Salt Lake City Real Estate Blog

OK so I had a bit of a surprise the other day, I received my stimulus tax rebate check, but it was not for the amount I expected.

The check I received was for $600 and not the expected $1200. Given this, I started to do some digging to try to find out why I was shortchanged. Here are the qualification criteria for the rebate.

- More than $3000 in qualified income.

- Less than $150,000 joint income.

- Net Income Tax Liability more than $600

Now the first two criteria were no problem, so it must be the ‘Net Income Tax Liability’ criterion. After a bit more digging, it turns out that because both my wife and I are self-employed we pay ‘Self-Employment Tax’ and not ‘Income Tax’. While self-employment tax counts towards the Qualified Income criterion, it does not count towards the Net Income Tax Liability. So while we paid several thousand dollars of tax on our income, it was the wrong type of tax.

Can anyone explain why self-employment tax should not qualify, because I am totally baffled. I would image that there an awful lot of upset self-employed people out there at the moment.

These are not my words, they are from a recent article in Forbes Magazine. According to the magazine article, Salt Lake is the sixth most recession proof city in the U.S. This is based on the fact that the city’s unemployment rate is low, that we are still creating jobs and that the housing market remains strong (well at least compared to other cities).

This economic strength may well explain why the Salt Lake housing market is not seeing the large declines like other major cities and that the foreclosure rate, while increasing is relatively small. Even with the number of homes sold decreasing by 40% and days on market increasing by a similar margin, the median sales price still went up in the last quarter. The reason prices have not declined, is that most people don’t have to sell. They have a good job, and are reluctant to lower their price, so their home just sits on the market. This results in a stalmate, with buyers wanting a bargain, and unwilling to pay full price for a home.

A good example of this was an offer recently made for one of our listings. The buyer offered 20% below asking price. The reason for the low-ball offer was that they had relocated here, and had to take a 20% hit on the sale of their home. Because of this, they assume that the Salt Lake Market is going to go down by 20%.

Home prices for the first quarter 2008 are out, Salt Lake Home Prices. For the first time in a long time, more zip codes went down in value than increased in value. The average home price for Salt Lake County is now $287,119, which is a 0.33% increase from last years average home price of $286,170. That’s not too bad given the rest of the U.S. market. What’s worrying are the days on market and number of homes sold figures. In the first quarter 2008 DOM was 58, that’s an increase of 45% and there were 1820 homes sold, which is a decrease of 42.82%.

If you compare current home prices against the third quarter 2007 (this was the high point in prices), you see a larger decline. The average home price in the third quarter 2007 was $309,876, which means prices have declined 7.34%.

I have been updating our listings to incorporate the new Google Street View functionality. You can see an example here: Draper Rambler. It’s pretty easy to do, and it provides some useful features, particularly for out-of-state buyers who are not familiar with an area.

While places like California and Florida saw their home prices decline over the last year, Utah was a different story. Home prices for the fourth quarter 2007 went up 9.27% compared to the same quarter in 2006, which was the largest increase in all 50 states. What’s more, that was the fifth consecutive quarter Utah led the nation in house price appreciation.

At a city level, four out of the top 10 cities were in Utah, Salt Lake City no. 7, Ogden-Clearfield no. 4, Provo-Orem no. 6 and Logan was no. 8.

However, all good things come to an end. The Utah housing market has slowed considerably over the last couple of quarters and the home sales data for the first quarter 2008 is due to show a considerable tightening of the market. The number of homes sold is way down on last year’s numbers, (for example, 687 in Feb 2008 compared to 1,148 in Feb 2007) and the days on market are climbing accordingly.

The Salt Lake high-end housing market recently received a boost, when conforming loan limit went up from $417,000 to $729,750 in Salt Lake County, Tooele County, and Summit County.

This increase means that Fannie Mae and Freddie Mac can now provide loans up to $729,750, which should result in a much-needed boost to the Utah housing market. High-end homes have recently undergone a slowdown, mainly because lenders shutdown the Jumbo Loan market as part of the sub-prime scare. Lenders have since discovered that Jumbo Loans are not the real problem, and are now starting to relax lending requirements. This coupled with the new lending limits should hopefully put some much-needed life into Salt Lake’s high-end real estate market. Many home buyers will now be able to take out a single loan, without the need to take out a jumbo loan, with their high interest rates and down payment requirements.

In addition to Fanny and Freddie raising their limits, FHA loan limits also went up from $364,000 to $729,750, further opening up finance options to home buyers.

To determine how these changes will affect you, we recommend that you seek the advice of a mortgage professional. Alternately, you can post your question here, and we will get a mortgage professional to reply.

The West Bench Condos development is located in Magna Utah and is expected to be complete in the summer of 2008. The development will comprise of 2 buildings, each having 12 units spread over 3 floors. Units comprise of 3 bedrooms, 2 bathrooms and range in size from 1210 sq. ft. (for 1st floor units), to 1265 sq. ft for second and third floor units. Prices start at $139,900 for a second floor unit, $144,900 for a ground floor unit and $149,900 for a third floor unit.

The condos are laid out so that the second and third bedrooms are on the opposite side of the unit to the master suite. The kitchens come with oak cabinetry, a snack bar and a separate dining space.

Outside there is a common area featuring a BBQ / Picnic area with seating and a playground.

I have updated our Salt Lake new homes map to incorporate the latest developments and pricing information. This interactive map uses Google Maps functionality to show the location and prices for the major new home builders and developments in Salt Lake County, Davis County, and Utah County. New home prices across the Salt Lake Valley are coming under pressure from the slowdown in the local housing market. Very few builders/developments have increased their prices, with most builders keeping their prices the same or lowering them slightly. Ivory Homes seems to have cut their prices the most, with the majority of developments showing substantial price declines.

The median annual home price information for 2007 is now available at Salt Lake County Home Prices , Utah County Home Prices , and Davis County Home Prices. Home prices went up in the vast majority of zip codes in all 3 counties, but not at the same pace as 2006.

Green building trends, and environmentally conscious living, are growing in momentum all across the United States, and included in that movement is the city of Boston, where a first of its kind green residential development recently opened to the public. The Macallen Building in northern South Boston opened to residents in June of 2007 (see related event information on the Boston Condo Blog) as the first gold-level Leadership in Energy and Environmental Design (LEED) certified condo development in the Massachusetts capital.

The new condo development is nestled among hip, and up and coming, Boston condo developments in an area less than a ten minute walk from the core of downtown Boston, and is immediately accessible via the Boston subway, called the “T”.

The Macallen Building strived hard to achieve the highest LEED green certification level.  Due in part to its green roof, the Macallen will save over 600,000 gallons of water each year, and its systems allow for annual electric savings of approximately 30% compared to similarly sized buildings. One of the most striking features of the Macallen Building is its sloping 6 to 12 story green roof, which is set with sedum, a flowering plant that will change colors with the seasons collecting rainwater runoff for landscaping use.

The entire building is non-smoking, and unique to Macallen is heating and air conditioning systems in each unit that pull fresh air, not re-circulated air, from the outside directly into your unit to maintain the best indoor air quality, while insulation comes from recycled jeans.  The development team, Pappas Enterprises, went so far as to come up with a Green Manifesto.  The Macallen Building at 141 Dorchester Avenue in South Boston has set the gold standard in Green construction for Boston real estate, and it will be up to those following the Macallen to keep pace with the high standards that have now been set for future city of Boston condo developments.