Foreclosure Clouds Hang Heavy Over Utah

April 18th, 2008

Utah lying to the west of US is the home to the Utahns – who are cowering under the heavy foreclosure clouds hanging over it. Most of the people – about 88% - crowd in Salt Lake City. The other vast regions of the state are virtually uninhabited. Utah means the people of the mountains. Here there are snowy mountains, valleys with rippling streams as well as rough tough stony deserts. Utah is home to the Mormon sect – an industrious group contribution to the economic well being of the state as the hub of transportation, IT industry and research. Utah was ranked as the sixth fasted growing state in the country in 2006. Yet foreclosure weather is bad – clouds are threatening.

The number of foreclosure is rising. In March 2008 it rose by 93% from March 2007. Across the country the increase was by 57% in March. Nevertheless it is still better off than other states. In US 234,000 foreclosures were listed calculating to one out of 733 houses being scarred by it. In Nevada it is as high as one out of every 139 houses. California and Florida recorded 1:204 and 1:282 respectively. These three states were the highest offenders. Utah ranked 17th in the national foreclosure race.

The national figures are jumping because many sub-prime mortgages with ARM are just beginning to rise to higher interest rates. Loans worth $640 billion are going to be affected by this hike this year. Thus as yet the nadir has not been reached, comments analyst Kenneth Rosen of Rosen Real Estate Securities LLC connected with University of California, Berkeley. Throughout the year foreclosures will be on the rise. More houses will enter the already satiated real estate market. It will pose a serious challenge to the steps being taken by the government to lessen the crisis.

More than 2.5 million foreclosed units will be sitting on the shop shelves and continue to do so well into 2009. This was the opinion of Michelle Meyer of Lehman Brothers Holdings. The decline in the prices of the houses nationally will be 20% by 2009. The lowest fall will be in California, Florida, Arizona and Nevada.

These last four states had seen the maximum hectic activity in housing during the preceding years. There was a scramble for sub-prime loans to feed a gargantuan appetite for houses. Now in equal intensity the real estate prices are falling.