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THE UTAH ECONOMY AND HOUSING MARKETS Presentation by James Wood Bureau of Economic and Business Research University of Utah November 2011.

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Presentation on theme: "THE UTAH ECONOMY AND HOUSING MARKETS Presentation by James Wood Bureau of Economic and Business Research University of Utah November 2011."— Presentation transcript:

1 THE UTAH ECONOMY AND HOUSING MARKETS Presentation by James Wood Bureau of Economic and Business Research University of Utah November 2011

2 Forecast for Utah’s Major Economic Indicators Source: Governor’s Office of Planning and Budget. Category20102011Percent Change Nonfarm Emp. (000)1,180.01,209.22.45% Unemp. Rate7.6%8.0%NA Total Wages (billion)$45.7$48.15.3% Average Pay$38,665$39,5812.4% Net Migration (000)1.03.5NA New Auto/Truck (000)69.176.210.2% Residential Units9,3008,700-6.5% Residential Value (billion)$1.7$1.74-2.4% NonRes. Value (million)$925$1,10018.9% Retail Sales (billion)$25.2$26.34.4%

3 Year Over Percent Chg. in Utah’s Nonfarm Employment % Change Wyoming3.03 Utah2.45 Oregon1.46 Washington1.36 Montana1.18 California1.16 Idaho0.92 Arizona0.50 Colorado0.73 New Mexico0.43 Nevadal-0.31

4 Employment Drivers in Utah 2002-1010 SectorIncrease Health Care37,289 Local Government17,204 Professional, Scientific and Tech. Services.15,045 Lodging & Food11,071 Private Education (BYU, etc)8,199

5 HOUSING PROBLEM: VANISHING DEMAND Household Growth Slows. Marriages/divorces, headship, decouple, marriage/divorce, migration Deep Job Loss Due to Great Recession. Income & job uncertainty Credit Troubles. Credit worthiness, foreclosures & short sales Middle Class Struggles

6 2011 First & Second Quarter Short Sales & REO Sales as % of Total SF Sales. Source: WFRMLS. County Short Sales & REO 1 st Qtr % SS & REO Short Sales & REO 2 nd Qtr % SS & REO Davis18336%19125% Salt Lake68738%79331% Utah42346%45140% Weber16538%15325% Total1,45840%1,58731%

7 CHANGE IN MEDIAN SALES PRICE OF EXISTING HOME Peak Value Peak Qtr 2nd Qtr 2011 % Chg. from Peak FHFA State (Index) 324.3 Qtr 3 rd 2007 240.5-25.8% NAR Was.Front $246,6003 rd Qtr 2007 $199,200-19.2% WFRMLS SL County $256,0003 rd Qtr 2007 $201,500-21.3%

8 BUY OR RENT? 3 Bdrm 2 Bath Rent = $1,050 Mortgage Pmt on Median Price Home = $1,100. Tax Advantages = deductions, capital gain, yield. Extreme Levels of Affordability for Ownership but Credit Worthiness Prevents Purchase. 70% of all homes, condos, twin & town homes sold in WF affordable to moderated income family. 65% of all single family homes in SL Co. affordable to moderate income family.

9 Change in Renters and Rental Inventory in Utah. % Chg Renters Additional Renters New Apts. 1970-198032.0%29,265NA 1980-199042.0%50,634NA 1990-200016.6%28,471NA 2000-201030.0%59,82121,619

10 WHAT ABOUT LOW INCOME RENTERS IN UTAH? Rental subsidy programs provide assistance for about 43,200 households: LIHTC (22,000), HUD (17,000), RD (1,600), Public Housing (2,600). Estimated 90,000 very low income (50% AMI; SL Co = $35,000) renter households with no assistance.


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