Remember back in Econ 101 when we learned what a GDP is? Refresher: It’s the market value of all the goods and services produced in a certain geographic area. Places with a large GDP will generally have a high standard of living. Politicians and economists want their city, county, state and/or country to have a great GDP, and Utah now has that golden ray of sun shining through the clouds at us right now. Forbes magazine has just rated us the number one state with the biggest growth in our gross domestic products. But really, what does that mean?

Utah’s economy is HOT. It has been for several years. Our GDP has grown from $123.47 billion in 2010 to $168.62 billion in 2020 (despite COVID). It grew 82% from 2000 to 2020 and the pandemic barely seems to have made a major difference in our state’s production machinery, having come back from the pandemic faster than any other state. We have a diversified economy that’s strong in technology, oil, gas, salt and coal mining, tourism, manufacturing, agriculture and finance.

Sadly though, the drought we’re suffering may tilt some of the figures into negative columns in the next few years and slow our GDP. For example, farmers can’t get water to grow hay, ranchers are planning to sell off stock because hay is too expensive and beef prices will be skyrocketing. Snow totals are down and expected to get worse which will affect tourism at our resorts. This despite how well we are known since we hosted the world in the 2002 Winter Olympics.

The next nine states with the highest GDP are Washington, Colorado, Arizona, Oregon, California, Texas, Georgia and Florida. The western states are all experiencing extreme weather conditions which include heat and drought as well as fires. GDP can turn sour if we buy less, government cuts back on spending, we export less and business investment falls. Utah exports a wide variety of goods, like microchips, medical equipment, aircraft parts, and auto safety products. But if you want to win the weekly trivia night at your local pub, answer this question: What is our largest mineral export? (fade in Jeopardy music). GOLD. Utah and Nevada are the two states neck and neck with gold production.

If you’re a stats geek or just interested in following the health of our economy, watch the periodic, but regular GDP reports. If the measurement in Utah begins to drop that means we’re going to see a decline in per capital income. The poor will suffer more than the rich, as in the adage ‘The poor will get poorer, the rich, richer’. When you hear reporters talk of businesses suffering in declining revenues and unemployment is rising, the talk will start up again to sus out if we are heading into a recession. What we do know right now is that food and gas prices are just going up, up and up which is making an impact on all our standards of living.

https://www.forbes.com/sites/andrewdepietro/2021/08/04/2021-us-states-by-gdp-and-which-states-have-experienced-the-biggest-growth/?sh=17796b0a846c

We hear this term ‘gentrification’ a lot these days when it comes to neighborhoods. Basically, by definition, it’s when a poor neighborhood is changed by wealthier buyers and renters moving in, which then generally pushes out the less financially abundant folk living there.  I became aware of this in Salt Lake City many decades ago when John Williams, one of the owners of Gastronomy/Market Street Grill/The New Yorker purchased a home in the Capitol Hill area. At that point in time many people were astounded that he didn’t buy a home in the Harvard/Yale, Federal Heights, or Holladay neighborhoods where expensive homes are traditionally found. Williams had lived downtown and buying on the Hill was a natural for him because the new home was close to his office, but people still scratched their head as to why he’d live in an area that hadn’t been known as an ‘exclusive neighborhood’.  Thanks to Williams homesteading in a less expensive neighborhood, buyer’s eyes turned to the wonderfully historic homes around the state capitol building and soon a younger and more affluent group of buyers called the Marmalade and Capitol Hill neighborhoods home. Over the years this has happened to such neighborhoods in the Salt Lake Valley as lower Sugar House, Taylorsville, areas around Cottonwood Heights (i.e., White City), and Rose Park. It’s now visible in the lower 9^th and 9^th neighborhood, Poplar Grove and Glendale as the ‘up and coming’ places to live.

A whole new type of gentrification is beginning to happen along the East Coast shoreline communities, now dubbed ‘climate gentrification’ CNN news stated last month that it’s a “process in which wealthier people fleeing from climate-risky areas spur higher housing prices and more aggressive gentrification in safer areas.”  The black working-class neighborhoods on high ground in New Orleans have seen new neighbors coming in and grabbing up cheaper homes above the flood plain and pushing up housing prices. Did you happen to see the horrific news of the condo building collapsing in the Miami area last month that killed almost 100 people living in building the middle of the night? There’s a new mentality to flee from the danger of hurricane winds, storm surges and water damage and move inland to higher ground.

