TheStreet.com Utah Bank Ratings as of April 29, 2009

TheStreet.com Utah Bank Ratings as of April 29, 2009

Heritage Bank	St George			A+
OptumHealth Bank	W Valley City			A+
Brighton Bank	Salt Lake City			A-
Cache Valley Bank	Logan			A-
GE Capital	Salt Lake City			A-
State Bank	Cedar City			A-
Utah Independent Bank	Salina			A-
Advanta Bank	Draper			B+
Bonneville Bank	Provo			B+
LCA Bank Corp	Park City			B+
Marlin Business Bank	Salt Lake City			B+
Medallion Bank	Salt Lake City			B+
Sallie Mae Bank	Murray			B+
Transportation Alliance Bank	Ogden			B+
Wright Express Financial	Salt Lake City			B+
ADB Bank	Cedar City			B
American Bank	Provo			B
CIT Bank	Salt Lake City			B
Continental Bank	Salt Lake City			B
First Electronic Bank	Sandy			B
First National	Morgan City			B
UBS Bank	Salt Lake City			B
World Financial Capital Bank	Salt Lake City			B
Bank of Utah	Ogden			B-
BMW Bank	Salt Lake City			B-
Central Bank	Provo			B-
Frontier Bank	Park City			B-
GMAC Bank	Midvale			B-
Lewiston State Bank	Lewiston			B-
Merrill Lynch Bank	Salt Lake City			B-
American Express Bank	Salt Lake City			C+
EnerBank USA	Salt Lake City			C+
GE Money Bank	Salt Lake City			C+
Grand Valley Bank	Heber			C+
WebBank	Salt Lake City			C+
Zions First National	Salt Lake City			C+
Arcus Financial Bank	Salt Lake City			C
Blue HealthCare Bank	Sandy			C
Capmark Bank	Midvale			C
Celtic Bank	Salt Lake City			C
Town & Country Bank	St George			C
Village Bank	St George			C
American Express	Salt Lake City			C-
Franklin Templeton Bank & Trust	Salt Lake City			C-
Liberty Bank	Salt Lake City			C-
Merrick Bank	S Jordan			C-
Morgan Stanley Bank	Salt Lake City			C-
Pitney Bowes Bank	Salt Lake City			C-
Proficio Bank	Salt Lake City			C-
Wells Fargo Bank	Ogden			C-
Republic Bank	Bountiful			D+
Holladay Bank & Trust	Salt Lake City			D
Prime Alliance Bank	Woods Cross			D
Utah Community Bank	Sandy			D
Bank of American Fork	American Fork			D-
Barnes Banking Co	Kaysville			D-
Capital Community Bank	Provo			D-
First National	Layton			D-
First Utah Bank	Salt Lake City			D-
Gunnison Valley Bank	Gunnison			D-
Home Savings Bank	Salt Lake City			D-
SunFirst Bank	St George			D-
Target Bank	Salt Lake City			D-
Western Community Bank	Orem			D-
Centennial Bank	Ogden			E
America West Bank	Layton			E-
Lehman Brothers Commercial Bk	Salt Lake City			E-
Escrow Bank	Midvale			U

Utah’s Economic Weakness Expected to Continue into 2010

Utah’s Economic Weakness Expected to Continue into

by Zions Business Resource Center

The Utah economy is suffering the same recession disease experienced by the vast majority of states and is likely to continue so into 2010, according to the Spring 2009 issue of Zions Bank's "Insight - Economic News of Utah and the Nation," released today.

"The weakest economic performance in the Beehive State in nearly 50 years is somewhat surprising since the state led the nation in the percentage growth in employment two to three years ago," says Jeff Thredgold, economic consultant to Zions Bank and author of "Insight". "Those who believe Utah is largely insulated from developments across the nation and around the globe merely need look at events of the past 12 months for a different conclusion."

The Utah economy suffered a net loss of 26,000 jobs over the most recent 12-month period, a decline of 2.1 percent. Even more painful employment contraction is found among most of Utah's neighbors, with the exception of energy-rich Wyoming. Nonetheless, job losses across the Utah economy have left few sectors untarnished.

The quarterly "Insight" publication features updates on current and projected economic and financial developments for the state of Utah, the nation, and the global economy. The Spring 2009 issue also examines the Federal Reserve's efforts to stabilize the economy. Following are a few highlights from the Spring 2009 issue of Insight:

* The state's goods production sector has seen 22,000 jobs disappear, while the state's larger service-providing sector has fared better. Service sector losses have totaled 4,000 during the most recent 12-month period. A majority of service-providing sectors experienced job losses, largely offset by significant job gains in education & health services and government.

* Utah's home building market has suffered the same indignities of overbuilding as found in many markets across the nation. Utah housing starts are not likely to grow by any real measure until excess inventories of unsold homes are cleared from the market. Still, prior excessive overbuilding and home price appreciation in Arizona, California, and Nevada have led to much greater pain and downward price adjustments in those states than found across Utah. A key factor boosting the demand for Utah housing in coming years will be the nation's fastest rate of population growth. The nation's highest fertility rate, combined with expected solid levels of net in-migration, should lead to rising demand for new homes and multi-family properties.

Utah hits home-buying, construction stimulus cash bonanza

Utah hits home-buying, construction stimulus cash bonanza
Economy » One grant went toward a $700,000 house.

By Robert Gehrke, The Salt Lake Tribune
Updated: 04/28/2009 07:31:58 AM MDT

Home builders say a state grant program designed to entice Utahns to buy new homes is working, with people flocking to take advantage of the $6,000 incentive and creating a demand that they hope will get the construction industry moving again.

To date, the Home Run Program has awarded more than 530 grants to homebuyers, about $3.2 million in all. But not all of the grants are going to prospective homeowners who are scraping together money to buy a house.

In fact, there is no limit on the price of homes that qualify for the program. As a result, a handful of the 312 taxpayer-funded grants awarded in the first month have gone to help buy homes worth more than $500,000, with one home purchased for more than $700,000. The
Utah Housing Corp. provided a breakdown of grants in the program's first month. Another 219 grants were awarded in the past two weeks.

"Is that the best use of public funds?" asks Steve Graham, director of the Utah Community Reinvestment Coalition. "Obviously the Legislature and the governor felt it was. I focus on affordable housing, so certainly we would have loved to see that kind of funding go to low- and moderate-income homes."

But, Graham said, the program was aimed at recharging the construction industry, not helping people afford a home. In that sense, he thinks the program will probably prove beneficial.

And backers say the Home Run program is paying early dividends, with developers seeing increased salesand one real estate expert, Ivy Zelman of Zelman & Associates in New York, picking Utah as the No. 1 market in the country poised to recover from the housing slump, in part because of the grants.

