Baby Boomers - Will They Bankrupt Social Security?
October 17th, 2007
The First Baby Boomer Files For Social Security
Can you believe it’s here? We’ve been talking about it for years and speculating on the impact it will have to our retirement and our economy. And now it seems to have crept up on us? Is this the beginning of the proverbial “run on the bank”?
What will the impact really be? Forecasts are that within 10 years Social Security will be paying-out more than is then paid-in. and in 35 years will be bankrupt! When will there be a serious attempt to make whatever changes must be made to make sure the social security stays around for all of us who have paid-in and modified to whatever must happen for future generations as well? They should not have to pay for our screw-ups!
For some interesting additional links on Baby Boomers check out the following:
US Census Bureau Baby Boomer Facts
First Baby Boomer turned 60 years old
Enough with the fun stuff! What does this mean to us here and now?
Yes we are going to see a barrage of media, articles, blogs, and more opinions than you can imagine. We will need to sift through the opinions and determine what the best personal financial moves are to secure our own retirement.
Here is a link to Brian Brady, Americas Mortgage Broker. I like his take on most mortgage issues. He keeps a pretty close watch on market indicators and conditions and presents his opinions well.
I recommend any to follow his posts. I know I will.
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Meth Decontamination in Utah - Fact vs. Fiction
October 16th, 2007
Michael Rowzee, a certified Meth decontamination expert is going to speak at the Bonneville Hills Community Council meeting Thursday, October 25th. If you have any interest in sifting through all the hype and hyperbole going on in the press about Meth then come to the presentation. In addition to being licensed to decontaminate meth labs Mike is certified as an instructor for Meth home inspectors and city and county health departments.
I’ve attended a meeting where Mike spoke about his experiences with Meth and highly recommend him.
The meeting will be held at the Anderson/Foothill library, 1135 South 2100 East, Salt Lake City, Thursday Oct. 25th, 6:30pm.
See ya there…
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Draper Utah Home Sales & Values - September 2007
October 16th, 2007
Draper Utah Real Estate is in the tank! September home sales dropped 55% from the prior month and 64% from September 2006. The mortgage crisis has completely crippled Draper home sales. The entire month of September Draper had only 22 home and 7 condo sales.
While sales were down, home values increased to an average of $490,637 which is an increase of 6.9% over September 2006 values.
Draper Utah - September 2007 Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| July | $446,072 | +.2% | 64 | -18.9% | 9.9 |
| August | $180,619 | +2.2% | 65 | -13.3% | 10.6 |
| September | $490,637 | +6.9% | 29 | -63.8% | 24.2 |
The absorption rate (the number of months required to sell all current listings) for Draper more doubled doubled in September to 24.2 months. That means it would take 24 months to sell the current listings if no additional homes were added to the market. And in September alone Draper had 224 new listings added to the market for a total of 702 listings. To see the September absorption rates for all of Salt Lake County check this post.
Salt Lake County - September 2007 Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| July | $311,576 | +11.1% | 1,269 | -5.2% | 6.6 |
| August | $316,151 | +10.3% | 1,294 | -12.2% | 7.0 |
| September | $300,066 | +6.2% | 848 | -34.2% | 11.0 |
Home sales in Draper is “THE” worst in Salt Lake County. Even Riverton and South Jordan are doing better. See the above comparisons.
Has Draper real estate hit rock bottom? Will home sales continue to decline? Will real estate values, which have continued to climb in Draper start to decline with the increased absorption rate?
If you’re interested in information on any particular zipcode or neighborhood just contact us at 801–582–5882 or at Ask The Broker.
Information for our stats were taken from WFRMLS as of 10/16/2007 and are subject to change at the discretion of the web-master. Zipcodes included for Draper Utah include 84020.
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Sandy Utah Home Sales & Values - September 2007
October 16th, 2007
Sandy Utah September home sales dropped 43% from the prior month and 34% from September 2006. The mortgage crisis hit Sandy hard with only 80 home and condo sales recorded for the entire month os Feptember.
While sales were down, home values remained stable at an average of $380,028 which is a 12% increase over average home values in September 2006.
