Salt Lake City.. The Myth vs Reality of Buying a New Home..
In Saturdays Salt Lake Tribune article, sorting through the myth vs reality , Curt Dowdle, executive officer for the Salt Lake Home Builders Association (HBA) reports that claims of lenders being "awash" in foreclosures is Myth #2. . Mr Dowdle seems to be suggesting that the fact that a higher number of home-owners than usual face losing their homes in Salt Lake Valley is a myth. No, that is a fact.
He sites for example, the areas largest lender with over 200,000 current mortgages in Utah as having only 13 properties in foreclosure.
That may be true, although I am trying to find out the name of a single Utah lender that has a mortgage on any where near that many Utah Properties.
What isn't true, but is implied, is that foreclosure is still the most popular way for lenders to mitigate their losses. Short sales have taken the place of traditional foreclosures.
For the last few years, lenders, have allowed home owners in many instances to sell houses for less than what was owed. The rational was, it was quicker, and less costly than going through the hoops of traditional foreclosure. The Banks could attempt to collect any deficiency from the old home owner and if they were unsuccesful, write off the balance.
The facts are, re/ Myth #2 ... That while foreclosures are barely a blip on the screen, more and more "short sales" are taking place.
More Facts re/ Myth #2... As I pointed out in my blog last week, Salt Lake Valley Homes, during the first 12 days of 2008, in the areas of South Jordan, West Jordan, Riverton, and Herriman, over 10% of the Real Estate Purchase contracts written on previous owned homes involved getting approval from the lender. (IE: Bank,hud,REO,Repo,third party,short sale). Further, in that same area 6% of all homes listed involved a lender or trustee.
I'm not suggesting that this is the end of the world, or that Real Estate here in Utah is not weathering the storm better than most areas of the country. As Mr. Dowdle pointed out, Business Week rates the three major metro markets that make up the Wasatch Front to be three of the top 10 markets in the nation. Forbes Magazine reports that the Salt Lake Area shows the greatest strengths in values for residential properties nationwide.
What does it all mean ? Not much if your not losing your home. Quite a bit if you are.
Thanks for being here.