In The News…

Park City Home Prices Continue To Hold Their Value
During First Half Of 2008

FOR IMMEDIATE RELEASE
31 July 2008  

For further information:
Tyler Richardson, President
435.640.3588 (cell)
tyler@asktyler.com

Lincoln Calder, President Elect
435.901.2696
lincoln@lincolncalder.com

Sharon Woodbury, Chief Executive Officer
435.200.6900
woodbury@ParkCityRealtors.com
 

31 July 2008 (Park City) - The Park City Board of REALTORS® reported today that the median sales price of a single-family home in the greater Park City area at mid-year continued to hold its value at $650,000, down just 1 percent compared to a median sales price of $655,000 a year ago. Median values are based on sales transactions reported to the Park City Board of REALTORS® Multiple Listing Service system.

In fact, many areas throughout the greater Park City region - which includes Summit and Wasatch counties - saw stable or even increases in median sales prices during the first six months of 2008. For instance, at mid-year, the median single-family home price in Park City proper climbed to $1.9 million, up 14 percent compared to $1.7 million during the same period last year. In the Heber Valley, the median home price rose to $349,000, up 3 percent compared to $340,000 at mid-year in 2007.
 
Other areas saw home prices fall in the first half of 2008. In the Snyderville Basin, home prices fell to $700,000, down 8 percent compared to $760,000 a year earlier. In the Kamas Valley, home prices during the first half of 2008 decreased to $322,900, down 5 percent compared to $338,795 last year.
 
"Our prices remain relatively stable because of the overall financial strength of our buyers and sellers," said Tyler Richardson, president of the Park City Board of REALTORS®. "Even though Park City is weathering the national housing downturn very well, selling a home today has become very competitive. Because all real estate is local and prices vary widely throughout the Park City area, home sellers should contact a local Park City REALTOR® for a comprehensive analysis of what pricing points will work for their properties."
 
SALES: Single-family home sales in the greater Park City area for the six months ended June 30 dropped to 244 transactions, down 45 percent compared to 445 sales during the same period last year.
 
According to Lawrence Yun, chief economist for the National Association of REALTORS®, "there are people with the capacity to buy a home, yet they are not willing to jump into the market because of fear." Those fears were compounded by last year's sub prime crisis, Yun said in a June speech to Park City REALTORS®. "I think the pendulum has swung too far the other way and now we are in a period of excessive pessimism."
 
Even amid extreme national pessimism, the greater Park City area is witnessing few short sales and foreclosures, according to Richardson. "We have seen an increase of inventory giving buyers more choices than they have seen in years," Richardson said  "With more inventory on the market some sellers are adjusting their pricing to attract buyers."
 
According to the most recent data by the Mortgage Bankers Association, Utah continues to have one of the lowest foreclosure rates in the nation. In fact, Utah's foreclosure rate at 1 percent is less than half the national foreclosure rate of 2.47 percent. Only six states have a lower foreclosure rate than Utah, according to the MBA report.
 
CONDOMINIUMS: In the first six months of 2008, condominium prices as reported by the Park City Board of REALTORS® Multiple Listing Service system fell to $530,335, down 4 percent compared to $550,000 in the same period in 2007. Sales of condominiums fell to 280 transactions in the first half of 2008, down 34 percent compared to 425 sales a year ago.

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National Economist Lawrence Yun Predicts Strong House-Price Gains For Western Resort Properties
 
FOR IMMEDIATE RELEASE
Third-Quarter - 6 June 2008
 
For further information:
Dennis Hanlon, President
435.640.5851
dhanlon532@aol.com

6 June 2008 (Park City) - Overly optimistic exuberance led to one of the costliest mortgage write-downs in U.S. history over the past year - a crisis which rocked world financial markets and dampened home sales throughout the country.

However, according to Lawrence Yun, chief economist for the National Association of REALTORS®, top resort destinations in the Rocky Mountain Westcould easily see house-price gains as much as 30 percent to 50 percent over the next five years.
 
Yun, the keynote speaker at the June semi-annual conference of the Rocky Mountain Resort Alliance (RMRA), an association representing the boards of REALTORS® of 11 Western premier destination ski resorts, said mountain resort properties, like those in Aspen, Colo., Park City, Utah, and Jackson Hole, Wyo., are not as prone to subprime loan exposure like other residential areas.
 
"I think the pendulum has actually swung way too far the other way," Yun said at the conference, which was held in Park City. "In other words, there are people with the capacity to buy a home yet they are not willing to jump into the market because of fear. The sentiment among second-home buyers is that it is not a good time to buy right now, but buyers in it for the long-term always come out ahead."
 
Dennis Hanlon, founder and president of RMRA, said in spite of the current housing climate, high-end properties throughout the West are still selling. "People are still buying second homes and vacation homes. Typically these transactions are cash deals and do not involve financing."
 
Helping to boost second-home sales are current migration trends, Yun said, which show that wealthy baby boomers and others are leaving states like California, New Jersey and New York and moving to states in the Rocky Mountain region. In fact, 63 percent of baby boomers said they want to retire in a rural or small town setting - areas that include mountain resort settings.
 
In addition, Yun said the United States may encounter a housing shortage if new residential building construction continues at current low levels. Yun said that less than 1 million new homes are being built annually, but that 1.5 million new households are being formed each year, creating a gap of new housing inventory.
 
