Transcript Slide 1

THE UTAH ECONOMY AND
HOUSING MARKETS
Presentation by James Wood
Bureau of Economic and Business Research
University of Utah
November 2011
Forecast for Utah’s Major Economic
Indicators Source: Governor’s Office of Planning and Budget.
Category
2010
2011
Percent
Change
1,180.0
1,209.2
2.45%
Unemp. Rate
7.6%
8.0%
NA
Total Wages (billion)
$45.7
$48.1
5.3%
$38,665
$39,581
2.4%
Net Migration (000)
1.0
3.5
NA
New Auto/Truck (000)
69.1
76.2
10.2%
Residential Units
9,300
8,700
-6.5%
Residential Value (billion)
$1.7
$1.74
-2.4%
NonRes. Value (million)
$925
$1,100
18.9%
Retail Sales (billion)
$25.2
$26.3
4.4%
Nonfarm Emp. (000)
Average Pay
Year Over Percent Chg. in Utah’s Nonfarm
Employment
% Change
Wyoming
3.03
Utah
2.45
Oregon
1.46
Washington
1.36
Montana
1.18
California
1.16
Idaho
0.92
Arizona
0.50
Colorado
0.73
New Mexico
0.43
Nevadal
-0.31
Employment Drivers in Utah
2002-1010
Sector
Increase
Health Care
37,289
Local Government
17,204
Professional, Scientific and Tech. Services.
15,045
Lodging & Food
11,071
Private Education (BYU, etc)
8,199
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
2011 First & Second Quarter Short Sales & REO
Sales as % of Total SF Sales. Source: WFRMLS.
County
Short Sales
& REO
1st Qtr
Short Sales
% SS &
& REO
REO
2nd Qtr
% SS
& REO
Davis
183
36%
191
25%
Salt Lake
687
38%
793
31%
Utah
423
46%
451
40%
Weber
165
38%
153
25%
1,458
40%
1,587
31%
Total
CHANGE IN MEDIAN SALES PRICE OF
EXISTING HOME
Peak
Value
Peak
Qtr
Qtr 3rd
2007
2nd Qtr
2011
240.5
% Chg.
from
Peak
-25.8%
FHFA
State (Index)
324.3
NAR
Was.Front
$246,600
3rd Qtr $199,200
2007
-19.2%
WFRMLS
SL County
$256,000
3rd Qtr $201,500
2007
-21.3%
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.
Change in Renters and Rental Inventory in
Utah

.
Additional
Renters
New
Apts.
1970-1980
%
Chg
Renters
32.0%
29,265
NA
1980-1990
42.0%
50,634
NA
1990-2000
16.6%
28,471
NA
2000-2010
30.0%
59,821
21,619
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.