Foreclosure rate way down in Utah

Foreclosure rate way down in Utah
THE RATE OF foreclosed homes in Utah has fallen significantly in the last 12 months. Utah, who used to be in the top 10, is now at 35 with a foreclosure rate of only 1.79 percent.

by Shain Gillet
06.04.09 - 01:19 pm

DAVIS COUNTY — What a difference a year makes.

By mid-2008, Commerce CRG reported that the foreclosure rate in Utah was in the top 10 in the country.

By June, Utah was ranked fifth on the list. As the number of new homes being built declined, the rate of foreclosures reached a high for the state that people hadn’t seen in decades.

Now, according to Commerce CRG, Utah stands at 35 on the list; a vast improvement from the numbers in 2008.

The top five states at the top of the foreclosure list now include Florida, Nevada, Arizona, California and Ohio.

“The top four states account for nearly 44 percent of all foreclosures in the U.S.,” said Jim Wood of the Bureau of Economic and Business Research for the University of Utah. “The 660,000 foreclosures in those states have dragged down housing prices and new home construction nationally.

“The number of foreclosed homes presents formidable competition for local home builders.”

The rate of foreclosed homes in Utah is 1.79 percent, with 7,891 homes being foreclosed. Florida, at the top of the list, has nearly 9 percent of its homes in foreclosure with more than 320,000 homes being foreclosed.

“Fortunately, the magnitude of the foreclosure problem is not nearly as severe as the hardest hit states,” said Wood. “However, Utah’s foreclosure rates are rising rapidly from 6,298 in the third quarter 2008 to 7,891 by the end of the year, an increase of more than 1,500 homes.”

Utah’s foreclosure rates are currently half that of the national rate; however, the state has historically been volatile with its numbers, rising much higher than the national average at times.

Wood also said the foreclosure rate in Utah is not likely to rise above the national level this time around, even with the number of job losses and the collapse in housing prices.

“Nevertheless, there is little evidence to suggest that Utah won’t break the foreclosure record of 2.2 percent set in 2002,” said Wood. “It is unlikely that the foreclosure rate will reach 3 percent in the state, which could affect up to 13,000 homes.”

Wood cautioned that even though the housing market will recover, it will take much longer than people expect.

“Even if only 50 percent of the likely 13,000 homes in foreclosure end up unoccupied, those 6,500 homes could represent a substantial competitive force for struggling home builders,” said Wood. “In an environment where new home building has fallen to such low levels, the increasing number of foreclosed properties will prolong Utah’s housing slump and is sure to weaken a recovery.”

sgillet@davisclipper.com
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