What's ahead? Yun believes that the country will formally avoid a recession and that rising subprime defaults should peak by the middle of 2009.
 
Going forward, because subprime lending has disappeared from the market new homebuyers are not exposed to the same dangers. Yun added that more than one-third of all U.S. homeowners (35 percent) own their home free and clear. Factoring in all homes, today's foreclosures rates reported by the media are actually one-third lower because there is no risk from free and clear homes.

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Today’s Interest Rates Mean Opportunity
Rick J. Klein, Wells Fargo Home Mortgage
Rick.Klein@wellsfargo.com

Headlines continue to bombard us with negative stories regarding the housing and mortgage markets.  Yet, there is a window of opportunity with low interest rates.

The chart below shows mortgage rates are still relatively low from a historical perspective.  In fact, rates are considerably lower when compared to eight years ago when the 30-year fixed rate went above 8%.  

	2008	2009
Sales Price	$600,000	$540,000
Loan Amount (80% LTV)	$480,000	$432,000
Rate	6%	7%
P&I Payment	$2,877.84	$2,874.11

Even more important, the stimulus package passed by Congress earlier this year allows for "jumbo conforming" loans (loans between $417,000 and $729,750) to be securitized by Fannie Mae or Freddie Mac.  This means that loans in this amount range really are near historic lows.

An example of this may clarify the benefit of purchasing while rates are low.  Many buyers believe home prices will fall over the next year, so they to decide wait and see.  Now assume rates increase by 1% over the next 12 months (a conservative assumption, especially for jumbo conforming loans).  The example below demonstrates the impact of a 1% increase in rates will require a full 10% decrease in home prices to avoid an increase in the monthly payment.

At present, the legislation authorizing Fannie Mae and Freddie Mac to purchase or securitize these jumbo conforming loans is scheduled to end on December 31, 2008.  If Congress does not extend this authorization, this may well be a limited window of opportunity.   

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Utah housing market faring well; tax credit may help even more
June 6th, 2008 @ 5:04pm
KSL TV5, Keith McCord reporting

Another proposal that President Bush will consider soon is a plan designed to stimulate the real estate industry. Congress is working on a "home buyer tax credit" plan to jump-start housing sales.

It's not finalized yet, but if the president signs off on it, it would give first-time home buyers a tax credit of $7,500. The idea is to reduce the huge inventory of houses that are currently for sale across the nation -- around 4 million at the moment.

This was just one of the topics discussed in Park City today by the chief economist for the National Association of Realtors. Hundreds of real estate agents and ski resort operators from around the Intermountain West came to hear what Lawrence Yun had to say about the health of the real estate industry.

As the chief economist, Yun says although the industry is at a 10-year low in terms of sales with a large inventory, the signs point to improving conditions in the second half of this year and into 2009.

Yun also says, unlike other parts of the country, the Rocky Mountain region will improve first. "People are moving into the region; far more coming in than moving out. That's always positive. That creates additional demand for housing, and anytime there's demand for housing, that makes the market much more healthy," he said.

Yun also says low interest rates, fixing the sub-prime loan mess and a general improvement in the economy will also bring buyers back. Plus, he says there are a lot of people still "sitting on the fence" wondering when to get into the market.

"I don't think that's a good strategy from a buyer's point of view. They have the advantage. The inventories are plentiful. They have more negotiating power," Yun said.

Yun says Utah's home prices have taken a breather in the past year, but he says when the fence-sitters get moving, that will change significantly. "But five years from now, the market will be very healthy locally, and home prices could be 30 to 50 percent higher than what they are now," he said.

One sector of the real estate industry that's still vibrant is resort areas. People with money who want a second home are still buying. The numbers in the greater Park City area confirm that.

"We have been quite different from the rest of the country. Our prices over the first quarter have been very stable compared to the first quarter of 2007," said Tyler Richardson, president of the Park City Board of Realtors.

Every economist has a crystal ball it seems, but many we've spoken to over the months say Utah and our neighboring states are in position to fare much better and recover more quickly than the rest of the country.

Regarding that "home buyer tax credit," Congress tried it back in the 1970s and it did light a fire under the market.

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Hope for housing in Utah
Analyst says real estate faring better than in other U.S. states

By Jasen Lee, Deseret News
Published: Saturday, June 7, 2008 12:03 a.m. MDT

Despite the housing-market difficulties around the country and in some areas of Utah, a national real-estate analyst is optimistic about the present and future performance of the Beehive State's market.
Speaking Friday to an audience at the Rocky Mountain Resort Alliance conference in Park City, National Association of Realtors chief economist Lawrence Yun said that Utah's housing situation is much better than the circumstances in many other states.

"The state of Utah is fundamentally healthier than other markets," Yun said. "In the state as a whole, prices are not falling, though in certain neighborhoods, prices may be declining."

Subprime loans have been a key component of the national housing downturn, even though they are a small percentage of Utah's and the nation's overall loan portfolio, he said.

Yun said that subprime borrowers make up about 10 percent of all homeowners nationwide, but represent approximately half of all foreclosures. In Utah, 23 percent of mortgage holders are subprime borrowers, but they account for 4.84 percent of foreclosures.