"The response has been overwhelming," said Curt Dowdle, executive officer with the Salt Lake Homebuilders Association. "It's been the single greatest stimulus that the local homebuilders have had."

The program which started March 16 uses $10 million of federal stimulus money to provide $6,000 grants to individuals buying never-lived-in homes to get those houses off the market and create demand for construction, an industry that has lost 18,000 jobs during the recession.

The state grant can be combined with a federal tax rebate of $8,000 for first-time homebuyers. Some builders also are adding their own incentives.

A study by University of Utah economist James Wood said the demand created by the program would put an estimated 8,800 people to work.

Not surprisingly, the bulk of the grants have been awarded to homes in the suburbs and exurbs, which were Ground Zero for the housing construction boom in the early half of the decade.

One in six of the homes qualifying for the grants were in South Jordan, West Jordan or Herriman. Another 17 percent were purchased in Eagle Mountain, Lehi, Saratoga Springs or American Fork.

Echo Hall said the $6,000 in assistance was "huge" for her when she bought her South Jordan townhome.

"It just made it all possible for me, because I was really struggling to find an existing place that I loved and was in a good location for the right price," she said.

Kim Hagedorn said she had already made the decision to buy her new home in the Daybreak community and was about to close when the Home Run program kicked in. She used the $6,000 to pay her closing costs, rather than roll them into her loan.

"It was just perfect timing," she said.

More than 80 percent of the Home Run-qualifying homes were bought for less than $300,000. But a handful -- sixteen of the 312 grants awarded in the first month -- went to homes worth more than $400,000.

The Utah Housing Corp. would not provide details on those purchases, citing federal privacy laws.

Wood's study found that 400 of the 2,900 surplus new homes on the market were priced at more than $500,000. In those cases, says Wood, the enticement of $6,000 is probably marginal. "I would think, though, for those several hundred under $300,000, it was very important," he said.

"That is a little difficult to swallow. I think people, their eyebrows should rise a little bit," said Graham of those unusual cases where the grant was given to high-priced homes.

Sen. Wayne Neiderhauser, R-Sandy, who was on the committee that formulated the program, said there was discussion of putting a $400,000 cap on the value of the home prices. That was ultimately abandoned in favor of income limitations of $75,000 per person or $150,000 per household.

But homeowners who have equity in their existing home could sell and get the grant if they want to upgrade.

"We knew there might be a couple of the outliers," said Niederhauser, "but we weren't that concerned as long as the bulk of the homes were in range of the target we had."

Dowdle, of the Homebuilders group, said that, in hindsight, some price restrictions probably would have been helpful.

"I think [the Legislature's] intent was to apply it to people who really needed the help," he said. "I think there are some cases where this grant didn't really go to people who needed it. But you've still stimulated a transaction."

Economic Update - Bear Stearns' Bum Real Estate, Revealed

Economic Update - Bear Stearns' Bum Real Estate, Revealed

April 24, 2009
By: Dees Stribling, Contributing Editor, Commercial Property News

Bear Sterns Cos. was in the news again Thursday, in case anyone remembers back far enough to recall the last time it was big news--a time when the disappearance of that company into JPMorgan Chase seemed unfortunate, but not necessarily a harbinger of vast financial problems ahead. Which, in fact, it turned out to be.

Now the Federal Reserve has released something of an autopsy for the company, detailing the kinds of assets it accepted from Bear Stearns (the ones JPMorgan didn't want) and which of them caused losses for the Fed since then.

The biggest losses in the former Bear Stearns portfolio, as of year-end 2008? Real estate. As of the end of last year, the central bank had written down the value of the former Bear Stearns commercial mortgage holdings to $5.6 billion, or down about 28 percent. The value of the former Bear Stearns residential mortgage holdings was written down 38 percent, to $937 million.

The latest monthly Moody’s/REAL National All Property Type Aggregate Index was also released on Thursday, indicating that the total value of U.S. commercial properties has retreated to where they were in March 2005. The index measures commercial valuation by surveying changes in sale prices, just as the Standard & Poors Case-Schiller Home Price index does for residential properties.

The latest Case-Schiller index put U.S. residential values back at October 2003, incidentally. Optimistic analysts say that means a bottom is near for housing; their more pessimistic colleagues say, are you kidding? No bottom yet.

In any case, the National Association of Realtors reported that existing house sales dropped 3 percent in March when compared with February, to a seasonally adjusted annual rate of 4.57 million units, and down 7.1 percent when compared with March 2008. The median price of houses that sold during March was $175,200, which was actually an uptick from February, when the median was $168,200. Compared with March 2008, however, the median price in March 2009 was down about 12 percent.

Under the radar screen, which seems to show little but bad news these days, some fairly large commercial property leasing deals are still getting done. For instance, Sanyo Logistics Corp., a logistics services provider and business unit of Sanyo Electric Co., inked a lease this week with landlord ProLogis for 215,000 square feet of recently completed distribution space in southwest suburban Romeoville, Ill., near Chicago. This followed a similarly sized deal in Japan between the two companies last month.

If anything, such deals show that real estate--always a game of relationships--is even more relationship-oriented in the depths of the recession. The Chicago lease is the seventh one between the two companies, and Sanyo now leases roughly 2 million square feet in ProLogis distribution facilities in Southern California, metro Chicago and various locations throughout Japan.

"Customer relationships are the backbone of our operations and have always been important," Doug Kiersey, senior vice president & Midwest regional director at ProLogis, told CPN. "But they're even more critical in this economic environment."

Wall Street had a zig-zag sort of day on Thursday, but the major indices eventually edged upward. The Dow Jones Industrial Average was up 70.49 points, or 0.89 percent, while the S&P 500 was up 0.99 percent and the Nasdaq up 0.37 percent.

Making the best of crisis in Utah

Making the best of crisis in Utah

By Bob Bernick Jr., Deseret News
Published: Thursday, April 23, 2009 11:53 p.m. MDT

They argued over money versus people. They cut programs and employees. And they were saved by a federal government that many of them love to hate.

Now, a new report shows that Utah legislators have placed this state in a better financial situation than most of their lawmaking colleagues in the 49 other states.

Across the nation, state governments have been hit especially hard by the economic recession — facing total budget shortfalls of $62.4 billion, says the National Conference of State Legislatures, a study and training association for the elected bodies and their staffs.

Utah and 43 other states have already held their annual legislative sessions this year, balancing budgets for both the current and next fiscal years. So the new NCSL report has complete budget data for most states.

Utah's 45-day session ended March 12, with legislators trimming around $1 billion from the state's $10.6 billion spending plan for next fiscal year, which starts July 1.

Unlike most states, Utah lawmakers did it without raising any general taxes. The vehicle-registration fee was increased by $20, however.

Speaking for the 50 legislatures, NCSL executive director William T. Pound said, "Legislators were left with only tough and unpopular options to balance state budgets."

