No Housing Bubble In Salt Lake…Yet
Despite increased housing inventories and declining prices across much of the country, there are still regions and cities that are doing well in real estate.
Granted these are first quarter numbers and I am eagerly awaiting 2nd quarter data, Salt Lake real estate is still looking good.
In an article pointing out anti-bubble cities, Salt Lake showed a 12.3% increase in sales prices during the first quarter. Other major cities showing gains include Seattle, Albuquerque and San Antonio.
Part of the reason these cities are defying the declining trends are some I’ve stated over and over; jobs and population growth.
The main ingredient is a set of positive fundamentals, including strong job and population growth, which then fuel demand for houses.
It certainly isn’t all rosy out there. The crunch caused by tightening of sub-prime lenders is reducing the pool of buyers and high media coverage is causing consumer sentiment to cool on housing.
Despite the challenges right now, the biggest factor in real estate success continues to be location.
But even the strongest areas around the nation show hints of weakness that aren’t covered by NAR statistics.
According to Lennox Scott, of the John L. Scott Realty Company, one of the largest home sellers in the Pacific Northwest, the hottest Seattle neighborhoods are those closest to job centers.
“We see double the demand close in,” he said. “People don’t want the commute.”
This sentiment is mirrored in Utah where real estate on the fringes like the West Bench and Utah County is having a tough time selling. Meanwhile, houses in desirable locations, especially the East Side are still selling well.
My opinion is Salt Lake won’t see a major correction, just a slow down commensurate with current lending trends and buyer sentiment.