Sandy Utah - September 2007 Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| July | $381,834 | +14.9% | 136 | +1.5% | 6.3 |
| August | $374,941 | +15.5% | 141 | -19.9% | 6.7 |
| September | $380,028 | +12.2% | 80 | -33.9% | 12.7 |
The absorption rate (the number of months required to sell all current listings) for Sandy doubled in September to 12.7 months. The increase was due to the low sales and the huge increase in the number of listings. Sandy currently has 1,015 active home and condo listings which is the highest ever for Sandy. To see the September absorption rates for all of Salt Lake County check check this post.
Salt Lake County - September 2007 Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| July | $311,576 | +11.1% | 1,269 | -5.2% | 6.6 |
| August | $316,151 | +10.3% | 1,294 | -12.2% | 7.0 |
| September | $300,066 | +6.2% | 848 | -34.2% | 11.0 |
Home sales in Sandy is pretty consistent with most of Salt Lake County. See the above comparisons.
Has Sandy real estate hit rock bottom? Will home sales continue to decline? Will real estate values, which have remained strong in Sandy start to decline with the increased absorption rate?
If you’re interested in information on any particular zipcode or neighborhood just contact us at 801–582–5882 or at Ask The Broker.
Information for our stats were taken from WFRMLS as of 10/16/2007 and are subject to change at the discretion of the web-master. Zipcodes included for Sandy Utah include 84070, 84092, 84093, 84094.
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Salt Lake City Home Sales - September 2007
October 13th, 2007
Salt Lake home prices peaked in July and then started their decline. The home value pressure caused by the current mortgage crisis finally took its toll on our Salt Lake real estate market.
September homes sales dropped to 186 homes & condos sold which is even lower than the average sales in January, the slowest month of the year. The number of active listings increased to 1,806 listings. The result of the growing home inventory and declining sales is an is an absorption rate of 9.7 months. That is a 4% increase in time on market over the August rate of 6.8 months. Check out the September Absorption Rates by city here.
Salt Lake City - September Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| July | $357,434 | +27.7% | 254 | +.8% | 6.8 |
| August | $344,788 | +14.3% | 272 | -7.5% | 6.8 |
| September | $311,271 | +6.9% | 186 | -23.5% | 9.7 |
The Salt Lake City real estate market is pretty consistent with the Salt Lake County results. Sales were slowing but were still doing ok until September. In September homes sales plummeted! Why?
Salt Lake County - September 2007 Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| July | $311,576 | +11.1% | 1,269 | -5.2% | 6.6 |
| August | $316,151 | +10.3% | 1,294 | -12.2% | 7.0 |
| September | $300,066 | +6.2% | 848 | -34.2% | 11.0 |
The mortgage crisis reached its peak in September. Prior to that we heard fears of increased foreclosures and falling prices. But in September Countrywide announced anticipated layoffs of 12,000 people and Merrill Lynch released their downgrade of Countrywide. For more on Countrywide and its impact on the market check here.
Even more impact was felt in September with tightening loan restrictions and the vanishing “stated-income” loans. Buyers suddenly had to have a down-payment to buy a home. Some buyers had been pre-approved and were a week away from closing when their lender informed them the loan they were approved on was no longer offered. If they couldn’t come-up with some “down payment” they could not close the loan. It was a tough month with rumors of 50% or more of purchases falling apart.
Have we seen the worst of it? Will things ease up through fall and during the winter months?
If you’re interested in information on any particular zipcode or neighborhood just contact us at 801–582–5882 or at Ask The Broker.
Information for our stats were taken from WFRMLS as of 10/13/2007 and are subject to change at the discretion of the web-master. Zipcodes included for Salt Lake City include 84101, 84102, 84103, 84104, 84105, 84106, 84108, 84109, 84111, 84116.
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Wassup with Countrywide?
October 12th, 2007
It seems that Countrywide is to the Mortgage industry what Microsoft is to computer and gaming technology. Since co-founding Countrywide in 1969, Angelo Mozilo has built Countrywide into the largest originator of home loans in the United States. Many don’t realize that Countrywide also services loans originated by other lenders totaling a servicing portfolio of about $1.5 Trillion!