Utah is a small state, in terms of its population and the size of its state budget. Many U.S. cities and counties have more people and higher budgets than Utah.

"State fiscal directors are using terms like 'grim,' 'bleak' and 'dire' to describe the situation," the new report says.

Hawaii's revenues have dropped dramatically, as have visitor arrivals. Its unemployment rate is at a 30-year high. New Jersey's fiscal situation "is the most dire in recent history."

But as bad as 2009 is for the states, 2010 will be even worse, says Corina Eckl, director of NCSL's Fiscal Program.

Among all the states, there will be a "jaw-dropping gap" between revenues and set budgets "of at least $121 billion" next year, she said.

And many states are also predicting further shortfalls for 2011 and beyond.

That is exactly what worries Utah House Speaker David Clark, R-Santa Clara, who recently said he greatly fears what may be coming for Utah. That's one reason GOP legislative leaders balanced the 2010 budget without tapping the state's $414 million Rainy Day Fund, or spending any of the $100 million set aside in the state's education fund a year ago.

Gov. Jon Huntsman Jr. had a similar note of concern, saying that while Utah is still better off than many states, it's too soon to say the economy has turned the corner.

"I think we're bouncing along the bottom," he said during a taping Thursday of his monthly press conference on KUED Channel 7.

The only bright spot for the states, says the NCSL report, was the federal stimulus money. "Without this money, state finances would be even worse," the report says.

Still, Utah legislators were not opposed to biting the hand that fed them. Conservative lawmakers actually passed a resolution criticizing President Barack Obama and the Democratic-controlled Congress' $800-billion-plus stimulus-package spending bill.

But that bill brought Utah $1.6 billion, much of it allocated by those conservative legislators to slim down program and employee cuts.

Instead of having to cut next year's spending by 15 percent, most programs will see 7 percent cuts, with public education getting only a 5.2 percent cut.

Thousands of state jobs were saved, at least through next fiscal year, which ends June 30, 2010.

"The fiscal situation facing states is like a bad horror movie," Eckl said. "The details get more gruesome, and the story never seems to end."

The report said the "current state fiscal crisis began in fiscal year 2008 for 19 states and Puerto Rico. This means that fiscal year 2011 will be the fourth consecutive year of fiscal problems for many states, with no immediate end in sight."

E-MAIL: bbjr@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Salt Lake County existing home sales down from '08

Salt Lake County existing home sales down from '08
Nationally » March home sales are down by 3 percent

Salt Lake Tribune Staff And Wire Services
Updated:04/23/2009 06:44:56 PM MDT

Sales of existing homes in Salt Lake County rose in March over the previous month but fell 25 percent from a year ago.

Nationally, the spring home selling season is getting off to a lackluster start, with sales falling more than expected from February levels.

In Salt Lake County, sales of existing homes and condominiums climbed from 590 homes and condos in February to 718 in March, a 22 percent increase, the Salt Lake Board of Realtors said.

March's sales, however, are still down 25 percent compared with March 2008, when 960 homes and condos changed hands.

The median price of homes and condos sold in March was $223,750, nearly the same as February's median of $223,450, but down 1.4 percent from a median sales price of $227,000 in March 2008.

The median selling price of homes and condos in Salt Lake County is still off 8 percent from a peak of $243,700 in June 2007.

U.S. Home sales fell 3 percent to an annual rate of 4.57 million in March from a downwardly revised pace of 4.71 million units in February, the National Association of Realtors said Thursday.

Sales had been expected to fall to an annual pace of 4.7 million units, according to Thomson Reuters.

The results were "a little disappointing," given that homes are more affordable than they have been in years and mortgage rates are near record lows, said Lawrence Yun, the group's chief economist.

Nationally, the median sales price in March was $175,200, a plunge of 12.4 percent from a year ago, but higher than February's median price of $168,200. While median sales prices typically rise slightly in early spring, the 4 percent monthly increase was larger than expected.

Also Thursday, the Labor Department reported that initial claims for unemployment compensation rose to a seasonally adjusted 640,000 last week, up from a revised 613,000 the previous week.

In March, the jobless rate hit 8.5 percent, with businesses slashing a net total of 663,000 jobs.

The four-week average of claims for unemployment benefits dropped slightly to 646,750, about 12,000 below the peak in early April. Goldman Sachs economists have said a decline of 30,000 to 40,000 in the four-week average is needed to signal a peak.

In another sign of labor market weakness, the number of people continuing to claim benefits rose to 6.13 million, setting a record for the 12th straight week. As a proportion of the work force, the total jobless benefit rolls are the highest since January 1983. The continuing claims data lag initial claims by a week.

4 states have worst problems with failed mortgages

4 states have worst problems with failed mortgages

Associated Press
Published: Wednesday, April 22, 2009 12:04 a.m. MDT

WASHINGTON — The 26 U.S. cities with the worst foreclosure problems are concentrated in four states — California, Florida, Arizona and Nevada, a report released shows.

The report on foreclosures for the first quarter by RealtyTrac Inc. said the highest foreclosure rates were found in Las Vegas; Merced, Calif.; and the Cape Coral-Fort Myers area in Florida. Next on the list were the California metro areas of Stockton, Riverside, Modesto, Bakersfield and Vallejo-Fairfield.

Rounding out the top 10 were Phoenix and Port St. Lucie, Fla. Outside of the four high-foreclosure states, the worst foreclosure rates were in Boise City, Idaho (No. 27) and Greeley, Colo. (No. 29).

Three Utah metro areas were among the 100 cities listed in the report. Provo-Orem ranked 37th, with Salt Lake City at 62nd and Ogden-Clearfield ranked 75th.

The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break.

Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same period a year earlier, RealtyTrac said last week.

The big unknown for the coming months is President Barack Obama's plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans.

The Obama administration expects it to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace the efforts, despite a promise of $75 billion in incentive payments.

Contributing: Jasen Lee, Deseret News
© 2009 Deseret News Publishing Company | All rights reserved

Utah loses more jobs in March

By Jasen Lee, Deseret News
Published: Thursday, April 16, 2009 5:31 p.m. MDT

Economists say a day will come when Utah will again boast about the addition of more jobs to the state's growing economy. Unfortunately, that day isn't here yet.

For the fifth consecutive month, Utah saw its jobless rate increase, the state Department of Workforce Services said Thursday.

The U.S. Bureau of Labor Statistics reported that Utah's nonfarm wage and salaried job count for March 2009 contracted by 2.6 percent, putting the state's overall unemployment rate at 5.2 percent. Over the past year, approximately 32,800 jobs have been lost from the Utah economy.

Workforce Services' chief economist, Mark Knold, said the worst could still be to come.

"It's going to push up into 6 percent and probably into 7 percent before this is all said and done," he predicted.

