't save your IRS/Government stimulus check,
brought to you by your loving "Parents", the Democratic Congress!
I think this picture is much bigger than we're talking about. Homeowners are
often ill educated and can be persuaded (and are) by lenders that they can
afford more than they should believe. Buyers often don't understand cost,
interest, appreciation, or risk. Lenders have high incentives for signing
loans, and this bubble market had been the latest hot way to increase revenue
for lending agencies -- in the short term. Investors count on dividends from
the money they are persuaded by lenders (sometimes with faulty evidence) to
fund. And investors aren't just those on Wall Street. The little guy's 401K's
and Employer retirement funds, etc. bank on these investments paying off. In
short, it isn't just naive buyers, greedy banks, or cut-throat investors who
will be hit with this. Everyone suffers when a market bubble bursts. For most
of history, real estate has been the bedrock of our economy, the safe bet
investment. That's why it's the American Dream. This has been taken for
granted, and why so many don't seem to take this crisis seriously. So, it's
everyone's and no one's fault, and everyone will pay when the housing bubble
This post provides the most insight into the cause of the mess-GREED. It's not
one person's fault, as much as we like to point the finger-a lot of different
parties were involved. Banks, investors, underwriters, real estate agents,
borrowers, have all contributed.You can point blame at the borrower,
yes they should have become more educated before jumping into an unrealistic
financial situation-however. However, many borrowers trust financial
intermediaries to provide them with realistic loans and rates, not loaning them
amounts they know full well the borrower will not be able to repay (they do this
because in most cases banks make their money off the loan transaction, and then
sell the loan on the subprime market). It was in their best interest to push
ridiculous loans because everybody makes money-the bank, the investors, the real
estate agent who receives typically 6% fee off the loan value. All
of these people receive money from the transaction, they promote flipping,
inflated home prices, in attempt to sucker the borrower into thinking they would
get rich out of taking out a bigger loan than they could afford. In short,
everyone is to blame.
Spend 1:45 forgot to add:"...and don't forget to spend your tax rebate on
the wonderful war Bush and Cheney got us into.Just send it back.Uncle Sam Needs YOU!And your money!Otherwise you are a bad
You boldly state: Please, don't save your IRS/Government stimulus check,
brought to you by your loving "Parents", the Democratic Congress!Ahem! GET YOUR FACTS STRAIGHT!Though the so called 'Democratic
Congress!' voted for the stimulus check (which also had a huge Republican
contingency vote for it also (considering that the Dems only hold a 'simple'
majority in congress)), IT WAS BUSH WHO ORIGINATED THIS STUPID POLICY! You seem to forget that one of the largest conservative think tanks and a
conservative economist have both said that President has singly handedly done
more to bring back "Big Brother" government, not seen since FDR, and worse yet,
he has put this nation into the sliding recession its in, and Bush is the first
president to EVER go to war with no means in place to pay for it but instead
in-debt the nation to foreign nations (China, the Saudi's, etc.), and have two
back-to-back years of multi-trillion dollar budgets, record deficits, and a
ruinous legacy of rewarding the rich, privileged and scab profit takers, while
making war on Middle Class America.Bush (and the backseat president
Chenney) have brought 'Big Brother' Big Government back in a way ultra-Liberals
could only dream of.
Haughtiness and lack of accountability. That's what I read here. There seem to
be a lot of supposed professionals on here with nothing better to do.
Why doesn't anybody blame the realtors? Sure, it was not their fault, they were
just saying what buyers wanted to hear - that prices always go up. At the very
least they were doing a lousy job. The biggest lie ever propagated was that
realtors are impartial and we need two, one to represent the seller, one for the
buyer (who then split the proceeds, tehehe). I certainly couldn't be objective
if my paycheck depended more on what I don't do than on what I do. Anybody who
bought at the peak: for goodness sake, sue your realtor. They had (and still
have) a license to print money.
