This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Super-low interest rates. Strong economy. Low unemployment. Lots of people moving into the state.

That's typically a recipe for a booming housing market. But not now, and not in Utah.

The numbers tell the story. In Salt Lake County, 11,622 existing single-family homes changed hands last year, down nearly 24 percent from 2006, according to a report released Thursday by the Salt Lake Board of Realtors. Utah County sales were down 25 percent, followed by 21 percent drop in Tooele County. Sales in Davis County were down 18 percent, followed by Weber County, down 14 percent.

Because market conditions didn't start to deteriorate along the Wasatch Front until summer, home prices in those counties were still up in 2007, from about 10 percent to 19 percent compared with 2006. But Wells Fargo economist Kelly Matthews said an overall selling-price drop this year of 7 percent to 10 percent is practically inevitable.

"Housing prices are out of whack with incomes and there needs to be price adjustments," Matthews said. "There's no way we are going to be able to work our way out of this situation without having some price adjustments. We're just too far out of line." In the past several years, the value of many homes along the Wasatch Front more than doubled, vastly outpacing wage gains during the same three- or four-year period. Also, lenders now are requiring higher down payments, greater cash reserves and higher credit scores than they have in the past - the result of the nation's subprime lending debacle.

Especially vulnerable are sellers of high-end homes. Many lenders are making it more difficult to get so-called "jumbo" loans - those for values above $417,000.

With selling price declines on the horizon, is it a bad time to buy? On the contrary, Realtors say 30-year fixed mortgage rates are hovering in the low 5 percent range and many sellers are offering concessions.

"It's a good time to buy," said Realtor David Bemis with Realty Executives of Utah in Midvale. "Mortgage rates are so low . . . and with so much inventory, with some good negotiation, you're going to get a good price."

One of Bemis' buyers, Marty Glodowski, just closed on a three-bedroom home in Sandy with an oversized two-car garage for $155,000. Bemis said homes in that price range in an "up" market probably should have sold for more than $170,000.

"If I was buying a home to flip it, I'd probably be worried about [falling home prices]," he said. "But I'll probably be in the home for a while, so I'm not."

To generate more interest in his property, Dominick Delgado has lowered the price of his 1,872-square-foot Taylorsville property from $210,000 to $188,600. But he is also now offering to pay up to $5,600 in closing costs, compensate a buyer's agent a 3 percent commission and throw in a $1,000 cash bonus at closing for buyers willing to pay his current price.

"It's a buyer's market right now and the seller who can offer the most incentives can get their home sold quicker," Delgado said. "You have to get aggressive."

Matthews of Wells Fargo said the sellers who will be hurt the most will be those who bought in the past year or so and have to sell this year.

"The price they are going to have to sell at is probably going to be less than what they paid for the property," he said.

Cindy Huerta faces that problem. She is trying to sell her 3,700-square-foot home in the Avenues area near downtown Salt Lake City and has lowered the price from $699,000 to $579,000 for buyers who don't have an agent. ($595,000 if she has to pay a real-estate commission.)

Huerta bought the home in February of last year. But in August, she was forced to shut down her subprime mortgage company when business dried up. She has since found a full-time job at a bank at only a fraction of her previous income. Even if she sells the property for $579,000, Huerta said she is going to have to bring about $20,000 in cash to closing. Even so, she is hoping for a quick sale because each month she is draining her savings to stay afloat.

"I can't keep this going for months and months," she said.

So when is it going to get better?

In Salt Lake County alone, there are just over 6,000 single-family homes listed for sale on the Wasatch Front Regional Multiple Listing Service. Only about 400 sold in the last 30 days, said Realtor Doug Cary with Coldwell Banker Residential Brokerage in Salt Lake City. "That tells me we are heading into a very large glut of inventory on the market," Cary said. "It also tells me we're in this downturn for a very long time."

Lower-cost property still a good buy

The market for homes priced below $250,000 is still good, and many sellers in this price range aren't having to make the same deep cuts as sellers of higher priced homes.

Benefits of the 'burbs

11.4%

The percent Weber County's home prices rose in the fourth quarter, compared with the same period in 2006. Of the five Wasatch Front counties, Tooele and Weber counties fared the best in that time period. Tooele County was up 8.6 percent.

Alpine cools

After huge gains in recent years, the real estate market in Utah County's Alpine is coming back to reality. Home prices in 84004 were down 4.2 percent from 2006 to 2007, although the area remains the highest-priced area along the Wasatch Front with a median price of $605,935.