The peak unemployment time for the state could come about this time next year, he said.

Knold said that the state's jobless rate sat at 2.4 percent in early 2007, but since then, the Utah economy has seen a relatively steady increase in the number of jobs lost from month to month.

Last March, the state's jobless rate was 3.3 percent, which translated into a 1.9 percentage-point increase over the past 12 months. Approximately 71,700 Utahns were considered unemployed in March 2009, compared with 45,800 last March.

Utah's February 2009 unemployment rate was 5.1 percent. The U.S. unemployment rate continued to rise, reaching 8.5 percent for March.

"We have several more months of additional falling numbers ahead of us yet, but there are some encouraging signs, or 'green shoots,' that may be emerging in the national economy," Knold said Thursday in a news release. "These include a stock market that probably has moved above its low point, national housing sales showing an uptick and unemployment claims — though still harmfully high — no longer rising.

"These sprouts signal an approaching bottom, which is the next reference point along the path of this current business cycle."

Knold said, however, that he expects to see similar figures next month as the state continues to struggle on the job front.

"The job-loss number will be deeper; the unemployment rate will be higher," he told the Deseret News. "We anticipate that we're going to keep doing that all the way through … the third quarter of this year and maybe a few months beyond that."

Jobs losses in Utah may begin to stabilize late this year or early next year with the unemployment rate topping out in the 8 percent range, he added.

He said that for years prior to the national economic meltdown, Utah's employment picture was often quite positive, and he stressed that it would be again someday. But for now, the state finds itself in what is likely a prolonged downward trend.

"The economy operates like that. It gets in ruts where it's real good, then it will change and go into rut where it's bad for a while," Knold said. "A couple of years from now, we'll be talking about a good rut again."

E-MAIL: jlee@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Early Indicators Show Housing Stimulus is a Home Run

Early Indicators Show Housing Stimulus is a Home Run


by Grant S. Whitaker, 
President and Chief Executive Officer, 
Utah Housing Corporation

Utah is only one month into our economic stimulus for housing, and house sales are hopping. Nearly 250 people have already purchased homes with $6,000 Home Run Housing Grants. With 1,600 grants available, they could be gone in a matter of months.

March activity in the Salt Lake housing market scored among the highest in the country, according to Zelman & Associates, a leading national real estate research firm that measures activity in 55 markets around the country. The Home Run grant program is cited as a key factor.

Why is housing so important to our economic turnaround? It's this simple: the housing crisis led us into the recession and housing can lead us out. An oversupply of new unsold homes and a slow rate of sales led to unstable housing prices, major job losses in the residential construction industry and a decline in consumer confidence. Some 18,000 construction related workers lost jobs over the last two years, triple the loss of any other sector. The Home Run housing grant is pulling qualified buyers back into the market, thus generating jobs, removing excess industry, stabilizing home values and restoring consumer confidence.

Jim Wood, director of the University of Utah Bureau of Economic and Business Research, projects that nearly 9,000 jobs will be created by the 1,600 Home Run grants. He projects some $182 million in construction earnings and $324 million in total earnings. Putting construction workers back to work puts our economy back to work. That's why the Salt Lake Chamber put this as one of its key policy priorities in its Can-Do economic stimulus plan.

CBRE: Property Values Down 20 Percent Since 4Q07

April 16, 2009
By: Tonie Auer, Contributing Correspondent, Commercial Property News

Since the fourth quarter of 2007, commercial real estate values have dropped about 20 percent altogether, a price decline worse than those in the early 1990s, said CB Richard Ellis analysts as part of a live web presentation Wednesday.

Between the fourth quarter of 2007 and the end of 2008, commercial real estate prices dropped 11.5 percent with preliminary indications for the first quarter of this year looking like another 10 to 12 percent decline adding up to a cumulative impact of around 20 percent, said Raymond Torto, global chief economist with CBRE Research and Consulting.

“By contrast to what happened in the 1990s, we’re within the first year of declines. Then, the first year’s decline was 4 percent. Things are dropping faster in the U.S. this time,” Torto noted.

And the falloff in prices has been widespread. In the United Kingdom, the decline in values is about 39 percent, which is also a faster decline than what occurred in the 1990s downturn, Torto added. “If you look at the U.K. decline versus the U.S. decline, they are similar if you compare the two of them. America is slow compared to the U.K.,” said Brian Stoffers, president of CBRE Capital Markets. “If you talk to the professionals, things are much more severe than what is shown the index at this juncture.”

Valuation levels are off today anywhere from 25 to 35 percent versus the peak pricing in 2007, said Greg Vorwaller, COO of CBRE Capital Markets.

“In the U.K., I think (the 39 percent drop in values) is on the button,” said Jonathan Hull, executive director of EMEA Capital Markets. “If you look at the market as a whole, different sectors and different countries are moving at different speeds. The correction in the prime markets may not be as severe as that, but in the secondary markets it may be even greater than 39 to 40 percent. It is mainly driven on the capital side.”

But London has seen faster correction than other markets and is leading the way in comparison to the U.S., Hull said. The correction in the U.K. during the course of this year is on the rental side more than the capital side.

“If you look at the London market today, there are more transactions as we speak,” Hull said. “Activity is improving. In the last two weeks of March, there were 700 million pounds of transactions into offer. That is a major movement compared to the rest of quarter," he noted, adding that capital in the London market is driven by German market funds along with some private equity.

Early Indicators Show Housing Stimulus is a Home Run

by Grant S. Whitaker, 
President and Chief Executive Officer, 
Utah Housing Corporation

Utah is only one month into our economic stimulus for housing, and house sales are hopping. Nearly 250 people have already purchased homes with $6,000 Home Run Housing Grants. With 1,600 grants available, they could be gone in a matter of months.

March activity in the Salt Lake housing market scored among the highest in the country, according to Zelman & Associates, a leading national real estate research firm that measures activity in 55 markets around the country. The Home Run grant program is cited as a key factor.

Why is housing so important to our economic turnaround? It's this simple: the housing crisis led us into the recession and housing can lead us out. An oversupply of new unsold homes and a slow rate of sales led to unstable housing prices, major job losses in the residential construction industry and a decline in consumer confidence. Some 18,000 construction related workers lost jobs over the last two years, triple the loss of any other sector. The Home Run housing grant is pulling qualified buyers back into the market, thus generating jobs, removing excess industry, stabilizing home values and restoring consumer confidence.

Jim Wood, director of the University of Utah Bureau of Economic and Business Research, projects that nearly 9,000 jobs will be created by the 1,600 Home Run grants. He projects some $182 million in construction earnings and $324 million in total earnings. Putting construction workers back to work puts our economy back to work. That's why the Salt Lake Chamber put this as one of its key policy priorities in its Can-Do economic stimulus plan.

