Housing Prices Can Only Go Down

Recent economic data has shown South Ogden housing sales have been going down each month. In the spirit of this, I recently read this article from CNBC where economist Nouriel Roubini explains how our housing markets will take a double dip in the current recession.  See Here: http://www.cnbc.com/id/40828545/. 

The causes: First, the tax credits that were offered actually hurt the economy.  It took tons of houses off the market that would have been spread out over time.  What we ended up with was a huge boost in home sales and then a 30% drop once the tax credits expired.  Second, the mortgage foreclosure issue.  With the mortgage documentation issues and suspension of foreclosures we are actually slowing the sales of homes.   Once this is fixed and all of this supply hits the market, demand will drop.  Increase Supply, Drop Demand.  Housing prices will continue to drop because of this.              

Now not all of the this will mean our economy will take a double dip, but it surly won’t help at all.  At the end of the article Roubini said the following regarding a double dip recession:

"The eurozone shock, long-term structural deficits, and state and local governments [operating near] bankruptcy."

And, if homeowners begin walking away from their properties en masse, those negative trends might well pick up steam:

"12 million households are already in negative equity and 8 million more have an LTV btw 95 and 100%. Thus even a 5% fall in home price will push an extra 8 million in negative equity with risk of millions walking away from their home—i.e. jingle mail,"

Just some things to think as we think about our homes and the future of South Ogden.  Selling your home is going to get more and more difficult and your homes could continue to lose value.

Comments welcome...do you feel we are on the way up or could we be going down. 

South Ogden Home Sales on the Decline

More bad economic news for South Ogden as reported by the Weber County Homes and Real Estate Blog.  Apparently we have been on a steady decline for some time.  October numbers are now in and we are looking at a 28.57% decrease in sales.  In fact sales of home have been down nearly every month this year and so are our home values.  Home values have dropped from an average $155,250 to $140,000 in just a year and down from $171,250 from September of 2009.

The blog gives a nice quick summary of the dilemma in the following paragraph:

Sales started to plunge in July at 53.85 percent, the second highest sales depreciation on the record this year. Then it was followed by August and September which respectively dropped by 33.33 percent and 56.52 percent, the highest so far this year. October real estate in South Ogden sales tallied a total of 15 homes sold, down 21.05 percent from 19 in October 2010, and 28.57 percent below September sales with 14 sold properties.

Below you can see from these graphs a visual display of how the real estate market is going in South Ogden.  Looks like we have a long ways to go to recover from the recession.

South Ogden - Recession Proof?

Join the Glorious Revolution!: Thank you KSL!

Another local blogger, Kirk from Ogden, has recognized that South Ogden appears to be left untouched by the current economic crisis that is sweaping through Weber and Davis county. In his blog post about KSL and their ability to manipulate the news, he opines:

"Maybe KSL should do a news story about how there seems to be no recession or slow-down in spending in an isolated area of South Ogden Utah."

(See full post here:)

Though his post wasn't specifically about South Ogden, he does point out how amazing this is--if it is true.

Have a great Thanksgiving everyone.