It seems that many are looking at Countrywide as a barometer of the industry as a whole. As Countrywide goes, so goes the industry. If they appear on the road to recovery maybe the mortgage and real estate industries will have bottomed out as well.
So, what is happening with Countrywide? Will they follow the path of the 165 other lenders who have closed their doors?
In August we heard Countrywide had maxed out their line-of-credit and received a $2 billion infusion from Bank of America. There was speculation that the feds had some involvement and pressured Bank of America to assist in bailing Countrywide out. But, in an interview with BusinessWeek, Angelo Mozilo refuted the rumors and stated it simply showed Bank of Americas confidence in Countrywide after their extensive due-diligence. During August Countrywide also announced it’s intent to layoff around 12,000 employees and suspend it’s “sub-prime” business. The announcement of Countrywides problems started a decline in stock values from $35 share in July to about $19 per share at the end of August.
When asked about is forecast for the future, Mozilo commented that we were in an unpredictable environment. We have seen falling home values for 12–16 months which is certainly indicative of a recession. He did not expect a recovery until early 2009.
In September Countrywide cut 4,935 of the anticipated 12,000 reduction. The reductions were certainly the result of Countrywide getting “out of the sub-prime business” and the reduction in the mortgages in their pipeline. It’s pipeline of loans-in-progress was $42 billion as compared to $65 billion for the same time last year.
September saw the feds cut the federal funds rate to 4.75% and announce a Bush/FHA bail-out program for homeowners affected by rising rates on their variable rate loans. The news has had little impact on home-buyers confidence. Home sales in Salt Lake dropped to 835 units in the entire county. The lowest September sales volume in over 10 years.
The bad news seems to be that investors of security-backed loan packages are still reluctant to get back into the market. That reluctance is not expected to soften much through 2008.
The positive news is we still closed 835 purchase loans in September. Sellers are finally adjusting their prices to the market and buyers are seeing value opportunities.
“Conforming” loans are available! People who qualify with modest to good credit scores, money for a down payment, and verifiable income can buy a home. We’re back to where we should have been before this real estate frenzy began.
I believe Countrywide will survive this debacle. It will Morph to meet the market and remain the kingpin in the mortgage market.
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KUTV Dave Fox - Victim or Con-Man?
October 12th, 2007
Is Dave Fox a SportsCaster or Real Estate Con-Man?
Last night KUTV aired an interview with Dave Fox discussing his recent guilty plea for participating in Mortgage fraud. Dave appeared contrite and about his participation in the real estate scam. KUTV put Dave on “administrative leave” after he was charged. However, with the “plea and abeyance” settlement and his cooperation with state investigators, KUTV is allowing Dave to return to “the aire”. KUTV stated, “Though the ordeal has brought a level of embarrassment to Fox and KUTV, station managers — KUTV General Manager David Phillips and News Director Tanya Vea — ultimately decided to allow Fox to return to his position as sports anchor, something he says he has been “desperate” to do.”
So what did Dave Fox do? Was he a conspirator or a victim? Was there a Fox in the hen-house?
According to Dave Fox and other news articles Dave signed closing documents provided by his lender stating he intended to occupy the home he was purchasing as his principal residence. By signing that document he was qualified for a lower interest rate, by about .5%. He lied! He fraudulently misled the lender who gave him a reduced interest rate based on his signed occupancy statement.
It doesn’t excuse Dave’s actions, but this kind of fraud goes on consistently in investment loans. Yes, I’d even say it has been common place. Investors, flipping or holding their real estate investment, want to keep mortgage payments as low as possible. That 1/2% interest rate savings can mean $125 less in interest each month on a little $300k mortgage.
This is classic Utah Mortgage Fraud. Check-out our post last June on Utah Real Estate Fraud. Red flags should have been flying everywhere for Dave!