CBRE: Property Values Down 20 Percent Since 4Q07

April 16, 2009
By: Tonie Auer, Contributing Correspondent, Commercial Property News

Since the fourth quarter of 2007, commercial real estate values have dropped about 20 percent altogether, a price decline worse than those in the early 1990s, said CB Richard Ellis analysts as part of a live web presentation Wednesday.

Between the fourth quarter of 2007 and the end of 2008, commercial real estate prices dropped 11.5 percent with preliminary indications for the first quarter of this year looking like another 10 to 12 percent decline adding up to a cumulative impact of around 20 percent, said Raymond Torto, global chief economist with CBRE Research and Consulting.

“By contrast to what happened in the 1990s, we’re within the first year of declines. Then, the first year’s decline was 4 percent. Things are dropping faster in the U.S. this time,” Torto noted.

And the falloff in prices has been widespread. In the United Kingdom, the decline in values is about 39 percent, which is also a faster decline than what occurred in the 1990s downturn, Torto added. “If you look at the U.K. decline versus the U.S. decline, they are similar if you compare the two of them. America is slow compared to the U.K.,” said Brian Stoffers, president of CBRE Capital Markets. “If you talk to the professionals, things are much more severe than what is shown the index at this juncture.”

Valuation levels are off today anywhere from 25 to 35 percent versus the peak pricing in 2007, said Greg Vorwaller, COO of CBRE Capital Markets.

“In the U.K., I think (the 39 percent drop in values) is on the button,” said Jonathan Hull, executive director of EMEA Capital Markets. “If you look at the market as a whole, different sectors and different countries are moving at different speeds. The correction in the prime markets may not be as severe as that, but in the secondary markets it may be even greater than 39 to 40 percent. It is mainly driven on the capital side.”

But London has seen faster correction than other markets and is leading the way in comparison to the U.S., Hull said. The correction in the U.K. during the course of this year is on the rental side more than the capital side.

“If you look at the London market today, there are more transactions as we speak,” Hull said. “Activity is improving. In the last two weeks of March, there were 700 million pounds of transactions into offer. That is a major movement compared to the rest of quarter," he noted, adding that capital in the London market is driven by German market funds along with some private equity.

Utah ranks 9th in foreclosures

By Jasen Lee, Deseret News
Published: Wednesday, April 15, 2009 9:48 p.m. MDT

Utah had the ninth-highest rate of foreclosure filings in the nation during the first three months of this year, according to a report released Wednesday.

The RealtyTrac U.S. Foreclosure Market Report for the first quarter of 2009 showed that one in every 151 households had a foreclosure filing, just above the national average of one in every 159 households.

The rate of foreclosure filings in Utah jumped nearly 87 percent compared to the same period last year and 12.47 percent over the previous month, the report stated. Utah replaced Ohio in the top 10 quarterly rankings, Daren Blomquist, RealtyTrac marketing and communications manager, told the Deseret News.

"The Western states are getting hit pretty hard in general, and Utah is following that trend," he said.

Blomquist attributed the prevalence of Alt-A interest loans as a major contributor to the increase in foreclosure filings nationwide.

An Alt-A loan, short for alternative A-paper, is a category of mortgage that has a risk potential that is greater than prime but less than subprime, Blomquist said.

"There were a lot of those loans given out over the last few years," he said. "Those are the next wave of loans that are resetting."

He said as the number of loans with variable interest rates adjusts, the number of homeowners defaulting likely would increase.

Utah ranked 18th in the nation in the number of homes in foreclosure during the first quarter of 2008. At the time, one in every 274 Beehive State households had received a foreclosure filing during the period.

Nationally, foreclosure filings were up 17 percent over February 2009, and they were 46 percent higher than March 2008. The March and first quarter 2009 totals were the highest monthly and quarterly totals recorded since the real estate marketing firm, based in Irvine, Calif., began issuing its report in January 2005.

RealtyTrac publishes a national database of foreclosure and bank-owned properties from approximately 2,500 counties across the nation.

Nevada continued to have the country's highest state foreclosure rate during the quarter, registering one filing for every 27 housing units — over five times the national average, the report said. The state's rate was up 19 percent compared to the previous quarter and increased almost 111 percent compared to the first quarter of 2008.

Arizona posted the nation's second-highest state foreclosure rate for the period, with one in every 54 households receiving a foreclosure filing. California had the third-highest rate, with one in every 58 housing units receiving a filing. Florida, with one in every 73 households recording a filing, ranked fourth, followed by Illinois, with one in every 135 households receiving a foreclosure filing.

The states of Michigan, Georgia, Idaho, Utah and Oregon rounded out the 10 states with the highest rate of foreclosure filings.

Foreclosures "came back with a vengeance" last month and are likely to keep rising, said Rick Sharga, RealtyTrac's senior vice president for marketing.

Contributing: The Associated Press

E-mail: jlee@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Utah ranks 9th in foreclosures

By Jasen Lee, Deseret News
Published: Wednesday, April 15, 2009 9:48 p.m. MDT

Utah had the ninth-highest rate of foreclosure filings in the nation during the first three months of this year, according to a report released Wednesday.

The RealtyTrac U.S. Foreclosure Market Report for the first quarter of 2009 showed that one in every 151 households had a foreclosure filing, just above the national average of one in every 159 households.

The rate of foreclosure filings in Utah jumped nearly 87 percent compared to the same period last year and 12.47 percent over the previous month, the report stated. Utah replaced Ohio in the top 10 quarterly rankings, Daren Blomquist, RealtyTrac marketing and communications manager, told the Deseret News.

"The Western states are getting hit pretty hard in general, and Utah is following that trend," he said.

Blomquist attributed the prevalence of Alt-A interest loans as a major contributor to the increase in foreclosure filings nationwide.

An Alt-A loan, short for alternative A-paper, is a category of mortgage that has a risk potential that is greater than prime but less than subprime, Blomquist said.

"There were a lot of those loans given out over the last few years," he said. "Those are the next wave of loans that are resetting."

He said as the number of loans with variable interest rates adjusts, the number of homeowners defaulting likely would increase.

Utah ranked 18th in the nation in the number of homes in foreclosure during the first quarter of 2008. At the time, one in every 274 Beehive State households had received a foreclosure filing during the period.

Nationally, foreclosure filings were up 17 percent over February 2009, and they were 46 percent higher than March 2008. The March and first quarter 2009 totals were the highest monthly and quarterly totals recorded since the real estate marketing firm, based in Irvine, Calif., began issuing its report in January 2005.

RealtyTrac publishes a national database of foreclosure and bank-owned properties from approximately 2,500 counties across the nation.