Wells Fargo economist Kelly Matthews, in an interview, agreed with Yun's assessment of the nation's housing market for the most part, but Matthews believes subprime mortgages account for 25 percent to 33 percent of foreclosures nationwide.

Regarding the possibility of a sharp increase in foreclosures similar to those in other national markets, Yun said that as long as Utah's economy continues to generate jobs, it should minimize any fallout from the subprime lending debacle.
"The second factor to look for is home prices, which are holding on very well in Utah," Yun said. If home prices stabilize and do not decline, that will lessen any foreclosure pressures.

"Prices are holding on much better in Utah, hence lessening the foreclosure pressure," he said. "Furthermore, there is strong job growth in Utah compared to the rest of the country."

Yun, along with Matthews, said the strong employment market is what enables the state's housing market and economy to remain stable.

"We have and continue to have a better economy than Arizona or Nevada or Southern California," Matthews said. "We didn't create as big a bubble, so we didn't have as much increase going up and don't have to have as much pain or adjustment coming down as those other areas."

Yun said the future looks bright for Utah because of the number of people who are migrating into the state, including baby boomers wanting to spend their golden years in some of Utah's resort towns.

"We see some trends of wealthier retirees wanting to move to Utah, and that's another positive for the state," he said. "Fundamentally, the long term, with people migrating into Utah and job creation being very solid, is very good."

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Park City Median Home Prices Remain Stable In The First Quarter
PRESS RELEASE 

25 April 2008 (Park City) - The most exclusive real estate in Utah continued to hold its value as the median price of a single-family home sold in the greater Park City area, which includes Summit and Wasatch counties, in the first quarter remained at $649,140, nearly unchanged compared to a median price of $650,000 in the first quarter of 2007, according to a report today by the Park City Board of REALTORS.^®

Within the city limits of Park City, the median home price was $1.76 million for single-family homes, down 11 percent compared to $1.98 million a year earlier in the same quarter.  The median single-family home price in the Snyderville Basin was $742,450, down 4 percent from $771,000 in the first quarter of 2007. In the Kamas Valley, the median home price was $285,000, down 9 percent from $314,450 a year ago. Homes in the Heber Valley, however, saw median prices increase 9 percent to $359,900 compared to $329,000 a year ago.

"We have seen price adjustments going on in the market and sellers need to be realistic in their pricing," said Tyler Richardson, president of the Park City Board of REALTORS.^® "For buyers, it shows there are some good values out there."

Richardson added that having only one quarter of statistics gives limited information on specific market areas. "I would urge buyers and sellers to contact a local Park City REALTOR® to get a full market analysis on what is happening in their area of interest," he said.

The median price of condominiums sold in the first quarter in Park City proper climbed 13 percent to $1.05 million compared to $925,000 in the first quarter of 2007. This rise was largely due to closings of newly constructed high-end condos with ski-in/ski-out access.  Richardson noted that, "Location and lifestyle still hold sway, showing, once again, that buyers come to Park City for lifestyle reasons rather than purely economic reasons."

Sales of single-family homes in the greater Park City area, which includes Summit and Wasatch counties, totaled 113 sales in the first quarter, compared to 209 sales in the first quarter of 2007. Fewer sales mean sellers need to be flexible in pricing their properties.

Condominium sales in the first quarter in the greater Park City area totaled 136 transactions compared to 247 sales a year ago. The median condo sales price in the first quarter was $533,900, down from $550,000 in the same period last year.

"There is an opportunity for buyers to find a great value, but they need to work closely with a local Park City REALTOR^® to do so," Richardson said.  "There has never been a better time for locals to make a lateral move within our market.  It is a good time for a family to move up to a larger home, an out-of-town family to move into town or for empty nesters to scale down to a smaller home or condo.  With interest rates still low and the temporary increased mortgage loan limits, it is even more of a good time to make a move."

The good news for both home buyers and home sellers is that conforming loan limits have been raised to $729,750 for properties in Summit County, considered a high-cost area. The new loan limits, part of an economic stimulus package signed by President George W. Bush in February, are temporary and will expire at the end of this year.

According to a leading Park City lender, "Not all counties received this higher increase.  A conventional, conforming loan today (loan amounts less than or equal to $417,000) with standard closing fees would carry about a 6 percent interest rate on a 30-year-fixed. A jumbo loan would be about 7.25 percent. The agency, high-balance conforming loan (loans at $417,000 - $729,750) would be about 6.5 percent."

The Park City Board of REALTORS® also reported that along the Wasatch Back, sales of single-family homes in the Heber Valley were down 44 percent - 41 transactions in the first quarter of 2007 compared to 23 sales in this year's first quarter. In the Kamas Valley, there were seven sales in the first quarter compared to 20 sales a year earlier. 

"Our area market as a whole has seen no change in the median price from the first quarter of last year to this year's first quarter," Richardson said. "Park City real estate is weathering the storm very well. While the volume of transactions is down we are not seeing the dramatic fall in prices and only a slight increase in foreclosures. In general most of our sellers are strong and have the wherewithal to hold through during a weaker market, helping price stability."

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Why Now Is a Smart Time to Buy
RISMEDIA - http://rismedia.com
Posted By Paige On March 18, 2008 @ 3:32 pm

RISMEDIA, March 19, 2008-Considering all of the negative press the housing market received in late 2007, it's more important than ever for buyers to separate fact from fiction when deciding on a time to buy a home. This report is intended to help home buyers assess the facts of the real estate market objectively.

About Inventory
FACT: The housing market is undergoing a natural cyclical correction.

It's impossible to ignore the ongoing news surrounding the downturn of the housing cycle. The recent "housing boom," which lasted from 2001 to 2005, was caused by low interest rates and a rapid increase in property valuations, resulting in high numbers of renters opting to buy. Three factors caused this decade's housing boom to spiral upward:

1)   A run-up in home-price valuations that spurred a high sense of urgency in home buying and selling.
2)  Poor lending practices, which caused many home buyers to secure loans that they ultimately couldn't afford over the long term.
3)  Speculative purchases of homes also increased, with buyers investing in real estate with the hope of a quick return on investment.

Like the dot-com bust, the housing market has begun to correct itself after a number of years of unwise purchasing, but unlike what the media would have us believe, a correction in the housing market doesn't equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.  

The National Association of Realtors' chief economist, Lawrence Yun, projects that nationally, the "median eXisting-home price will drop about 1.7% this year. This is a small, minor adjustment after a strong run-up in housing prices."

True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002.  

However, with homes taking longer to sell, the number of homes on the market has grown. In markets like California and Arizona where homes are taking much longer to sell than the ll-month national average, this has caused a glut in the marketplace.

In the Pacific Northwest, where the inventory of homes on the market ranges from seven to 10.5 ·months as of November 2007, this equates to good news for buyers who have more homes at more price ranges from which to choose.

About Mortgages
FACT: Low mortgage rates give buyers more house for their dollar.

With the 30-year fixed rate hovering between 6-7%-a 45-year low-qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment.  For example, today if a buyer secured a 6.5% interest rate on a 30-year fixed loan for a $300,000 home (with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25%. In 1982, when the 30-year fixed rate was 14.6%, the same payment would have bought a house worth only $151,657.

FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.

The media has been focusing on the hardest-hit areas of the country that have seen a dramatic downturn In the market: California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average.

Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to foreclose on loans. Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer home buyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate.

Washington has seen one in 1,072 homes in foreclosure, and Oregon and Idaho have one in 1,275 and 893, respectively.

FACT: Subprime borrowers get a reality check.

Then there are the problems that are affecting subprime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier subprime loans to fund the American dream.  

But, again, unlike the media's portrayal, the reality is that subprime loans comprise only 9% of total loans nationwide and of those 9%, less than 11% of those subprime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to payoff their subprime loans.  

Real Estate Cycles and Economics
FACT: Over the long-term, real estate has always appreciated in value.

The continuing appreciation of homes in the Northwest is not an anomaly. Real estate has always been one of the most solid investments in the U.S, because, after all, people always need a place to live.  Real estate has less  volatility than the stock market and over the historical long-term it remains a guaranteed return-on-investment. Take this example from NAR's Yun: If a buyer were to put down $10,000 for a down payment on a "typically priced home in the United States at a typical appreciation rate of 5%...(he/she) would see a return of $110,300 after 10 years. The same $10,000 invested in the stock market appreciating 10% annually will result in $2.3,600."

As history has shown, for those who choose to keep their home for six to 10 years (and not flip for a quick profit) real estate investments do payoff, and payoff well. In fact, what we're seeing now is a repeat of a housing cycle we've seen before. In the early 1980s and 1990s, some areas of the country experienced the worst downturn they had seen in the last 25 years, which were caused by localized economic weaknesses and loss of jobs while on a nationwide average, others, including the Pacific Northwest were barely affected at all. But even those areas that were hit the hardest in the past experienced a historic uptick in prices, and then a continuing long-term appreciation.

Excerpted from a January 2008 Report from John L. Scott Real Estate
For more information, please visit [1] www.johnlscott.com.
RISMedia welcomes your questions and comments.
Send your e-mail to: realestatemagazinefeedback@rismedia.com 

Second Home Buyers Accounted for One-Third of Transactions in 2007
REALTOR.org Report
For more information, contact:
Walter Molony, 202-383-1177, wmolony@realtors.org

WASHINGTON, March 28, 2008 - The combined total of vacation- and investment-home sales declined with the overall market in 2007, but still accounted for 33 percent of all existing- and new-home sales, which is close to historic norms, according to the National Association of Realtors®.  

The market share of homes purchased for investment last year was 21 percent, down from 22 percent in 2006, while another 12 percent were vacation homes, compared with a 14 percent market share in 2006. The total share of second homes declined from 36 percent of transactions in 2006.  NAR's annual Investment and Vacation Home Buyers Survey shows vacation-home sales dropped 30.6 percent to 740,000 in 2007 from a record 1.07 million in 2006, while investment-home sales fell 18.1 percent to 1.35 million last year from 1.65 million in 2006. At the same time, primary residence sales declined 10.0 percent to 4.34 million in 2007 from 4.82 million in 2006. 

Lawrence Yun, NAR chief economist, said the findings suggest different cycles for each of the sectors over the past two years. "Investment-home sales declined sharply in 2006 as speculators disappeared, leaving the market to serious buyers, with the pattern continuing in 2007," he said. "Vacation-home sales rose to a new record in 2006 because there was a pent-up demand from buyers who couldn't find a property as a result of tight supplies in preceding years."