I don't think the rate of foreclosure will be quite as high as predicted in the
article but without question it will be higher than a lot of the disbelievers
think. It seems like almost everywhere in the US people thought it was wise to
use their homes as ATM machines without thinking about what they could really
afford to pay later. Others bought homes with highly inflated prices thanks to
a few dozen bad apples in the mortgage and real estate business along with a few
hundred speculators who were overly greedy. Do I think Joe Neighbor should lose
his house, not really. Do I think the speculators should lose everything they
I know it irritates some people to read about anyone holding out. Us
holder-outers represent a resistance that is keeping a lot of overpriced homes
from selling. Or maybe it bugs some people because it sounds like we take
pleasure in watching others lose their homes. I personally don't enjoy seeing
that. The only reason I think the market needs to decline is because prices are
unfairly high. Just like I want others to be able to stay in their homes...I,
too, would like a place to live. Others hastily bought while my husband and I
came to the painful realization that we couldn't afford even a modest starter
home unless we depended on both incomes, which we felt was risky. If WE could
figure out that there's something wrong with that picture, why couldn't anyone
else? We sure got criticism for it. It's not about wanting others to fail. It's
about having hope for the same chance others got five or more years ago...the
chance to afford a decent home on a 65k income - something with a yard for
$170,000 NOT 5 feet from the airport. I'll happily live there...but ~$170k is
too much to ask.
Poor article, weak comments -Uh-Oh! You will be hearing from our resident
neocon - Thomas, about that. :>
This article is bogus. Media is bogus. Real Estate is still a
great investment.Be optimistic. All of you naysayers on this board
are poor. The rich are rich because they don't listen to people
like you.Shut up and take control of your life! Don't let it
To the guy who said SLC won't crash as hard because we only saw modest
appreciation during the boom: Since when is 22% YOY several years in a row
MODEST? Unless all our paychecks did, it's not sustainable. Oh, and
to say that prices will go back up because inflation will drive it? I think it's
the other way around. The more stuff costs, the more cash-strapped we become.
This only limits our homebuying budget. Please quit trying to "warn"
those waiting that the bottom might come and go before we know it. We're the
ones paying the most attention. We'll buy when it's fair, period. My
favorite comment here: "I enjoy homeownership while you enjoy rental receipts."
Umm...unless you have some serious equity in your home, we're all renters. You
just rent from the bank while they graciously let you put a couple hundred
toward your principal every month. I probably pay less in rent than you pay in
interest AFTER your tax deduction...for just as nice of a place.I
love the show "Arrested Development." The model home they live in perfectly
represents the quality of today's new construction and the incarcerated father
perfectly represents the builders.
The media is as bogus now as it was when it contributed to the hype a few years
ago, telling everyone there was no end in sight for home prices and that we'd
all be homeless if we didn't hurry and get into a home at whatever cost. Also? Uh, I'm not poor. How do you know all the naysayers' net worth
doesn't quadruple your own? You don't. Most people who still rave that real
estate is such a great invesment are very likely invested in it themselves and
are interested in keeping the hype going for their own benefit. Yes, real estate
can be a very good investment because it's an instrument that you can also live
in an over long periods of time it does increase about a percentage over
inflation. People on here saying these things don't need to shut up
just because YOU don't personally benefit from their thoughts. People who
haven't been buying lately DO have control over their lives. They are paying
attention and they're doing what is most financially prudent for THEM which is
not to buy in or right after a boom. Sounds like control to me.
Get real is no doubt a realtor.Any time is always the best time to
buy real estate. :>
I have been watching this train wreck coming in Utah for quite some time. It was
like watching a friend destroy themselves with drug addiction. If I said
anything the debt/status addicts would get mad.They said that I was
a goom and doomer, pessimistic, and that if the media would shut up, that things
would be fine. I am not hearing many deniers anymore. For those who
want continue their trip down the River De Nile, shortly there will be good
deals on boats that strapped HomeMoaners can't afford anymore.
Do you want some humor. My taxes on my house went up over 100% in the last two
years. I have a home built in the 1950's and it remained stable for 10 years
without moving and then presto, 100% in two years. Well, this is great because
now that home prices are dropping I am soooo sure that I will be seeing my taxes
go down.Heres the problem. Person buys a home and get's the biggest
one they can afford. Run the numbers and everything works out. Person feels
like everything is okay. Did not see gas prices rising 100%Did not see taxes RisingDid not see groceries skyrocketProblem. everything you buy is usually transported by train, plain, or truck.
They all use fuel. Want to know whats really scary. Wait until diesel hits
4.50 or 5.00.