Nevada continued to have the country's highest state foreclosure rate during the quarter, registering one filing for every 27 housing units — over five times the national average, the report said. The state's rate was up 19 percent compared to the previous quarter and increased almost 111 percent compared to the first quarter of 2008.

Arizona posted the nation's second-highest state foreclosure rate for the period, with one in every 54 households receiving a foreclosure filing. California had the third-highest rate, with one in every 58 housing units receiving a filing. Florida, with one in every 73 households recording a filing, ranked fourth, followed by Illinois, with one in every 135 households receiving a foreclosure filing.

The states of Michigan, Georgia, Idaho, Utah and Oregon rounded out the 10 states with the highest rate of foreclosure filings.

Foreclosures "came back with a vengeance" last month and are likely to keep rising, said Rick Sharga, RealtyTrac's senior vice president for marketing.

Contributing: The Associated Press

E-mail: jlee@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Homebuilder sentiment index soars 5 points

Associated Press
Published: Wednesday, April 15, 2009 1:45 p.m. MDT

LOS ANGELES — Homebuilders are feeling a lot more optimistic that the worst housing downturn in decades may be finally starting to turn around.

An index of builders' confidence released Wednesday posted its biggest one-month jump in five years in April as many homebuyers seized on lower prices and incentives and took advantage of lower interest rates and tax credits.

The National Association of Home Builders/Wells Fargo housing market index climbed five points to 14. While still near historically low levels, the latest index reading is the highest since October.

"This is a very encouraging sign that we are at or near the bottom of the current housing depression," said David Crowe, chief economist for the Washington-based trade association.

The report reflects a survey of 360 residential developers nationwide, tracking builders' perceptions of market conditions. Index readings lower than 50 indicate negative sentiment about the market.

The index hit an all-time low of 8 in January as mounting layoffs, strict mortgage requirements and the worsening U.S. economy sapped demand for new homes.

In response, many builders stepped up sales incentives, slashed prices and trumpeted an $8,000 tax credit for homebuyers enacted in February as part of the Obama administration's economic stimulus package. Mortgage rates, meanwhile, have hovered below 5 percent for weeks, offering an additional inducement for would-be homebuyers.

As a result, homebuilders have reported an uptick in traffic in recent weeks. KB Home, a Los Angeles-based homebuilder, reported last month that new home orders jumped by 26 percent in its fiscal first quarter.

"Some of the most favorable buying conditions in a lifetime are now in place, and they are drawing more consumers back to the market," said NAHB Chairman Joe Robson, a homebuilder from Tulsa, Okla.

Joshua Shapiro, chief U.S. economist for the consulting firm MFR Inc., said the jump reflects the perception the market is improving, but cautioned some builders may be overly optimistic.

"The weakness that preceded it is so pronounced that I think you get a little bit of an exaggeration to people's responses to surveys like this," Shapiro said.

Regionally, builder confidence rose by eight points in the Northeast to 16 and by six points in the Midwest to 14. It climbed by five points in the South to 17 and by four points to 9 in the West.

Builders' gauge of current sales conditions climbed by five points to 13, while builders' expectation of buyer traffic also rose by five points to 14.

The biggest jump came in builders' outlook for sales over the next six months, which climbed 10 points to 25.

In California, a $10,000 tax credit for new home purchases also helped lift sales, according to a separate national survey homebuilders conducted by John Burns Real Estate Consulting

The firm's latest survey shows new home sales, buyer traffic and expectation of future sales all rose since March.

"We think the improvement is attributable primarily to improved affordability," said John Burns, the firm's chief executive. "The new home tax credit in California is also helping."

The improved industry outlook gave battered housing stocks a lift. Shares of Beazer Homes and Lennar got the biggest boost, climbing more than 13 percent in afternoon trading Wednesday.

© 2009 Deseret News Publishing Company | All rights reserved

Renters feeling economic crunch

By James Thalman, Deseret News
Published: Tuesday, April 14, 2009 6:49 p.m. MDT

A national state-by-state status report on rental housing puts data behind what residents have been saying for years: When it comes to Utah's rental market, they can't make it here any more.

According to the National Low Income Housing Coalition, a family in Utah must earn $29,459 a year or $14.16 per hour to afford a modest two-bedroom, $736-a-month rental. That's 216 percent of the $6.55 minimum that average low-income earners make here.

Without assistance, the gap between what people in low-wage jobs earn and what rental housing costs in Utah is simply impossible, said Tara Rollins, executive director of the Utah Housing Coalition, which provided data for the report.

The Out of Reach report assesses the relationship between rental housing costs and the capacity of low-wage earners to pay for it.

"The numbers back what we've been saying the past five years," Rollins said. "Housing costs continue to rise to levels far beyond the reach of low-income workers."

Since 2005, the affordable hourly wage has increased from $12.95 to a little more than $14, she said.

State and local elected officials won't be surprised by the report, Rollins said, but "any effort to help ease the burden low-income Utahns face is basically already spoken for."

Palmer Court, the converted former Holiday Inn downtown, has begun taking new residents, but they are those who were facing homelessness well before the mortgage meltdown began in 2007, she said.

Other findings in the report:

Just 39 percent of Utahns are able to afford a modest, two-bedroom apparent under current market conditions.

Minimum wage workers earning $6.55 per hour must work 86 hours per week to afford a two-bedroom unit.

An extremely low-income household earning $19,361 — 30 percent of Utah's median income of $64,548 — can afford a monthly rent of no more than $484. The standard rent being charged is $736.

The Supplemental Security Income monthly payment is $674. An affordable rent at that income would be $202.

Utah ranks as the 23rd most difficult market nationwide. According to the Out of Reach report, a minimum-wage worker must work 64 ours per week, 52 weeks a year, or a household must have 1.6 minimum wage earners working standard 40-hour weeks all year in order to afford market-rate rents for a two-bedroom apartment in the Salt Lake area.

The report clearly shows a disconnect between what it costs to afford decent rental housing and what low-wage employment actually pays. Renters with the lowest incomes now face increasing rental prices and more competition because families who are losing homes through foreclosure are entering the rental market, according to the report.

"The long-standing structural deficit of rental homes that the lowest income people can afford, exacerbated by the economic recession, will surely lead to more people becoming homeless," said Sheila Crowley, president of the National Low Income Housing Coalition. "We hope that the report will demonstrate to policy makers the urgency of acting now to increase the supply of affordable housing and housing assistance for those who are hit hardest by the recession."

E-MAIL: jthalman@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Tooele Valley Represents One of the Most Attractive Locations for Business in the Western U.S.

by EDCUtah

Just 32 miles southwest of Salt Lake City lies three of Utah's best kept economic development secrets: Tooele County, Tooele City and Grantsville. While the silver and gold mines that drew settlers there in 1849 have long since been quieted, the area is booming and its future couldn't look brighter.

