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SALT LAKE CITY -- A lot of people made mistakes before the market collapse. Lenders allowed people to get loans they could not afford, and many borrowers willingly went into these bad deals.
Utah Home Builders Association Executive Vice President Taz Biesinger says many customers did it in the attempt to sell the home later. But plans go awry and these homeowners were trapped with a home they couldn't pay for.
"People are [now] having to say, ‘This is what we can afford to buy,' and it may not have all of those fancy upgrades." Taz Biesinger
Home builders had lists of borrowers waiting for their homes to be built, and a lot of these homes had upgrades you wouldn't find in every home. Granite countertops, crown molding and fancy plumbing fixtures seemed to be on the list of necessities for many people buying a house.
"People are [now] having to say, ‘This is what we can afford to buy,' and it may not have all of those fancy upgrades in them," Biesinger says.
He says the homes being built now are just as high quality and are 100 percent more energy efficient than homes built 20 years ago. But people are more down to earth with what they're asking for.
"Maybe some of them are not putting in a fancy theater system," he says. "Or maybe they're being more realistic on some of the basic things rather than upgrading the carpet throughout the house."
Along with avoiding some of the fanciest fixtures, homeowners are looking to control their price point by limiting the size of their home. Biesinger says he's not seeing a drastic reduction in new home size, but they might not be as big as before.
"We have started trying to [make] more townhomes or condominium-type products simply because that lowers the land costs," he explains.
However, home builders and buyers were not the only parties responsible for homes being made bigger before the market collapse.
"A lot of cities, in those really high volume years, were placing requirements that you had to have a one-third [acre] lot or a half-acre lot," he says.
He says some cities are starting to loosen those requirements and some have started changing their one-time impact fees.
"Some cities are actually starting to reduce or eliminate their impact fees, altogether," he says.
Not every city is making these changes yet. Biesinger says some cities are keeping impact fees as they are now, and others are even increasing them, which he says will keep more new homes from being built.
E-mail: pnelson@ksl.com
