Tuesday, August 12, 2008

Utah's Struggling Housing Market

Since reaching its peak, in terms of average sales price and units sold, the housing market in Utah has gradually fallen off its highs of a couple of years ago. In light of this slowdown, it's quite remarkable how home prices have held up even as the slowdown worsens. However, according to Mark Knold, a senior economist for the Utah Department of Workforce Services, stated that Utah's housing market may still be in for the worst.

In noting that Utah trailed behind much of the country in the housing run up, Mr. Knold believes that Utah is trailing much of the country in feeling the effects of the housing crisis. I concur with Mr. Knold's analysis and also believe that Utah's residential real estate market won't stabilize until home prices fall an additional 10-15%. Although I am no expert on real estate, I would venture to say that the stabilization won't occur until late 2009. Noticeable growth in the housing sector will probably follow in 2010.

According to Mr. Knold, one positive for Utah's housing sector is the fact that Utah does not have mounds of finished, unoccupied homes, like many other cities and States across the U.S. Because there is not a glut of inventory, Utah should be quick to recover when the stabilization occurs.

I think I can speak collectively for all business owners in saying that the housing crisis cannot come to an end soon enough. The impact of the housing crisis is felt through almost every sector of our economy. Obviously, a large part of the construction industry lives and dies by the success or demise of the housing market. When the construction industry is suffering, retailers, restaurants, and trucking companies also feel the effects.

Even though it may seem like the sky is falling down all around us, Mr. Knold offers some hope that the Utah housing market will rebound in coming months. We should all be optimistic and hopeful that we will see improved economic growth by next year.

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