Dave would not have been caught or charged with any crime if there had not been some deeper scheme going /on that imploded and brought his actions to the surface. He was likely caught as the lender started investigating the mortgage, which was likely in default, and discovered that Dave lied about his intended occupancy. Check these reports in the “Daily Herald” and you’ll see that Dave was involved in a much larger Real Estate Valuation scam in the River Bottoms in Provo. The Utah County Attorney felt Dave was not apart of the larger scheme stating, “Mr. Fox has taken what we feel is appropriate action for his responsibility in this, and we are perfectly satisfied with this resolution,” said Mariane O’Bryant, deputy Utah County attorney.”
So, Dave goes back on the aire. He learned his lesson, and the public has learned from his lesson.
Promoters and con-men don’t usually use their own money in their scams. They look for reputable, financially strong friends, associates, and anyone who will listen to their pitch, to finance their scams. In real estate these are called “straw-buyers”. People putting up their credit and signatures to get loans to purchase the target properties. Dave appears to simply been a straw-buyer promised great rewards for the use of his credit and purchasing power.
Be careful whenever asked to put your credit and net-worth at stake for a promoter of any sort. And never lie to try and get a better deal. It’s just not worth it! Dave Fox put his job and his family in jeopardy and he compromised his personal integrity for the sake of a 1/2% higher interest rate?
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September 2007 Home Absorption - Salt Lake Real Estate
October 11th, 2007
The Salt Lake Metro home market took a huge plunge in September. The total number of homes sold dropped to 838 homes in the entire Salt Lake County. That is the lowest number of homes in the month of September since 1995!
Over the last few months sales slowed with the ongoing national real estate news. But the results of the mortgage crisis peaked in September bringing sales in most cities to a halt. Especially for homes over $325,000.
The following Home Absorption Table shows the months required to sell all current listing inventory for each city in Salt Lake County.
Home Absorption Rates - September 2007
| City | July | August | September | Market Direction |
|---|---|---|---|---|
| Salt Lake City | 6.8 | 6.8 | 9.8 | Buyers |
| South Salt Lake | 4.8 | 6.0 | 13.4 | Buyers |
| Holladay | 6.1 | 5.6 | 14.8 | Buyers |
| Murray | 5.0 | 5.8 | 8.3 | Buyers |
| Sandy | 6.3 | 6.7 | 13.0 | Buyers |
| Draper | 9.9 | 10.6 | 24.2 | Buyers |
| Cottonwood Heights | 8.6 | 7.8 | 12.7 | Buyers |
| Midvale | 4.3 | 4.4 | 6.0 | Balanced |
| Bluffdale/Riverton | 6.7 | 9.7 | 18.6 | Buyers |
| Herriman | 13.5 | 11.2 | 14.7 | Buyers |
| South Jordan | 12.1 | 11.3 | 17.8 | Buyers |
| West Jordan | 5.9 | 6.5 | 10.0 | Buyers |
| Taylorsville | 3.8 | 3.9 | 5.7 | Balanced |
| Kearns | 5.4 | 6.1 | 10.0 | Buyers |
| West Valley | 5.3 | 6.8 | 10.2 | Buyers |
| Magna | 4.4 | 4.9 | 10.2 | Buyers |
| Salt Lake County | 6.6 | 7.0 | 11.2 | Buyers |
The National Association of Realtors has defined the following as reasonable market indicators:
- Sellers Market 4 months inventory and below
- Normal or Balanced Market 5 to 6 months inventory
- Buyers Market 7 months inventory and above
For more information on Absorption Rates and their meaning Click Here.
Information for the above absorption statistics were taken from WFRMLS on 10/10/2007. Numbers may be updated at webmasters discretion.
For a more information on the Salt Lake City home market contact us here.
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SCME Mortgage Closes it’s doors!
September 28th, 2007
What does a wholesale mortgage lender say when they close their doors after 24 years?
I received this alert from SCME about an hour ago. I’ve got loans in process with them! Time to start shopping so we can close on time!
It has been a wonderful 24 years. THANK YOU!
As you are aware, the liquidity crisis in the mortgage lending industry has adversely impacted nearly every major mortgage originator, mortgage investor, and warehouse lender. SCME is no exception. We have spent a great deal of time analyzing the market and SCME’s role in the future of mortgage banking. There is every indication that the liquidity crisis will continue for the foreseeable future, causing significant challenges to our organization.
