Utah delinquencies down; SLC to benefit from household growth
Categories: None | Tags: None
Each week, a number of national organizations release various reports on housing and the economy. While the studies often contain state-specific information, unfortunately, the national numbers are usually the only ones to make it to the news.
As I reviewed two such reports this week, I found some great information specifically about Utah that is worth sharing. Below is a review of the reports and what they mean for Utah real estate.
Fewer Utahns falling behind on mortgages
Fewer Utahns are falling behind on their mortgages, according to the latest report from research firm LPS Applied Analytics. In December, delinquency rates in Utah fell more than 11 percent compared to December 2009.
The total percentage of non-current mortgages, including those in foreclosure, was also down from last year. In December 2010, the figure declined nearly 3 percent from the same month in 2009.
The bad news, however, is that while fewer homeowners are defaulting, many who are already delinquent are falling into foreclosure. Utah’s foreclosure inventory in December 2010 was up nearly 29 percent compared to the same month a year earlier.
LPS said the trend for the month was one of foreclosures making their way through the system. Delinquency rates are lower because more loans entered foreclosure and new delinquencies declined. Foreclosure rates are also higher because there is a limited amount of foreclosure sale activity, the company said.
At 2.7 percent, Utah’s foreclosure inventory was lower than the rates in many other states. The total percentage of non-current loans in December was 9.8 percent, placing Utah as the 35th lowest in non-current mortgages. That’s a slightly better ranking than last year when Utah was No. 34. In the U.S. as a whole, the rate of non-current mortgages is about 13 percent.
Along with the decrease in delinquencies, the other piece of good news was the fact that delinquencies bucked the seasonal trend and declined, even though they typically rise at the end of the year. The Wall Street Journal speculates that could be the result of an improved economy and labor market stabilization.
Out-of-towners moving to Salt Lake
New data suggests Americans may be on the move again, and Salt Lake City may be the beneficiary of that trend. According to moving company Atlas Van Lines’ Migration Patterns Study, 2010 saw increases in the number of household moves, which is a possible sign the economy is improving.
Although Utah was classified as a balanced state rather than an inbound state in the 2010 study, Francis Yuen, an analyst with commercial real estate information company CoStar, said Salt Lake City is likely to benefit from household growth in 2011.
In analyzing the Atlas Van Lines study and other data about household moves, the Property & Portfolio Research analyst said Salt Lake City and a handful of other metro areas have “grown faster than average over the past decade and are forecast to best their prerecession household growth rates in 2011.”
Much of the migration into Salt Lake City and areas like Seattle and Portland can be attributed to job opportunities, said Yuen, who pointed out that major corporations like Goldman Sachs have increased their presence in Utah.
“But another, more qualitative reason that cannot be overlooked is that those moving are seeking a higher quality of life,” Yuen said. "The impact on these migration patterns will certainly have ramifications with regards to apartment demand and value. Although apartment demand in Salt Lake City, Portland and Seattle will not shoot to the top of the rankings, expect it to outperform its historic averages in each market in the near term.”
Yuen also said by 2012 Seattle and Salt Lake City are forecast to rank first and third in apartment value growth, respectively, which may make 2011 “the best time to invest in these metros.”
These are just two of many stories about Utah real estate. To get the latest information on Utah housing news, visit www.GoAskLilly.com, the new consumer Web site from the Utah Association of REALTORS®. To learn about real estate opportunities in your area, contact your local REALTOR®.
By Kenny Parcell
Appeared in the Salt Lake Tribune and Deseret News February 12, 2011
February 17, 2011 | Share: