Tough Business

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The Salt Lake Board of REALTORS just released last month’s sales data for Salt Lake County. Basically, all the stats pointed downward form the same time last year, to wit: 1) number of sales of all types of property were down 26.1%, 2) the median single-family home prices dropped to $600,000 (down 4.1%), 3) the number of sales of just single family homes down 26.1% (748 sales in June), 4) median price per sq. ft. $254.41, down 1.2% and 5) the median home price of all types of residences down 4% to $519,000.

Last week the Fed met and raised key interest rates it charges to banks by .25%, the 11th time since last March, and the highest level in 22 years.  Mind you when I got my real estate license in 1984 interest rates were 18%!  Houses were NOT selling, and builders were in a panic. The market responded by creating something called a ‘negative amortization loan’ which almost immediately boosted home sales here. How did that work?  Imagine walking into a builder’s sales office knowing that mortgage rates were 18% for a 30 year loan, but the builder’s rep asked you if you’d buy one of their homes if the interest rate was 6.5%?  Well of course, you’d be interested, right? The deal was that indeed, the rate would be that low, but the interest difference between 18% and 6.5% would be added back into what you owed on your mortgage…11.5% each month. That difference would increase what you owed the bank each and every month, and well, if you wanted to sell a few years after your purchase you’d find out you owed MORE than the property was worth!  Just like in 208-09, many people lost their homes and simply gave them back to the bank. The 1980-82 recession in the U.S. was the worst economic downturn in the country since the great depression and property values dropped. It was influenced by the 1979 energy crisis which was mostly caused by the Iranian Revolution that caused a major disruption to the global oil supply. There were long and ugly lines at gas stations around the country as vendors ran out of fuel due to the poor supply chain. Much like today, Americans in the Reagan era were concerned with high budget deficits in the U.S. Treasury and bemoaned a lack of trust in the government. Sound familiar?

The June sales stats also picture a local real estate industry that can’t possibly support a living wage for real estate agents when total sales in a month of all types of residences in the County were a mere 1,072 when there are over 10,000 members of the Salt Lake Board of REALTORS. That stat points to just over 10% of the membership selling homes last month, and like any sales profession, ‘10% sell 90% of the inventory’. Thinking of being a real estate agent? It’s a tough business!

$20K Help or Not?

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First time home buyers or folks who haven’t owned a home in the past three years should be jumping up and down now that the $20,000 has been authorized/released from the State Legislature for qualified buyers. BUT it’s not as wonderful as it seems.

First, only 2,400 qualified homebuyers will be able to get the funds through the First-time Homebuyer Assistance Program.

Second, you can’t buy a home that costs over $450,000.

Third, and this is a biggie…you can only buy NEW CONSTRUCTION.   This last requirement was lobbied by developers and may not help that many people wanting to live in certain areas. There’s very little new affordable construction going on in rural areas of the state, and almost none close-in to downtown Salt Lake City except for a few townhomes. When searching the WFRMLS for new construction properties in the Salt Lake Valley, a whopping 37 show up under $450,000 and all are townhomes. Townhomes may be great for some, but often they have many stairs so that differently abled persons and seniors could not buy one. Utah County had 74 properties with only two home subdivisions (not townhomes) in Eagle Mountain and Spanish Fork. Davis County had a mere 9 available, again, all townhomes. Washington County also had 9 properties, mostly townhomes, with a few one level homes available in Hurricane. Summit County has NO properties that fit the requirements and Wasatch County has one newly constructed home in Daniel for $160,000. Many builders do NOT list their properties on an MLS and so buyers have to drive around or hunt and peck on the interweb to find other options.

Townhomes are similar to condos in that some have HOA fees for exterior insurance, water, sewer and grounds maintenance. Depending on the subdivision you may or may not own the land underneath the unit. They are a great housing alternative for some because they are an affordable option for some and offer a ‘lock and leave lifestyle’ if the exterior landscaping is paid for in a monthly fee. The most common floorplan is living space above a two car garage, with the second level the kitchen, great room and probably a half bath, and laundry and the rest of the bedrooms/ baths on the second floor.

IF you think you’ve found housing that fits the rules for the program, your first step is to get pre-approved with a participating lender to get credit-qualified. The $20K loan is 0% interest with no monthly payments and can be used toward the down payment and/or closing costs. When you refinance or sell the property you have to repay the amount borrowed OR 50% of the home equity.

For more information, contact a local mortgage broker who can qualify you and spell out the numbers for you for a loan. I don’t suggest internet brokers as they may not be familiar with the program. And check out utahhousing.org.

PADDLE TIME

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When it’s hot as hell we all like to find cool water. From our myriad of lakes and reservoirs to out rivers around the state, people love to swim, boat, paddleboard and kayak especially now that a really harsh winter has almost melted away. There’s one waterway many of us don’t think about-the Jordan River with its Jordan River Parkway connecting 45 miles from Utah Lake to the Salt Lake Fairgrounds. Yet the earliest known people in the state, from Native Tribes to Mormon pioneers knew the river intimately as a source for irrigation.

The Jordan began as a cold-water fishery with 13 native species including the Bonneville cutthroat trout, it later turned into a warm-water fishery with mostly the common carp fish swimming in its waters. It is the only outlet for the waters from Utah Lake.  Sadly, the river was a catch-all for sewage from settlers and later industry waste like from the Geneva Steel smelter where Vineyard in Utah County is now located and in the 1960’s Utah Lake and the river was a stinking mess. Yet citizens cried out and sewage treatment began and with help from the Feds Clean Water Act and monies from the Superfund it got cleaner and cleaner.

Nowadays the Jordan River is much cleaner and is a destination place for many as there are now many boat ramps and parks along the waterway as well as a wonderful, paved pathway. The Jordan River Commission has a great website that shows the addresses of all the current boat ramps from Utah County to Salt Lake County. The helpful site jordanrivercommission.com offers videos about paddling along the river, hints for self-guided and group paddle trips and where to sign up for Utah Outdoors bicycle trips alongside the waterway as well as paddle trips in the water.  The Commission is also going to lead guided paddles weekly during September as part of the “Get To the River Festival”.

The most recent boat ramp just opened up at Pioneer Crossing Park in West Valley at 1272 W. 3300 South (just east of the Utah Cultural Celebration Center) last week and to the joy of many suffering from the July heatwave it was great to slip into the river and enjoy a cooler temp along the banks and under the trees and brush alongside it. Alongside the ramp there is a park with a small playground and places to sit that will be expanded to an even larger park soon.

I have to laugh at people who look at Utah Lake and the Jordan River as a ‘no-go’ because the water looks polluted and is almost white in color. The water in Utah Lake sits over a white/gray clay bed which makes the waters murky. Although no one is encouraged to swim in the Jordan, you can rent kayaks through the commission to enjoy this wonderful waterway.