We would like you to know that SCME has valued our relationships over the past 24 years, resulting in strong partnerships and lasting friendships. Thus, our decision has not been made lightly, nor has it come easily. Effective the close of business today, September 28th, 2007, SCME will no longer accept wholesale business. Any loan that is not funded as of today will be returned to our customers.
This has been a very difficult business decision to make. We understand the impact this decision will be for our valued customers as well as our loyal and appreciated employees. Over the past 24 years, we have met and have had the honor of working with some of the best people in this industry. We pray that each of you will find your way through these tumultuous times. Thank you for your business and for your understanding.
Good luck and God Bless . . . .
I’ll miss SCME. They were good to work with. How many more will fall?
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Bluffdale / Riverton /Herriman Homes Sales - July 2007
August 28th, 2007
Bluffdale / Herriman / Riverton Housing Market Report
We’ve made some changes to homes sales statistics starting in July. We added all condo sales to home sales which improved the sales performance slightly. The change was made because agents seem to have some difficulty in accurately recording condo sales. Some report a condo as a single-family townhouse and some report it as a condo. So, to be more consistent, we decided to show them all as homes sales on our statistics. The numbers for May and June were adjusted to show the changes.
We’ve also begun separate charts to show the split of Herriman (zip code 84096) from Bluffdale and Riverton (zip code 84065). The separation of the two zip codes is not yet reported consistently by Real Estate agents so we are still reporting them on a combined chart and starting in July will also show them on a separate chart. The differences are pretty significant.
Bluffdale / Herriman / Riverton - July Home Sales
| Month | Average Sold Price | Change from Prior Year | # of Homes Sold | Change from Prior Year | Absorption Rate in Months |
|---|---|---|---|---|---|
| May | $346,013 | +14.9% | 113 | +3.7% | 4.6 |
| June | $352,533 | +9.5% | 81 | -30.2% | 6.7 |
| July | $365,296 | +11.5% | 89 | -26.5 | 11.0 |
This chart includes home sales for zip codes 84065 and 84096.
Bluffdale / Riverton - July Home Sales
| Month | Average Sold Price | Change from Prior Month | # of Homes Sold | Change from Prior Month | Absorption Rate in Months |
|---|---|---|---|---|---|
| May | $354,953 | +.2% | 70 | +12.9% | NA |
| June | $385,097 | +8.49% | 41 | -41.4% | NA |
| July | $385,503 | +.1% | 61 | +48.8% | 7.1 |
This chart includes home sales for zip code 84065 only.
Herriman - July Home Sales
| Month | Average Sold Price | Change from Prior Month | # of Homes Sold | Change from Prior Month | Absorption Rate in Months |
|---|---|---|---|---|---|
| May | $331,833 | -3.8% | 43 | +43.3% | NA |
| June | $316,352 | -4.67% | 40 | -6.9% | NA |
| July | $319,434 | +1.0% | 29 | -27.5% | 14.9 |
This chart includes home sales for zip code 84096 only.
Comparing the three charts shows Bluffdale and Riverton have a higher average home price than Herriman and the three cities combined. That’s obviously supported by the much higher values in Bluffdale. But interestingly it also shows that sales volume is stronger in Bluffdale and Riverton than in the combined chart and much stronger than Herriman. This is shown in the lower absorption rate for Bluffdale / Riverton than the three cities combined. The absorption rate for Herriman is twice as high as it is for Bluffdale / Riverton.
So what does it all mean? Sellers are not yet reducing their prices in Bluffdale and Riverton. The number of homes sold each month is variable but is certainly trending down. We are already seeing price reductions in Herriman which would be expected with the extremely high absorption rate.
We expect sellers to make additional downward adjustments in price to simply get their homes sold. Buyers are heavily conditioned by the national media about falling prices and a possible recession. They expect some kind of cut in prices and simply aren’t buying until they see it.
We are in a stand-off! Who’s making the next move?
If you’re interested in information on any particular zipcode or neighborhood just contact us at 801–582–5882 or at Ask The Broker.
Information for our stats were taken from WFRMLS as of 8/28/2007 and are subject to change at the discretion of the web-master.
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