The real estate blog.

A lot has taken place in the last 24 hours on the real estate front. The biggest news is the five year interest rate freeze for certain types of homeowners that will forestall hundreds of thousands of foreclosures. I’m not going to talk about that here.

Instead, let’s go local and really see what’s happening with Utah real estate. As far as foreclosures go, Utah is doing better than most of the country. We do have to remember that prior to this recent housing boom, Utah has tended to lead the nation in three categories; mortgage fraud, personal bankruptcy and foreclosure. This is not a good record for us as a state, and I suspect should our economy turn sour, we’ll remain at the top of the foreclosure list.

For now, we’re doing well.

Only 0.66 percent of Utah

home loans were in the foreclosure process at the end of the third quarter, down slightly from 0.68 percent in the same three months in 2006. Utah’s foreclosure rate has been falling in recent years after hitting 1.52 percent in the third quarter of 2004.

Utah’s rate is the fifth-lowest nationally and well below the national rate of 1.69 percent, the Mortgage Bankers Association reported today in its National Delinquency Survey.

However, the number of homeowners making late payments has gone up.

But another measure of mortgage activity is not as encouraging. Utah’s delinquency rate, which measures the total share of loans that are more than 30 days past due but not yet in foreclosure, rose to 3.92 percent in the quarter, up from 3.71 percent in the third quarter. The state’s delinquency rate had been decreasing in recent years.

Where does the Utah real estate market really stand? It’s clear that tightening lending standards have eliminated some of the buyer’s pool. To get a mortgage now, you’ll need good credit and financial reserves. Borrowers with less than perfect credit will need a down payment of 3% to 10%. The days of lax credit standards are gone. Nobody knows how much, or how long this downturn will last. I don’t think it’s going to be as bad as some are predicting in Utah. It’s definitely going to be bad in California and Florida.

I recently saw a prediction by Moody’s, the same group that under predicted Salt Lake’s appreciation this year, that estimated a 5 to 15% decline in Utah.

Price declines, however, will vary in degree throughout the nation, with more than a 15 percent peak-to-trough expected around Washington and Detroit.

Significant declines are also expected throughout most of Arizona, California, Florida and Nevada. During the housing market’s heyday, speculative activity was rampant in these areas, causing prices to surge much higher than other regions.

The Northeast corridor, and markets such as Boise, Idaho, along with Denver and Salt Lake City, will experience between 5 percent and 15 percent declines. In the rest of the industrial Midwest and parts of the Mountain and Pacific Northwest, prices will fall more modestly.How that prediction actually plays out, only time will tell. The fact of the matter is short term real estate investing is very risky right now. Buying a house in Utah is going to take a certain amount of courage and faith and a long term view. While the spectre of declining home values is out there, opportunities will present themselves for those who are prepared financially and can find great deals.