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If your family needs a home, there probably hasn't been a better time in the past five years to make a move, according to one of the state's most prominent economists.
Though others caution that the deteriorating housing market might not have reached bottom, low mortgage rates and a rollback in home prices to near-2004 levels provide ample incentives, said Wells Fargo & Co. economist Kelly Matthews.
"This might be a historically good opportunity to buy a home in Utah," Matthews told the Utah Association of Appraisers summer symposium Wednesday in Salt Lake City.
He said average home prices in Salt Lake County fell to $278,472 in the fourth quarter 2008 from $286,250 in the fourth quarter 2007. Although average prices at the end of 2008 are still higher than the average of $198,394 in 2004, homes are about as affordable as they were five years ago, Kelly said.
That's because mortgage rates, which in 2004 were approaching 6 percent, today are closer to 5 percent. According to Matthew's analysis, a family buying now would pay the same share of its income in mortgage payment -- about 24 percent this year, compared with 23 percent in 2004.
Few in real estate, though, including Matthews, are yet urging people to buy homes as an investment. Matthews pointed to those who "need" a home or have a growing family as good candidates for a purchase.
But many people still are worried about buying a home and having it decline in value
None of the speakers at Wednesday's event would firmly say that the market has bottomed or that the risk of falling home sales and prices has abated.
"We're closer to the bottom, but I don't think we're at the bottom yet," said Jim Wood, director of the University of Utah's Bureau of Economic and Business Research. "We're just not seeing much strength yet in the single-family market."
Even after the recovery begins and home values stop falling, home prices probably won't budge much for a few years, Wood said. After that gains are likely to be modest, in the range of 2 percent to 3 percent a year.
"We're not going to see price appreciation until we see strong economic growth," he said.
That's because Utah's job market is losing more positions than previously thought. Another issue, said real estate developer Gary Wright, is Utah's rising rate of foreclosures. "It's one of the last remaining issues affecting our economy."
If Utah's foreclosure problem gets substantially worse, it could push Utah's economic recovery further into the future. And it could lead to more falling prices, which would make buying a home today not such a great idea after all.
That means for now, the residential housing market remains clouded in uncertainty. Over the long term, said Wood, "once growth resumes, Utah should outperform most states." But in the short term -- the next year or two -- "I don't know how all of this is going to play out."