“Climate-risky cities around the country are also seeing signs of gentrification…where booming real estate prices in higher-ground, minority neighborhoods – like Little Haiti – have been tied to sea level rise,” reported CNN. It’s a fact that as the climate changes sea levels will rise. New York City is only 33’ above sea level, Miami is 6.5’ and San Francisco is 52’ near the bay.  The areas of the U.S. that see the most coastal flooding include Tampa, Charleston, Long Island and New Jersey.

Given the massive monsoon rains in Southern Utah this year, homeowners may want to re-assess if they should live on higher ground in the future if these storms are going to become the norm. The theory of climate gentrification would then logically point to affordable housing appearing in flood-prone neighborhoods. And flood insurance is extremely expensive!

I didn’t have television for years. Then my clients started talking about this ‘HGTV’ and all these programs about flipping houses and million dollar listings. So, I signed up for cable and of course like many of you, my brain has turned to mush. I have NOT however gotten addicted to house porn, watching all the home shows, and cruising various websites to view dream homes I could never buy in Manhattan, Hawaii, Mexico, etc. Why? Because I live and breath ‘looking at homes’ seven days a week! I do have agent friends all over the country and I love talking to them about their markets and sales prices and the crazy stories that often go with multi-million dollar properties.

NYC is all abuzz this past month after the biggest transaction so far this year closed at 220 Central Park South. The buyer purchased two floors in the building for a mere $157.5 million. It is right in the center of what is known there as ‘Billionaires Row’, where insanely high glass residential towers have been erected on and around Central Park. On the West Coast where my granddaughter is now apprenticing at a real estate firm in Los Angeles, there have been some multi-million dollar mansions trade hands. Barron Hilton’s (as in hotels, and now deceased) Bel-Air estate closed escrow for $61.5 million. It was designed by an architect who worked for Fran Sinatra and Lucille Ball, and had 13,000 sq. ft, 13 bedrooms and 17 bathrooms and was known for it’s famous Moderne-inspired swimming pool with a blue, gold and yellow tiled pool depicting the 12 signs of the Zodiac.

The highest sale reported so far this year by the Wasatch Front Regional MLS is in Park City in the Colony Project at White Pine. This subdivision is the most expensive place to live in Utah. The buyer paid $14.1 million for a three level (9282 Sq. Ft. per floor) 14 bedroom, 21 bath home with an 18 car garage on just over five acres. And of course, the luxury home has all the bells and whistles you’d expect in a millionaire’s home:  multiple bars, a movie theater, sauna, spa, gym and a 3,000 bottle wine cellar. The highest listed home on our MLS is the $69.2 million Deer Hollow Ranch in New Harmony, Utah. The mansion sits on 800 acres and touts a dozen reservoirs of water and plenty of water rights. The Tudor style home was built in 1985 with 11 bedrooms and 13 bathrooms.

Now that you’ve picked your jaw off your chest, the flip side of this is my poor buyer who wants to purchase their first home and doesn’t bring home a lot of money each month. Right now, the WFRMLS reports only TWO homes listed under $250,000 in the entire Salt Lake County area, eight homes listed between $251,000 to $300,000. Given that home prices have gone up a minimum of 20% over the last year I’m afraid if we don’t fine something soon he will be priced out of the market…forever!

In a time when homes in Utah and around many, many, parts of the country are selling for unheard of prices it’s interesting to go back in time when Salt Lake City was so much smaller and when a home might cost $100 or a trade of a few good horses.  Utah was organized as a territory in 1850 and admitted as a state in 1986. According to the 1900 Census (only the 12^th Census ever done) the population of the state was 276,749. This was an increase of 33.1% over the Census done ten years earlier, and comments in the report stated: “A small portion of this increase is due to the fact that there were 2,848 Indians and 26 other persons, or a total of 2,874 persons, on Indian reservations in Utah.”