The overall sales decline in 2007 resulted from a combination of factors.  "Certainly, second homes are discretionary purchases and there is a natural tendency to pull back from big-ticket items in periods of uncertainty," Yun said. "The other factor is the disruption in the mortgage market, with a significant tightening of credit during the second half of 2007. Some buyers simply adopted a wait-and-see attitude." 

Yun said lifestyle factors and strong demographics remain positive for the vacation home market. "Investment considerations are secondary for vacation-home buyers, so there is some dormant underlying demand," he said. "A peak of population is moving through the prime years for buying recreational property. It is welcoming to see investment sales returning to pre-boom sales activity."

The median price of a vacation home was $195,000 in 2007, down 2.5 percent from $200,000 in 2006. The typical investment property cost $150,000 last year, unchanged from 2006.  

Fifty-nine percent of vacation homes purchased in 2007 were detached single-family homes, 29 percent condos, 7 percent townhouses or row-houses, and 5 percent other. in 2006, single family homes accounted for 67 percent of vacation-home sales, while condos were 21 percent.

There were no significant changes in investment housing types. Sixty-one percent of investment homes purchased in 2007 were detached single family-homes, 20 percent condos, 11 percent townhouses or row-houses, and 8 percent other. Twenty-eight percent of vacation-home buyers paid cash for their property, as did 35 percent of investment buyers.  Sixty-five percent of vacation home buyers and 71 percent of investment home buyers purchased existing homes, while the remainder purchased new homes. 

The typical vacation-home buyer in 2007 was 46 years old, had a median household income of $99,100, and purchased a property that was a median of 287 miles from their primary residence.  

In listing the reasons for purchasing a vacation home, 84 percent of buyers wanted to use the home for vacation or as a family retreat; 30 percent to use as a primary residence in the future; 26 percent to diversify investments; 25 percent to rent to others; 16 percent for the tax benefits; 14 percent for use by a family member, friend or relative; and 6 percent because they had extra money to spend.  

Last year, 19 percent of vacation homes were purchased in the Northeast, 16 percent in the Midwest, 41 percent in the South and 24 percent in the West. In terms of location, 30 percent of vacation homes were purchased in rural areas, 20 percent in resorts, 20 percent in a suburb and 14 percent in an urban area or central city. 

Investment-home buyers last year had a median age of 42, earned an income of $92,900, and bought a home that was relatively close to their primary residence - a median distance of 27 miles.  When asked about the most important reasons for their purchase of an investment home, 51 percent said to provide rental income; 39 percent to diversify investments; 21 percent to use for vacations or as a family retreat; 16 percent for use by a family member, friend or relative; 11 percent for tax benefits; 10 percent to use as a primary residence in the future; and 4 percent because they had extra money to spend. 

Twenty-three percent of investment properties purchased in 2007 were in the Northeast, 19 percent in the Midwest, 38 percent in the South and 21 percent in the West. 

Thirty-nine percent of investment homes were purchased in a suburb and another 20 percent in an urban or central city area, 21 percent in a small town, 15 percent in a rural area, and 5 percent in a resort area.

Vacation-home buyers plan to keep their property for a median of 10 years; 38 percent plan to keep their vacation home for 11 years or more.  Investment buyers plan to hold their property for a median of four years, with 29 percent planning to keep for six years or more. However, 10 percent of investment buyers plan to sell in one year or less. 

Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 59 percent of primary residence buyers. Forty-four percent of vacation-home buyers and 57 percent of investment buyers said they were likely to purchase another property within two years.  

NAR's 2007 Investment and Vacation Home Buyers Survey, conducted in March 2008, includes answers from 1,965 usable responses. The survey controlled for age and income, based on information from the larger 2007 National Association of Realtors® Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents. 

The 2007 Investment and Vacation Home Buyers Survey can be ordered by calling 800/874-6500, or online at www.realtor.org/newresearch. The cost is $50 for NAR members and $125 for non-members. 

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries. 

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Utah 9th for 'pro-business, ' 2nd in 'most livable' ranking
Utah has been named in a pair of top 10 rankings this month.

From the Deseret News Saturday April 12, 2008  Deseret News Article

The state was second in the "Most Livable State" rankings compiled by CQ Press, a division of Congressional Quarterly. Last year, Utah was fourth.

The rankings are based on 44 factors that reflect a state's basic quality of life. Each category is averaged to yield a final score to determine a state's "livability rating."

Utah also finished ninth in a list of "pro-business states" in a report published by Chicago-based Pollina Corporate Real Estate. The study examines 29 factors that focus on job creation and retention efforts of the federal government and all 50 state governments.

North Carolina led the Pollina rankings, while California was 50th

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Foreign buyers fuel second-home sales, while U.S. buyers hold back
Report finds 30.6% drop in overall sales of vacation homes in 2007
BY GLENN ROBERTS JR., MONDAY, MARCH 31, 2008.

Sales of vacation properties fell 30.6 percent in 2007 compared to the prior year, with investment-property purchases down 18.1 percent, according to an Investment and Vacation Home Buyers Survey report released by the National Association of Realtors. 

Total sales of new and resale homes used as primary residences, by comparison, dropped 10 percent from 2006 to 2007, survey results revealed.