"If I had a dozen shovel-ready industrial parks I could fill them in no time," says Tooele County Economic Development Director Nicole Cline. "Tooele County was once a big secret, but we are now inviting the world."
Primed for Growth

The positive economic development outlook expressed by Cline is equally felt by Tooele Mayor Patrick Dunlavy and Grantsville Mayor Byron Anderson, both of whom are aggressively pushing economic development initiatives forward in their respective cities.

"We think we do economic development really well here," says Mayor Dunlavy. "We've had significant successes over the years and feel really good about the direction the city is going. After his election, the Mayor made job creation a high priority for his office and the city council bought in. "We're all on the same page," he says.

Tooele City is home to the Utah Industrial Depot, one of Utah's premier shovel-ready economic development sites and a prime location for manufacturing and light industrial concerns. Six additional industrial parks are in various stages of development within the area--one in Grantsville, four in the county, and one in Tooele City, being constructed near the Miller Motorsports Park (MMP).
Utah Industrial Depot

The Utah Industrial Depot is a shovel-ready park that sits on 1,400 acres of land formerly used as a military truck refurbishing center for the Tooele Army Depot. The Depot is now a private facility with 2.5 million square feet of competitively priced warehouse and manufacturing space. Some 65 companies currently operate from the Depot, employing approximately 1,100 people. Dunlavy says the Depot is an attractive location because it is comprised of both buildings and improved land with rail service, and can accommodate manufacturing, distribution and light industrial uses.

Last April, Cicero, NY-based Syracuse Castings, a manufacturer of steel, aluminum, and cast iron products for the construction industry, announced it would open a manufacturing operation in the Depot. The new 20,000-square-foot facility represents a $2 million investment by the company and could employ upwards of 90 people within the next five years. Other businesses to recently locate at the Depot include Carlisle SynTech and its Hunter Panels subsidiary, which are part of North Carolina-based Carlisle Companies. Carlisle SynTech and Hunter have built adjacent factories on a 50-acre parcel. Carlisle SynTech manufactures single-ply roofing products and systems and is opening a facility to manufacture its Sure-Weld TPO membranes and accessories. The 250,000-sq. ft. facility is the company's fourth roofing membrane plant in the U.S.
Retail Development

Because a large portion of Tooele Valley residents commute to the Salt Lake City for employment and much of their shopping, both Mayor Dunlavy and Mayor Anderson feel a strong desire to create jobs in their respective cities and both cities are working to build up their retail sectors as well. Tooele City actively participates in the Utah Pavilion at the annual convention of the International Council of Shopping Centers (ICSC) in Las Vegas. Typically Mayor Dunlavy and most, if not all, of the Tooele City Council attend, where they meet with selected retailers in pre-arranged meetings and recruit other targeted retailers at the convention.

Past efforts at ICSC have been quite successful, Dunlavy says. Through ICSC and a lot of additional follow up, the city recruited Big 5, a sporting goods retailer. Initially the Big 5 corporate office wasn't interested in the city, but later changed its mind. The store opened in November 2008 and now ranks ninth in gross sales out of the 395 Big 5 stores in operation, according to Dunlavy.

The city also recruited a Gold's Gym, which helped strengthen Tooele's downtown redevelopment efforts by remodeling an old Albertson's grocery store. Dunlavy says the gym reached $1 million in membership faster than any other store in the chain's history. The city also recruited a Sears store, which opened last December, and is pursuing other targeted retailers at the upcoming ICSC convention in May.

"We really see the value of ICSC. We go with a pre-set strategy; we have pre-set appointments with targeted companies, and work really hard for three days there."

Randy Sant, economic development director for Tooele, has high praise for Tooele City officials: "The mayor and city council really understand what economic development is all about. They understand the need for incentives and infrastructure in order to be competitive in this market and they have worked hard to be ready for the onslaught of companies coming to the area."
Grantsville City is Open for Business

"Any time a business looks like a fit, we go for it," says Mayor Anderson. "Grantsville is an idea place to locate, with close proximity to I-80 and rail lines, attractive land prices, nice people, a rural lifestyle and exceptional recreational opportunities."

Anderson served on the city council before being elected mayor and has developed a strong commitment to economic development in Grantsville.

"We are trying to bring in more business and retail development, so that our residents don't have to look in Tooele and Salt Lake City for their employment or shopping needs. We have two strip malls, but we are looking for something larger, like a hotel and restaurants to locate here."

Four years ago Grantsville landed a Wal-Mart distribution center and approximately 800 jobs. At full build-out the distribution center could employ 1,000 workers. The city is currently working with EDCUtah and Tooele County to recruit several other large businesses to the area, all of whom would provide a good mix of jobs, investment and opportunity.

Anderson says economic development is underway in other parts of his city, as well. One property owner is drawing up plans to create an industrial park and the city is actively promoting retail development.
Tooele Valley Amenities

The amenities that make Tooele County, Tooele City and Grantsville attractive locations for business are lengthy and impressive:

* Exceptional logistics: easy access to Salt Lake International Airport, rail lines leading to Reno and Las Vegas, Nevada, and close access to I-80.
* Quick access to the I-215 corridor (and avoidance of I-15 gridlock).
* A young, skilled workforce. Median age is 28.
* An educated workforce--Utah State University's Tooele campus is booming and many of Tooele School District's high school graduates earn associate degrees in conjunction with their high school diplomas.
* Location of an Advanced Technical Center and Custom Fit Program.
* Large tracts of land available for development.
* Land use regulations that are pro business.
* Accelerated permitting processes.
* Attractive land prices.
* Hub zone designation, giving businesses preferential contracting rights through the federal system.
* Three military bases located in the county: Dugway Proving Ground, Deseret Chemical and Tooele Army Depot.
* More enterprise zones in Tooele County than any other county in the state.
* Location of the Miller Motorsports Park.



Such amenities drew Pittsburgh-based Allegheny Technologies, a manufacturer of specialty metals, to the county in 2008. The company built a $250 million titanium sponge production facility in Rowley and employs approximately 250 people there.
Miller Motorsports Park

Those same amenities helped make Tooele County an attractive location for the Miller Motorsports Park, the $100 million auto, motorcycle and kart racing facility opened in 2005 by the late Larry Miller. The MMP could one day make Tooele County the motor sports capital of North America. It happens to be the largest race track of its kind in North America and due to its size and versatility, is drawing interest from more than just race enthusiasts. Cline says automotive companies and developers of unmanned vehicles want to utilize the test track for their development purposes.

"All in all, the Tooele Valley represents one of the most attractive locations in the western US. We have had great success working with all the communities in the region and look forward to continued recruitment activity in the area," says Jeff Edwards, president & CEO of EDCUtah.

