By Deborah Orr, Forbes.com
Nov. 8, 2007
Home prices nationwide posted their biggest drop in 16 years last month, according to the National Association of
Realtors. But someone forgot to tell the folks in Salt Lake City. There, the median home sale price jumped 21
percent in the second quarter this year, versus the same period last year. (Sugar House Utah real estate is a big
part of this jump). It's not that Salt Lake City is entirely immune to the national housing downturn. In fact, new
housing permits are down this year, and there is a glut of McMansions, says John Taylor, investment specialist at
Commerce CRG, a unit of developer Cushman & Wakefield. But with more people moving into the area, thanks
in part to a percolating job market, demand for affordable existing homes is still healthy, while commercial
construction is up 40 percent from last year. Apartment vacancy rates are less than 2 percent, and longtime
residents worry about a land grab from commercial property investors flocking in from California and Las Vegas
“We are in the middle of a construction boom,” says Taylor. Salt Lake City isn't the only anomaly. Prices are rising in
other parts of the Rocky Mountain states, parts of Texas, the Pacific Northwest and the Southeast. The markets
most defying the national meltdown include Beaumont-Port Arthur, Texas, Salem, Ore., and Farmington, N.M. What
gives? For starters, these places missed the get-rich real-estate frenzy of recent years, says Lawrence Yun,
economist for the National Association of Realtors. Prices aren't falling because they didn't rise that much to begin
with. The median price of a single-family home in Sarasota, Fla., in June was $311,000. Compare that with $228,000
in Salem, which realized a 16.7 percent increase in property values in the second quarter of 2007, versus the same
time frame in 2006.Yun believes states like New Mexico and Utah are finally, albeit belatedly, enjoying the run-up in
property prices that began in California and swept through Nevada in the last few years. According to Taylor, Salt
Lake City has typically been more affordable than many other parts of the nation, but as property prices fall in the
rest of the country, the gap has closed. In the second quarter of 2007, the national median existing single-family
home price was $223,800, down 1.5 percent from a year earlier. The median price in Salt Lake City, however, is now
up to $233,100. Percolating local job markets get some of the credit. (In fact, the more resilient property markets
tend to be in places with above-average job growth.) Also on the list: New Mexico, Arizona, parts of Texas and Salt
Lake City. Of course, even in locations where home prices are still sizzling, there are no guarantees that the current
national housing slump won't creep into the neighborhood. The devastating drop in real estate in parts of Florida,
California and Michigan have made potential homeowners skittish in general. A whole layer of sub-prime borrowers
are facing financial ruin and foreclosure. It's difficult to envision a scenario that sees them rejoining the real estate
market in a meaningful way anytime soon.
Nov. 8, 2007
Home prices nationwide posted their biggest drop in 16 years last month, according to the National Association of
Realtors. But someone forgot to tell the folks in Salt Lake City. There, the median home sale price jumped 21
percent in the second quarter this year, versus the same period last year. (Sugar House Utah real estate is a big
part of this jump). It's not that Salt Lake City is entirely immune to the national housing downturn. In fact, new
housing permits are down this year, and there is a glut of McMansions, says John Taylor, investment specialist at
Commerce CRG, a unit of developer Cushman & Wakefield. But with more people moving into the area, thanks
in part to a percolating job market, demand for affordable existing homes is still healthy, while commercial
construction is up 40 percent from last year. Apartment vacancy rates are less than 2 percent, and longtime
residents worry about a land grab from commercial property investors flocking in from California and Las Vegas
“We are in the middle of a construction boom,” says Taylor. Salt Lake City isn't the only anomaly. Prices are rising in
other parts of the Rocky Mountain states, parts of Texas, the Pacific Northwest and the Southeast. The markets
most defying the national meltdown include Beaumont-Port Arthur, Texas, Salem, Ore., and Farmington, N.M. What
gives? For starters, these places missed the get-rich real-estate frenzy of recent years, says Lawrence Yun,
economist for the National Association of Realtors. Prices aren't falling because they didn't rise that much to begin
with. The median price of a single-family home in Sarasota, Fla., in June was $311,000. Compare that with $228,000
in Salem, which realized a 16.7 percent increase in property values in the second quarter of 2007, versus the same
time frame in 2006.Yun believes states like New Mexico and Utah are finally, albeit belatedly, enjoying the run-up in
property prices that began in California and swept through Nevada in the last few years. According to Taylor, Salt
Lake City has typically been more affordable than many other parts of the nation, but as property prices fall in the
rest of the country, the gap has closed. In the second quarter of 2007, the national median existing single-family
home price was $223,800, down 1.5 percent from a year earlier. The median price in Salt Lake City, however, is now
up to $233,100. Percolating local job markets get some of the credit. (In fact, the more resilient property markets
tend to be in places with above-average job growth.) Also on the list: New Mexico, Arizona, parts of Texas and Salt
Lake City. Of course, even in locations where home prices are still sizzling, there are no guarantees that the current
national housing slump won't creep into the neighborhood. The devastating drop in real estate in parts of Florida,
California and Michigan have made potential homeowners skittish in general. A whole layer of sub-prime borrowers
are facing financial ruin and foreclosure. It's difficult to envision a scenario that sees them rejoining the real estate
market in a meaningful way anytime soon.
| Kirk Millson Plumb & Co. |
| 801.419.8912 |
| SLC Leads Nation In Home Appreciation |
| Sugar House Real Estate Still a Great Investment |
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