Based on responses from 1,965 second-home buyers, the survey concludes that investment-property purchases accounted for 21 percent of total home sales in 2007, down from 22 percent in 2006; while purchases of vacation properties accounted for 12 percent of all home sales in 2007, down from 14 percent in 2006. The survey was conducted this month and controlled for age and income. 

Real estate professionals tell Inman News that foreign buyers are taking advantage of lopsided currency values against the U.S. dollar in some market areas and are propping up second-home sales while many U.S. buyers are taking a wait-and-see approach. Markets with luxury properties can be more immune to the slowdown in second-home sales, real estate professionals also report.  

Total sales of resale homes, including sales of single-family homes and condos and co-ops, dropped 12.8 percent from 2006 to 2007, NAR has reported, to 6.48 million. And sales of new single-family homes dropped 26.4 percent year-over-year in 2007, falling to 774,000.

There were an estimated 740,000 sales of vacation properties, 1.35 million sales of investment properties and 4.34 million sales of primary residences in 2007, according to the survey.  

The median sales price of vacation properties was estimated at $195,000 in 2007, down 2.5 percent from a year earlier, while the median sales price of investment properties remained flat at $150,000 compared to the prior year, according to the survey. By comparison, the median U.S. resale home price was $218,900 in 2007, down 1.4 percent compared to 2006. And the median U.S. new-home price was $247,300 in 2007, up . 0.3 percent compared to the prior year.

In last year's second-home survey, NAR reported that vacation-home sales grew 4.7 percent in 2006 to a record 1.07 million, while investment-home sales fell 28.9 percent to 1.65 million. That followed a record 2.32 million investment-home purchases in 2005.

Second-home purchases represented an estimated 40 percent share of total home sales in 2005, compared with 36 percent in 2004 and 2006, and 33 percent in 2007.

Heather Joubran, a Realtor for REIMAX Central Realty in Lake Mary, Fla., an Orlando suburb, said U.S. residents have definitely scaled back on second-home purchases in the Orlando area, but buyers from the United Kingdom, Eastern Europe and Central America "are gobbling up second homes at a pretty substantial rate."

Some of the foreign buyers are particularly eyeing foreclosure properties, and coupled with the power of their currencies against the U.S. dollar, ''they are picking them up for pennies on the dollar," she said.  Finding properties for half the price that they were originally listed at is not uncommon these days, she said. 

While U.S. buyers of second homes may view the properties as an eventual retirement home, foreign buyers more typically are looking to rent out the properties for a profit. Foreign buyers are more likely to engage in cash transactions than U.S. buyers, she said.

While Joubran said that sales in the Orlando market are not substantially off from last year's sales, the inventory is huge. There is an estimated 34-month supply of for-sale home inventory, she said, which means that it could take nearly three years to exhaust the current supply of homes given the sales rate and large number of properties on the market. 

The high inventory and foreclosure rates in the region "hasn't helped bur pricing," she said. That has made U.S. buyers particularly reluctant.

"They just won't make a commitment; they are stuck on the fence," she said, adding that they are worried about what will happen if they buy now and the prices drop further. "Nobody can time (the bottom) in real estate." There are deals aplenty, though, she said, citing examples of properties that had earlier sold for $350,000 now reduced to $200,000.

In the Miami area, home prices have dropped about 20 percent, but they may still be highly inflated due in part to rampant speculation and incidents of fraud, said Jack McCabe, of McCabe Research and Consulting, a real estate consulting firm based in southeast Florida.

The influx of foreign buyers - which he expects to rise in the coming months, may lead to an overall statistical increase in sales in that market area. And while real estate agents may cheer such numbers, McCabe said that they may actually reflect a "false bottom" for the market, as U.S. buyers are not lining up to return to the market. ''The international buyers definitely are the largest buyer segment right now in Florida."

Out-of-state residents who typically flock to vacation-home markets in Florida may have much bigger worries these days - like job losses and a tough economy, McCabe said. Florida has been a popular second-home destination for Manhattanites, and that may dry up a bit with the current crises on Wall Street, he said. "I think we're definitely going to see a continued decline in sales to Northeasterners, to New Yorkers especially to those in Manhattan. This is the year that Main Street catches up with Wall Street." 

Second-home buyers are among the throngs of upset condo buyers who are now signing on to lawsuits in an effort to withdraw from their initial deposits that they placed on the units when the market was booming. And some lenders have essentially "blacklisted some condo buildings for mortgage loans because of declining market values," he said. 

McCabe said that until prices drop more in Florida, he expects U.S. second-home buyers may look abroad to developments in Costa Rica, Belize or Mexico, he said. "I see a lot more opportunity for second homes that are out of the country." 

In Summit County, Colo., a popular ski destination, Realtor Joanne Hanson said that the second-home market is still going strong for properties at the high end and low end of the market, though there has been slowing in sales for mid-range properties. 

Most of the buyers that Hanson works with are in-state buyers from the Denver and Colorado Springs market areas, she said, as Summit County is within driving distance. 

She said that she just closed a sale on a $2.3 million property. And at the other end of the price spectrum, she recently listed a condo for $359,000 that has had five showings in the past two days. While total transactions are down, the numbers have more to do with a decline in inventory than a decline in buyers, she said. 

