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SALT LAKE CITY -- Rock-bottom prices and record low interest rates have not been enough to drive people back into the housing market.
"The mentality of this generation is apprehensive," said Colin Wright, CEO of Henry Walker homes. "Is this really a good deal, a good value?"
This morning on Sunday Edition Bruce Lindsay discussed housing trends with developer and Adjunct Professor at the University of Utah, Colin Wright. He believes the younger generation will have much different housing needs and wants. They want smaller yards and shorter commutes, which will lead to more urban housing. Getting out of debt will be more of a status symbol than a big house, and energy efficiency will also be important.
The important measuring stick right now is home prices. Thirty percent of homeowners in Utah have negative equity, and the starter home may have to become the dream home for a lot of families.
"We've lost that part of the market. They can't move up. They are stuck," said Jim Wood, director of the Bureau of Economic and Business Research at the University of Utah.
He has watched Utah's housing market closely and believes home prices have hit bottom. But, he adds, we are still years away from full recovery. Short sales are keeping prices down and discouraging people from entering the market.
The mentality of this generation is apprehensive. Is this really a good deal, a good value?
–- Colin Wright, CEO of Henry Walker homes.
Unemployment and poor credit have also soured the housing market, but it's causing a boom in the rental industry. "The apartment market is highly attractive right now," said Kip Paul, executive director of Commerce Real Estate Solutions. "We are actually seeing prices exceed the peak from three years ago."
In the past year, all types of apartment units experienced increases in average rental rates. A three-bedroom unit now costs about $1100 a month, and Salt Lake County only has a 5.2 percent vacancy rate -5 percent is generally considered a tight market.
"We are building more but not quite enough to keep pace with what the anticipated demand is going to be," he said.
And demand within the rental industry is also changing.
"Over half of those renters are now in single family homes, condos, town homes. They are not in traditional apartments," Wood said.
If rental prices keep going up, homeowners will have more options to rent their home and cover their mortgage.
Email:cmadsen@ksl.com.