Did not see ARM reset comingOr so they say. Remember they were
tricked. They get the most home they can possibly squeeze into their cashflow
math table. I'm sorry but it's so irritating to hear them whine for the
teaser-freezer. Basically they are asking for their 3% interest rate to belong
to them forever as a reward for being subprime. Don't property taxes
go to fund public schools? How come we didn't see the school funding go up 100%
like your taxes did??? Surely when property taxes go down, funding for schools
you should have done what i did...i took a look at how the candy bars are
getting smaller...it corresponds directly to how much buck your money can buy,
house wise. now if the candy bar gets smaller so will the house one can afford.
But I see there are alot of you out there who prefer suckers.Which also
corresponds to those who basically just rented their house pretending to buy it.
The downturn has been coming for some time.The Great Depression took
several decades to get into full swing.What people forget is how
many millionaires were made during that time.Talk about the worker
bees and the beekeepers.The fact is the unholy alliance between the
corporate and governmental behemoths don't give a (blank) about you and me and
are getting richer by the moment in a situation that they manipulated.It's all about buying power.How much buying power do YOU have?
It sounds like you have a second income that you and your husband are not
willing to commit to a mortgage payment. In my opinion...OUTSTANDING money
management and well stated post! Good luck with your house hunting when the
time is right -- be patient!
I have been watching Utah real estate for over four years. About when I was
going to buy, the bubble came to Utah. The MLS used to have around 9
or 10,000 listings. Now, it's close to 22,000 and that doesn't even include all
the FSBOs. Craigslist is full of anxious sellers. This is going to
get a lot worse. The economy is worsening and housing and the rest of the
economy are feeding off each other in a downward spiral.
People, beware: This housing crises is going to throw Utah into the toughest
economic test since the 1920's. Why, because the market decline has absolutely
no fix. Interest rates cannot get any lower, many jobs are going to be lost
(especially service industry), business owners will have absolutely no money to
borrow to bridge business cycles...it's going to be horrendous! This is no
joke. If it wasn't for the LDS church's $1.5 to $2.0 billion development, SLC
would be at a stage two recession.
Maybe after a 25% - 30% value decline property values will be in line with
salaries in Utah. Too many Californians moved in and paid way too much for
their mini mansions. If not for such a price correction the only place a person
could almost afford to live would be in the Midwest ... and that aint too pretty
Bush, as another Bush took a whole bunch of Utahns down the wrong path with the
saving and loans scandal. He walked off scot free, but alot of old people right
here in this state lost their whole retirements in one day! Think before you
I didn't vote for any Republican.Never will.
Congratulations to all the folks who read this article, and offered their
opinion(s). This subject is deadly serious, and warns us of some significant
challenges ahead. I am fortunate to have "sat out" this market, and rented,
while prices were well out of proportion to an equivalent rental property. My
prior experience here in Utah (1981-1989) led me to believe that, on average,
many folks had a tendency to overextend themselves, financially. Upon my return
in 2005 the behavior seems to have become the "norm", and well here we
are......Utah is not different from the rest of the U.S., just slow to catch
We have been renting for some time in Murray, but our GREEDY Land Lord has just
Hiked up our rent $130! I can see $25 every 6 months, but $130? We have lived
here for 4 years, mow their grass and snow blow their walk to be Kind if you can
believe that and they hiked our rent $130. I asked why and she said, "Tax Hikes"
and "Insurance" and other costs, I think it is called "Lining Your Pockets!" We
have found a couple of homes under $155,000. I had hoped to hold out, but I am
thinking a few things, although if we held out we would be "throwing our Money
away" in rent, instead of building equity. We are not "Starter House" people
either, we want a home to grow into, and grow out of past retirement for the
family, like they did in the OLD'n Days, when people had brains and used them!
We have 1 adorable little girl, one on the way and hoping to polish our family
off with 2 more and we make about $50,000 total per year. Live Frugal, Be Happy,
Multiply and have Joy In Your Posterity!
What we need to understand is that this is a buyers market. The list prices on
the homes for sale are a list price not a sales price. Far too often, buyers
are offering only 5K or so lower than list price and think they are getting a
deal. No! Unless you are offering at least 10% less than list price, you are not
helping yourself, or the market correction that needs to take place. Also note
to sellers: You need to humble yourselves and realize that your home is not
worth as much as your Realtor says it is. Not selling fast? Then lower your
Price! This is the main principle of Economics!