The July through October sales will truly show how the market is faring this year, she said, as those are typically the most active sales months in the region.

"I'm counseling sellers to be realistic when they price - not to get too ambitious in how much money they get," she said. There are typically a small share of foreclosures in the market area, and foreclosures haven't (increased) much in her market area, she also said. But she has seen more owners motivated to sell their second homes in the area because the housing markets where their primary residences are located aren't faring so well, she said - "they need to cash out."

According to the NAR survey, the median age of vacation-home buyers is 46, compared with 42 for investment-property buyers and 38 for purchasers of primary residences. And the median income for vacation-home buyers is $99,100, compared with $92,900 for investment-property purchasers and $71,700 for buyers of primary residences.  

Fifty-nine percent of vacation homes purchased in 2007 were detached single-family homes, 29 percent condos, 7 percent townhouses or row houses, and 5 percent were other types of homes.  In 2006, single family homes accounted for 67 percent of vacation-home sales, while condos were 21 percent, NAR reported in the survey results. 

Sixty-one percent of investment homes purchased in 2007 were detached single-family homes; 20 percent were condos; 11 percent were townhouses or row houses; and 8 percent were other. Twenty-eight percent of vacation-home buyers paid cash for their property, and 35 percent of investment buyers paid cash for their properties. 

Lawrence Yun, NAR chief economist, noted in a statement that "second homes are discretionary purchases and there is a natural tendency to pull back from big-ticket items in periods of uncertainty." Another factor. he said, "is the disruption in the mortgage market, with a significant tightening of credit during the second half of 2007. Some buyers simply adopted a wait-and-see attitude."

According to the report, 84 percent of buyers stated that they wanted to use the home for vacation or as a family retreat; 30 percent to use as a primary residence in the future; 26 percent to diversify investments; 25 percent to rent to others; 16 percent for the tax benefits; 14 percent for use by a family member, friend or relative; and 6 percent because they had extra money to spend.

Nineteen percent of vacation homes purchased last year were in the Northeast, 16 percent in the Midwest, 41 percent in the South and 24 percent in the West, the report revealed. Thirty percent of vacation homes were purchased in rural areas, 20 percent in resorts, 20 percent in a subUrb, and 14 percent in an urban area or central city.

When asked about the most important reasons for their purchase of an investment home, 51 percent said to provide rental income; 39 percent to diversify investments; 21 percent to use for vacations or as a family retreat; 16 percent for use by a family member, friend or relative; 11 percent for tax benefits; 10 percent to use as a primary residence in the future; and 4 percent because they had extra money to spend, according to the report.

Twenty-three percent of investment properties bought last year were in the Northeast, 19 percent in the Midwest, 38 percent in the South and 21 percent in the West; 39 percent were purchased in a suburb, 20 percent in an urban or central city area, 21 percent in a small town, 15 percent in a rural area, and 5 percent in a resort area.

Vacation-home buyers plan to hold onto the property for a median of 10 years, while 38 percent plan to keep it for 11 or more years. Investment buyers plan to hold their property for a median of four years, with 29 percent planning to Keep for six years or more and 10 percent planning to sell in a year or less. 

Also, the report found that 80 percent of second-home buyers consider it a good time to invest in real estate, compared with 59 percent of buyers of primary residences, and 44 percent of vacation-home buyers and 57 percent of investment buyers said they were likely to purchase another property within two years 

Copyright Inman News
Reprinted by Permission of Inman News

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HUD rolls out new limits for FHA backed loans
Web site also provides new limits for Fannie, Freddie

BY MATI CARTER, THURSDAY, MARCH 6, 2008.

The Department of Housing and Urban Development today implemented temporary increases in FHA loan limits in every housing market that it estimated will allow nearly 240,000 additional families to take advantage of the government-backed mortgage insurance program.  

The new limits for Federal Housing Administration loan guarantee programs are based on median home price, and range from a new floor of $271 ,050 up to a cap of $729,750 in the highest-priced markets, such as New York, Los Angeles, San Francisco and Washington, D.C. HUD said 75 out of 3,200 housing markets will see FHA loan limits bumped up to the maximum.

HUD also published temporary increases in the conforming loan limit that will allow Fannie Mae and Freddie Mac to purchase "jumbo light' loans above the $417,000 conforming loan limit until the end of the year. The government-sponsored enterprises, Or GSEs, are still in the process of updating their underwriting standards and loan processing software to make loans of up to $729,750. 

HUD has created a new Web page that provides the new conforming loan limits and limits for FHA-backed loans by state, county or metropolitan statistical area. The Web page is capable of generating tables for one or several areas.

The new loan limits are based on county median home prices. Properties located in a metropolitan statistical area (MSA) that includes more than one county will be subject to the loan limit for the entire MSA, which is determined by the county with the highest median home price.

In high-cost areas, single-family loan limits for FHA, Fannie and Freddie are being increased to 125 percent of the median home price, with an upper cap of $729,750. The cap is $934,200 for two-family homes, $1,129,250 for three-family homes, and $1,403,400 for four-family homes, HUD said in a letter to lenders.