Indigenous peoples have lived in the area known as the state of Utah for thousands of years and felt that no one could own land, that everyone owned the land.  The first peoples were Anasazi who melded into the tribes of Utes, Goshutes, Paiutes, Shoshone, and Navajo. Each occupied a different region within the state, many of which regions extend across borders into other states. In the 2010 census, there were a total of 32,927 American Indian and Alaska Natives living within Utah’s boundaries, which totaled to 1.19% of the total population of our state. There are 326 Indian reservations in the United States and eight in Utah which include: Confederated Tribes of the Goshute Reservation, Northwestern Band of the Shoshone Nation, Paiute Indian Tribe of Utah, Skull Valley Indian Reservation, Timpanog Tribe, Uintah and Ouray Indian Reservation, Ute Indian Tribe of the Uintah and Ouray Reservation and Ute Mountain Ute Tribe. Census data show that the largest tribal communities indigenous to Utah are the Navajo Nation, Ute Indian Tribe, and Paiute Indian Tribe of Utah.

The Blackfeet tribe were common in and around Idaho, and Crowfoot, their chief in 1885 said: “Our land is more valuable than your money.  It will last forever.  It will not even perish by the flames of fire.  As the sun shines and the waters flow, this land will be here to give life to men and animals.  We cannot sell the lives of men and animals; therefore, we cannot sell this land.  It was put here for us by the Great Spirit, and we cannot sell it because it does not belong to us.  You can count your money and burn it within the nod of a buffalo’s head, but only the great Spirit can count the grains of sand and the blades of grass of these plains.  As a present to you, we will give you anything we have that you can take with you, but the land, never.”

I heard of a man buying his Avenues home in the 1800’s for the price of his only suit of clothes. Now I work with people willing to give up everything just to own a home, a roof over their head. What’s our future, Utah?

 

When you can’t find a new home to buy it may be worth your while to remodel the won you own. Granted you may pay extreme amounts for lumber and wait months for appliances, but every dime you drop into upgrades should give you a great return on your investment when you sell.  And doing so will make you happier in your new space!  Remodeling magazine has released the key remodeling trends specific to Salt Lake City that will give you a great return on your sweat equity or your cost of hiring contractors. Here’s what’s top of the list:

-Replacing garage doors to electric and /or doors with windows that let in ambient light.

-Adding stone veneer to the exterior of your home’s street-facing façade to give it a different look, using river rock or something local.

-Updating exterior siding. Old siding is wide, sometimes made of asbestos or painted aluminum that chips and fades. Upgrade to less wide planks in more modern materials.

-Minor kitchen remodels. Replace cabinet and drawer fronts if the boxes are of good quality. Update your appliances, sink and fixtures. Or simply add ‘roll outs’ to your cabinets-rolling tracks to pull out to see everything in the cabinet.

-New front door! There are so many choices these days in front entry styles made from wood and/or metal. Make sure you replace the casing around the door and update your locks to a Nest-like system that you can control when you’re not home.

-New roof and add/update your insulation. Plus, instead of large expensive skylights, add solar tubes for ambient light. These tubes are great for when you get up in the middle of the night and must use the toilet but don’t want to flick on bright light.

Now that warmer temperatures are here there are inexpensive things you can do yourself to add sweat equity to your home. I generally suggest these for outside and inside:

-New larger numbers on the exterior of your home. Generally I find that signals to people that you’ve updated and paid attention to details.

-Some type of security camera system and door locks. You can buy these now from discount stores like Costco.

-Closet organizers. One bar to hold your hanged clothes is stupid. Break up that space with at least two bars and maybe but up a found set of drawers to add for extra storage.

-Re-caulking bathroom tile/tubs. New bath fixtures can be inexpensive. Cabinet/drawer pulls can be handmade and artsy or you can buy simple modern ones on the web.

-Wallpaper is back from the grave and is in great designs and colors. Do one wall in your home say in the dining, rec room, kitchen or bedroom as an accent to make your home pop.

-Updating light fixtures. New LED fixtures for your ceiling can cost $30. You don’t ever replace the light bulbs, you replace the fixture several years down the road to the newest design in LED fixtures. Easy peasy!