TO: The renter in Murray that got a $130 rent increase,Are you under
any kind of contract? It's a pain to move but you should tell your landlord that
you will be moving. Instead of an extra $130 they will be looking at a big
hassle, turover costs, and maybe several months of NO RENT.I mean
the turnover of the property will cost them a lot. Use good judgement since I
don't know all the factors here. They are taking you for granted.If
they blink, then do a lease at a compromise rate. and lock it in at a fixed
price for a year or more.Or just move. These "landlords" really
irritate me. Former Property Manager
I hate to rain on everyone's parade, but without Realtors the housing economy
would fall apart. There are many bad realtors but there are also many bad
mechanics, insurance salesman, teachers, custodians, etc. Every field of work
has it's corrupt people and it's completely honest people. It makes me sick when
everyone titles Realtors as blood sucking liars. Being a realtor is my career
and hearing ignorant people label me with the rest makes me feel like my honesty
and integrity don't matter one bit.
I am a home builder and built about 15 homes/year for the last 10 years. This
year, I've only sold 1 so far for a tiny profit of $5,000. I could see this bust
coming and prepared for it, though, and don't have any other construction loans
right now. But I have friends who build and they have 5-10 construction loans
out right now. To put it kindly, they are getting eaten alive with interest
payments. Many are paying $20,000/month just in interest. Say what you will
about the general Utah economy, but for me and my kind, we are in a recession.
Housing is in a recession, no doubt about it.
I would like to know exactly where he got this informaation--there are alot
more than 25 houses in my area and none of them are going into foreclosureToo bad things are not checked for accuracy before they are published
"without Realtors the housing economy would fall apart"You
absolutely MUST BE KIDDING. Get rid of the laws that protect realtors turf and
control the MLS.Then we can talk about how necessary realtors are. That's great that you are "honest". You are also in a profession that
needs major restructuring but that has a strangle hold on legislators in order
to prevent that change and protect your profession's profits.
rosemarie, Have you gone and asked each of your 25 neighbors if they
are in foreclosure? No sign goes on the lawn for foreclosure, so how would you
Yes my family and I have also 5 times our money on wheat, and next it will be
rice. I have been working diligently for 5 years on my storage trying to store
up needs for my family. I know my family will appreciate something to eat in
hard times. I have also heard that Cash and novilty toys don't cook or taste
very well when cooked up!
It reminds me of the grasshopper and the ant story. I think people just think
they will never use their storage, the Church has begged, even commanded us to
have it. We are taught that the first law of heaven is obedience, I am afraid
we are not measuring up. When you talk about food storage it reminds me of the
10 virgins, how 5 were foolish and 5 were wise. I also picture the 5 foolish
running around begging to borrow oil. When Noahclosed up the ship, he did
not open it back up tolet the unprepared in. I think we need to get back
to basics and not spend out of our means because wewant to look successful
to others. I think going over your head and spending money is an addiction, and
a plague and we should run from it. We are setting our children up for
expectations in life that are unreasonable unless they carry alot of debt. It's
time for us to change and be better stewards over our money that we are
responsible for.I think we can learn alot from our Depression Era parents,
that ran from big houses.
Utah's prices are a little high compared to incomes, but not outrageously high.
According to the Census Bureau, Utah's median household income is $55K and
according to the NAR home price index, Utah's median home price is $229K. So at
current 30 year fixed interest rates around 6% and a 10% down payment, the
monthly payment (including principal, interest, mortgage interest, insurance,
and taxes) is about 32% of income. Or an FHA loan with 3% down, about 34% of
income....slightly above recommended levels of no more than 30% of income, but
not so bad that home prices will drop 50%. Of course, doom and
gloom reports can be a self-fulfilling prophecy leading to actual doom and
gloom. But this will simply create opportunities for those who are prepared to
act.(and no, I'm not a realtor, just someone who can actually do
math unlike most reporters and likes to analyze and question media reports that
make wild claims)
"Homeownership is the primary vehicle through which American families build
financial security." No, living below your means is. This is no
one's fault but the people who took out loans that they couldn't afford. I am
SO mad that the government is getting involved. I am sick of the entitlement
mentality that is ruining this country. And no I don't want to pay for every
one's health care either.
