The last time the Utah property market fell through the bottom of homeowners’ worst dreams was back in the 1980’s, which period saw a wave of foreclosures not unlike the one that American families are currently experiencing.
I was chatting with a realtor from Provo named Eric Adams the other day, and I experienced déjà vu with a vengeance as he told me tales of banks shoving their foreclosed real estate out into the Utah market like there was no tomorrow, and regardless of the damage they were doing to an already sinking market. He reckons that the current debacle could be worse – in fact in 25 years of business he had never seen so many for sales signs in Provo.
During the period July 2009 and March 2010 approximately 1.5% of all Utah family homes were listed as reo’s, having been foreclosed by banks and failed to sell on auction. Some of the area’s previously fast growing areas contributed to the 1,967 homes behind the 1.5%. These included:
Lehi 285
Provo 224
Saratoga Springs 216
Orem 211
Eagle Mountain 184
Spanish Fork 118
Highland 113
Pleasant Grove 109
My Realtor friend from Provo reckons the banks have got smarter since the 1980’s – whereas previously they had just shoved everything out into the market, this time they are sitting on inventories in the hope of manipulating prices.
Banks understand this time that pushing prices down puts more of their clients underwater too, about the worst thing a banking manager needs on top of current other headaches. Notwithstanding this, they are still pricing their for-sale inventories to sell in 90 days.
This indicates that Utah lenders are trying to strike a balance between their own interests and “being fair”. They’ve also picked up a few hot tips down at used car lots and are offering incentives including re-decorating packages, waived closing costs, carpets, new appliances, and even more to get unwanted property sold, Some are even including 2 year warranties on the reo real estate they sell.
These incentives are finding favor with Utah buyers who welcome sweeteners on top of lower prices. Local buyer Colin Johnson was one of the lucky ones – after a year of searching for his first house he found his dream come true in the form of a bargain freshly painted home with brand new carpets too. He feels he got a better deal than what’s median on the market – no doubt there’s one slightly happier bank manager out there too.
Market forces are beginning to balance out again. Banks becoming more responsible again, helping ordinary American families settle in new homes.
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