In a press release, federal regulators who oversee Fannie and Freddie said the conforming loan limit will be increased in 71 MSAs that encompass 266 counties and cities, and an additional 21 counties that are not part of an MSA. The Office of Federal Housing Enterprise Oversight published its own list of counties and MSAs where the conforming loan limit will be increased.  The existing, $417,000 single-family conforming loan limit for Fannie and Freddie will remain in place in areas where the median home price is $333,600 or less. The floor for FHA loan limits is being raised from $200,160 to $271,050. 

The new limits, part of an economic stimulus package that also includes tax rebates, will expire at the end of the year, unless Congress makes permanent increases part of pending legislation that would strengthen oversight of Fannie and Freddie and modernize FHA loan guarantee programs.

In a press release, HUD Secretary Alphonso Jackson said that passage of an FHA modernization bill introduced two years ago could help FHA serve an additional 250,000 families 2008. 

Reprinted by permission of Inman News

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Utah Still #1 In Appreciation
Office of Federal Housing Enterprise Oversight

According to the Office of Federal Housing Enterprise Oversight, "The states with the greatest rates of appreciation between the fourth quarter of 2006 and the fourth quarter of 2007 were: Utah (9.3%), Wyoming (8.3%), North Dakota (7.9%), Montana (6.9%), and Alaska (6.0%)."  (See pages 2, 25, and 27 of their report dated February 26, 2008).

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2007 Park City Real Estate Transactions Reach Nearly $2 Billion
Home Prices Show Double-Digit Appreciation

30 January 2008 (Park City) - Big homes, big condos and big transactions led to a big year in 2007 for Utah's premier destination ski area.

In the 12 months ended Dec. 31, 2007, Park City real estate transactions reached $1.98 billion, an increase of 3 percent compared to $1.92 billion in volume a year earlier, according to a report released today by the Park City Board of Realtors.

"Our total volume in 2007 was the second best-ever year in real estate in Park City," said Tyler Richardson, president of the Park City Board of Realtors. "I don't think Park City real estate prices have peaked if we look at what has gone on in other resort destinations in the Rocky Mountains."

The median price of single-family homes sold in Park City during 2007 climbed to $680,000, an 11 percent increase compared to $615,000 in 2006. Condominium sales in 2007 reported a median sales price of $559,750, a whopping 31 percent rise compared to $427,000 a year earlier. The median sales price of vacant land also climbed in 2007 to $549,000, up 17 percent compared to $470,000 in 2006.

While sales prices continued to rise, the number of single-family homes sold in 2007 fell to 828 units, a 13 percent decline compared to 957 homes sold in 2006, the report noted. The number of condominium sales showed a 3 percent drop to 778 units, down from 799 units a year ago. Land purchases dropped to 514 transactions, down 40 percent from 859 land sales in 2006. The average days on market for all types of listed properties increased in 2007 to 210 days, up 42 percent compared to 148 days the previous year.

The 2007 report included sales statistics of Summit and Wasatch counties and tracked sales volume, average sales prices and median sales prices. Sales figures varied widely among market segments and neighborhoods. Board President Richardson encouraged the public to talk to a local REALTOR® for a more complete analysis of the sales trends.

"The fundamentals for the Park City market are very good," said Lincoln Calder, president elect of the Park City Board of Realtors. "The Park City real estate market has never been focused primarily on investment speculation. People buy in Park City because it is a place they want to be and a place they want to bring their family and friends."

Richardson indicated that the Park City area was less prone to the wild investment speculation that gripped many regions of the country, artificially driving up demand and prices. "People buy homes in Park City because they've got the income and they've got the ability to do it and Park City is the place that they want to be," Richardson said. "They are making a lifestyle purchase, a family legacy purchase."

Within Park City proper, the median sales price of single-family homes sold in Old Town climbed to $1.3 million, up 28 percent compared to $987,000 in 2006. The Prospector area witnessed a 28 percent increase in its median sales price - from $622,250 to $797,000. In Park Meadows, the median sales price rose to $1.6 million, a 14 percent increase compared to $1.4 million a year earlier. At Jeremy Ranch, the median sales price increased to $873,500, up 17 percent compared to $745,000. In Pinebrook, median prices fell to $748,000, down 2 percent compared to $764,950 in 2006.

The median single-family sales price in Kamas and Marion increased to $329,450, a 20 percent jump compared to $275,000 in 2006. In Heber City and Daniel (Wasatch County), median sales prices also climbed 20 percent, from $264,500 to $318,000. In Midway and Charleston (Wasatch County), the median sales price inched up 4 percent to $528,000 from $507,500 a year ago.

"Research tells us that the demographic trends look very positive for resort areas like Park City. Baby Boomers are now hitting their peak earning years and one of the main areas they are investing that income are second homes to enjoy with their family," Calder said. "As more and more Baby Boomers invest in second homes, Park City real estate sales are likely to benefit." In fact, according to the most recent data of the National Association of Realtors, vacation-home sales rose 4.7 percent to a record 1.07 million units in 2006 from 1.02 million units in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005.

"The demographics point to an increase in second-home ownership," Calder said. "Park City has a lot of great things going for it. It is very easy to get to and from anywhere in the country. Delta Air Lines is adding an international flight from Salt Lake City to Paris this year. In addition to Park City’s world class resort facilities and year-round recreation opportunities, our community offers a wide range of cultural events including the Sundance Film Festival, Kimball Arts Festival, Park City Jazz Festival, the summer concert series and Eccles Center events just to name a few.