Simple financial advice: if you can't afford it, don't buy it. Plus, your home
is not an ATM.It's not rocket science!
Gus, what were the builders doing with their profits during the past 3 years
(and those profits were huge on a house). Now they complain they are in
financial trouble?Did they really believe this fantasy would
continue indefinitely? Sounds like bad business practices by
builders! No bailout!
I WOULD LIKE TO SEE THE FOLLOWING:HOUSE COSTS DROP, GAS PRICES DROP AND
HEALTHCARE COST DROP.I WOULD ALSO LIKE TO SEE SALARIES GO UP!GUESS I LIVE IN DREAMLAND-LOL.HAVE A GREAT DAY EVERYONE-HOPE
THINGS WORK OUT FOR ALL OF US AND FOR THE FUTURE!
Absolutely NO SYMPATHY for these people too stupid to understand what they are
signing. They buy the big mansion homes knowing they can't pay for them and now
expect the government and neighbors to pay for their stupidity. I have a
refrigerator box I will SELL to them as I point them to a freeway underpass to
live under.Stop buying ice cream and pay your bills. They are deadbeats
and welfare types and expect the rest of us to take care of them. Let them lose
Lots of builders were putting their profits into more land and probably buying
themselves a big nice home too. But, I'm not asking for a bailout at all.
Actually, the opposite. I'd like government to keep their hands off. I'd like
them to stop lowering rates because the banks are just sitting on that cheap
money. Stop bailing out the big brokerages because they should take
responsibility for their actions. Stop creating special lending institutions. I
firmly believe that letting this thing correct on it's the best option for our
economy and for Americans. Yes, some will lose their homes, but whoever said
that homeownership is risk free. Let them rent for a while and regain their
financial footing. Then re-enter the market at market prices.
My sister tried a short sale of her property through HOMEQ and it is horrible
how the people in that place do not take that work seriously. Every
one of them ask for the documents she already submitted, a new person on the
phone ask her for the same papers, and not one of them seems to take
responsability of what they represent. HOMEQ is the worst, it is a
headless institution. My sister has a buyer for her home, but HOMEQ rather sent
her a notice of foreclosure, without taking into consideration all the paper
work submitted! Our economy is into DEPRESION and the government
does not seems to realize that. People losing their homes by the hundreds is an
indicator. What to do? just PRAY!
Cheers to YOU! you hit it right on!NO Sympathy,you signed the
dotted line-now pay for it. People need to live within their means and stop
waiting for neighbors to bail them out. They should be embarrassed for their
stupidity. I like the bumper sticker that says~"Don't think my car is good
enough-well my house is paid off"
Amen to the earlier comment on the buyers market. Sellers need to humble
themselves and realize that the market wouldn't be so slow if they would
actually lower their prices. And no, I'm not talking 5 or 6k reductions. I mean
lowering your prices to what your home is really worth in today's market. If
it's not selling, then you are overpriced. The Market will speed up if Sellers
Wouldn't the reverse be true as well? Why don't you just pony up the cash that
the seller is asking and the market will speed up because you will be buying.Maybe you need to eat some humble pie and quit whining about the prices
and pay up....I do believe the knife cuts both ways....and no, my house is not on the market..
I like your attitude. I've got some things I would like to sell you.
That was some fancy footwork. You can't use Wasatch Front incomes and then
drive down the median home price by using the whole state. That double wide
trailer in Green River doesn't count. Kelly Matthews, Wells Fargo's
well respected economist and Utah housing expert, published a report about 6
months ago that said basically Wasatch Front home prices have to drop by 20% or
incomes have to increase substantially for the market to begin to make sense.
Take a guess which one is happening.
whacha got for sale?
