Keith McCord reportingAnother proposal that President Bush will consider soon is a plan designed to stimulate the real estate industry. Congress is working on a "home buyer tax credit" plan to jump-start housing sales.
It's not finalized yet, but if the president signs off on it, it would give first-time home buyers a tax credit of $7,500. The idea is to reduce the huge inventory of houses that are currently for sale across the nation -- around 4 million at the moment.
This was just one of the topics discussed in Park City today by the chief economist for the National Association of Realtors. Hundreds of real estate agents and ski resort operators from around the Intermountain West came to hear what Lawrence Yun had to say about the health of the real estate industry.
As the chief economist, Yun says although the industry is at a 10-year low in terms of sales with a large inventory, the signs point to improving conditions in the second half of this year and into 2009.
Yun also says, unlike other parts of the country, the Rocky Mountain region will improve first. "People are moving into the region; far more coming in than moving out. That's always positive. That creates additional demand for housing, and anytime there's demand for housing, that makes the market much more healthy," he said.
Yun also says low interest rates, fixing the sub-prime loan mess and a general improvement in the economy will also bring buyers back. Plus, he says there are a lot of people still "sitting on the fence" wondering when to get into the market.
"I don't think that's a good strategy from a buyer's point of view. They have the advantage. The inventories are plentiful. They have more negotiating power," Yun said.
Yun says Utah's home prices have taken a breather in the past year, but he says when the fence-sitters get moving, that will change significantly. "But five years from now, the market will be very healthy locally, and home prices could be 30 to 50 percent higher than what they are now," he said.
One sector of the real estate industry that's still vibrant is resort areas. People with money who want a second home are still buying. The numbers in the greater Park City area confirm that.
"We have been quite different from the rest of the country. Our prices over the first quarter have been very stable compared to the first quarter of 2007," said Tyler Richardson, president of the Park City Board of Realtors.
Every economist has a crystal ball it seems, but many we've spoken to over the months say Utah and our neighboring states are in position to fare much better and recover more quickly than the rest of the country.
Regarding that "home buyer tax credit," Congress tried it back in the 1970s and it did light a fire under the market.