Actually, the data goes the other way - statewide (Utah) incomes and Salt Lake /
Wasatch Front prices. So the double-wide guy's pulling down the income number
but not the house price number. And that's a 4th quarter 2007 number for home
prices, but only a 2006 income number. If you have a Wasatch Front only number
for income, I'd be interested in what that is but I'm guessing it's higher than
the state average. According to the NAR report, median home prices
have already dropped about 7.5% from where they were at the peak here ($247K to
$229K). And I believe the average income increase was about 7.5% last year. So
even if you accept Kelly Matthews nice round 20% number, about 15% of that 20%
gap has already been closed between price reduction and income increase.One other thing that these numbers don't account for is the changing mix
between single family homes and condos. The median price of a condo is much
lower and more and more first time buyers get condos because they're generally
You "Hard Numbers Guys" are tiring. You are like the guys on CNBC that have been
debating for months whether we are in a recession. You miss the forest for the
trees. Housing has stalled and is tanking hard in Utah. People are paying higher
costs for all their basic needs. Jobs are being lost. Be so good as to do a
report for me so I can sell my house for more than anyone is willing to pay and
so I can get the grocer to lower the price of groceries.Now you can
argue whether it's tomAto or tomOto.Have at it!
I don't understand why the feds feel they have to bail out anyone, homeowner or
large brokerage firm. Just make people take responsibility for their actions
whether it's lenders, homeowners, mortgage brokers, hedge funds, or brokerage
houses. Let them all suffer a little and let folks sell their houses
at market prices. This would correct the economy much faster than all this
superficial propping up of the economy.
The lobbyists of the mortgage brokerage industry have gotten their way with the
Bush administration, as well as, (of course), the big oil people. Therefore, the
economy will continue to tailspin, because of this scenario. Oh yes, once
in awhile there will be days when Wall Street will spike upward, and the stock
brokers will be doing their cheerleading on T.V., on those days. But the overall
effect will be downward for many, many months. I am counting the days when
George W. is finally gone. I took my 401K money out of the stock market at the
end of last year and will not be riding down that slope. I plunked it into a
stable income account, so that I can at least sleep at night. Utah people need
to take a second look at which party is truly for your children and
great-grandchildren. The Republican Party left me. I think it needs an overhaul.
The reason that people should not and will no "pony up" and pay the high Real
Estate prices is that lenders have gotten in trouble and are no longer allowed
to give people loans who don't truly qualify. So therefore, buyers cannot
qualify for these high of loans let alone actually try to afford them.
I agree with the wheat poster. Grain prices are going up, up and up. I never
want to be hungry. I can live without big houses and toys, but I can't live
without food. Haven't we been warned to get out of debt and store food? Why
are people so silly?
I am in a job that has me driving through neighborhoods daily. I've noticed
that low to moderately priced neighborhoods dont have near the numbers of for
sale signs as the McCastle neighborhoods. How much of this 4-5% that is in
trouble is people who "needed" a McCastle and used a subprime loan to get it?
If my, admittedly unscientific, observations are correct, I dont want my tax
dollars used to bail out $500k+ homebuyers. They can lose their home and rent
or buy something more modest like the responsible homeowners. Has anyone seen
anything that says which end of the housing scale has the bulk of the problem?
You are 100% correct. Anyone who disagrees with you must be a Realtor or Real
clueless to what is going on. Utah appreciated 40% over the last 3 years for no
reason except for greedy Realtors, Appraisors, Lenders, and Investors. I have
owned 3 houses in Utah, and moved out of state during the boom. I came back and
have been renting for the last 15 months waiting for this to happen, and here it
goes. I was hoping for 25% declines, but now with the lending crisis, it will
be at least 40%. To all the clueless poeple out there, if it can go up 40% in 3
years, it can go down 40% in 3 years, and it will. Anyone who buys a home or
listens to a Realtor or Politician in the next year will upside down in a hurry.
Myself and Holding Out will be laughing as we sign out closing papers in a year
I too am holding out. I sold a home about 3 months ago and took a little bit of
a loss (moved). I have refused to buy in spite of others around me telling me
things aren't bad. If you believe things are good you should walk around any
neighborhood built in the last two years. Most homes sit vacant and prices are
still untouchable. I make > 100k a year and feel just fine renting until I see
stability and have 150k in cash. Smart money right now is saying stay out of
the market. Anyone who sold in the last 6 months and thought maybe they
conceeded too much are now sitting back laughing at what someone actually paid.
Not that it is worth anything, but I see a minimum 25-30% correction from todays
prices. I see a return to prices 5 years prior if not lower. Typically, the
downturn is felt greater than the upturn. Good luck to those sitting on your
over inflated listing.