Bright spots in Utah's economy shining through recession

Reported by: Brian Carlson

SALT LAKE CITY (ABC 4 News) - We hear a lot lately about our country's sluggish economy. But believe it or not, it's not all doom and gloom. Several industries in Utah are booming. Right now they're pulling the rest of the state behind them.

International Armoring in Ogden fixes up luxury cars with bullet proof glass, reinforced steel, protective armor then sells the cars overseas.

“They're in the Middle East, they're in Africa they're in South America, in Mexico they're virtually in every corner of the world,” said Mark Burton, CEO, International Armoring.

While many companies are suffering, Burton's export business keeps growing. It's something considered a critical spark to Utah's economic future. Economists said the reason why is it helps Utahns not just pass around the same dollar over and over again.

“You need to have anywhere from a quarter to a third of your economic base be employed in
Export industries for a good health, so that you have that flow of outside money coming into the local economy,” said Mark Knold, Economist, Utah Dept. of Workforce Services.

Last year, Utah saw a lot of it.

In 2008 Utah exports raked in over $10.3 billion dollars.

It's one reason why Utah's top financial experts said our future looks strong.

“The ALEC report that came out a couple of weeks ago listed us as the state as most likely to come out of this first from the economic recession,” said Jason Perry, Exec. Director of Utah’s Governor's Office of Economic Development

Utah's economy doesn't ride on exports alone.

Several Utah economists said our state's diverse economy is holding the state steady. Instead of places like Michigan reliant on the auto industry, Utah is spreading it's wealth over things like tourism, alternative energy, and digital technology, etc. with many industries investing jobs poised to grow in the future.

Utah is seeing a population influx. In fact, it has three of the top 10 fastest growing metro areas in the country, including Provo/Orem, Logan, and St. George. One third of Utah’s population growth is coming from immigration. Economists said that will boost housing sales, and it shows Utah is doing something right.

There's also an influx of businesses coming to Utah. Perry said there are over 125 businesses looking to locate to Utah right now.

“They’re looking for the safest place to invest where there’s a good young labor force, where they can do business for the lowest cost. Utah without question is that place,” said Perry.

There are also several national factors looking good too. Economists said the stock market looks like it’s finally bottomed out, and the housing market is nearly there. Which means it could be all up from here.

As for when the economy will start moving up, economists said it could be as early the fourth quarter of 2009.

Copyright 2009 Newport Television LLC All rights reserved.

Credit crunch leaves trendy mixed-use developments on shaky ground

By Rebecca Palmer, Deseret News
Published: Saturday, April 11, 2009 11:00 p.m. MDT

HOLLADAY — On a drizzly day last spring, the mayor of Holladay climbed into an immense yellow tractor to help break ground at the site of the Cottonwood Mall.

Accompanied by bombastic symphonic music and the cheers of construction workers and local dignitaries, Mayor Dennis Webb then overturned a load of rocky soil, signifying renewal of the mall property into a walkable "European village."

Almost a year later, the dead of winter is again sprouting into a verdant spring but the mixed-use project on the eastern foothills hasn't taken root.

The fenced lot is now blocked off to the public. Its 57 acres are devoid even of tractors, footprints or "coming soon" signs.

"It's sad they haven't built it," said Ellie Drees, who was shopping recently in Macy's department store, the only business open on the block. "I was looking forward to it."

Drees, a German immigrant, used to shop Cottonwood Mall from end to end, she said. She now misses the bustling of customers in the almost-empty Macy's and fears the store could go out of business, like the nearby T.G.I. Friday's restaurant.

Similar scenarios have played out across the Wasatch Front, from Layton to Orem. The largest projects all have stalled, with the exception of The Church of Jesus Christ of Latter-day Saints' City Creek Center development in downtown Salt Lake City.

Smaller projects financed prior to last year's credit crunch are moving forward, but few if any mixed-use ventures — those featuring residential, retail and office space — are seeing the light of day.

Many of the largest projects were billed as one-of-a-kind proposals that would put their respective cities on the map by using New Urbanism trends such as "walkability" and structures built to "human scale."

Some, such as Sandy's high-rise Proscenium, did feature unique architectural plans. But taken as a whole, the trend toward mixed-use projects is more like a flavor-of-the-decade than a novel notion.

"Where it is a problem is where this has become formulaic," said Stephen Goldsmith, a professor of urban planning at the University of Utah. "These are so scientifically produced — housing and retail for a target market (of 13- to 30-year-olds) and a splash of Coldwater Creek. That's what removes the vibrancy. Instead of these organic, self-organizing streets, they might as well become Disneyland."

But Goldsmith was quick to add that he isn't against mixed-use development.

"As long as mixed-use development is understood for its real value, there are only things to be gained from that," the former Salt Lake City planner said.

Fellow academic James Wood, director of the University of Utah Bureau of Economic and Business Research, has researched Utah development extensively.

"Those massive projects, they're all, I think right now, in a holding pattern to see how this (recession) all shakes out," Wood said. "Consumer business is going to be very different once we get through this."

Large projects that have been interrupted statewide include Market Station in South Salt Lake, Station Park in Farmington and Midtown Village in Orem. Other projects, such as a new West Valley City center and redevelopment of Valley Fair Mall, have seen work slowed but not stopped completely.

Most of the projects have been promised future property-tax breaks and infrastructure help from the municipalities in which they are located.

For spots such as the former Cottonwood Mall, where profitable buildings once stood, stalled projects are hurting those same municipalities by depriving them of a commercial tax base.

Wood said he believes some of the largest projects could be forever halted.

"People tend to spend when they feel like they have a lot of wealth," he said. "When markets go south, everyone suffers. There is just too much in the macro market."

When cities approve these large developments and agree to tax-increment financing, they don't look at the "market mosaic" in the valley, Wood said. Elected officials instead rely on property developers to gauge the playing field.

Contributing; Aaron Falk. E-MAIL: rpalmer@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Muted Signs of Life in the Credit Markets

By JACK HEALY, NY TIMES
April 7, 2009

It is hard to miss the news: the stock market has been on a bit of a roll lately. But with far less fanfare, the credit markets, where the financial crisis began, are also showing signs of a spring awakening.

Companies with good credit are borrowing more money in the bond markets. Confidence in the banking industry seems to be returning, despite the daily ups and downs of financial shares. Even junk bonds, the high-risk corporate debt instruments, are luring brave souls again.

The revival is tentative and, like the gains in the stock market, which pulled back on Monday, it may well prove fleeting. But analysts say the improvements suggest that investors are starting to get some of their old nerve back, mainly because of sweeping federal efforts to get credit flowing again.

All of which is welcome news for consumers, companies and the broader economy.

The market for securities made from bundles of car loans and student loans — a vital source of credit — has started to stabilize. Prices of these investments have risen in the last month, suggesting government-run programs to buy or guarantee this type of debt are gaining traction.

Home buyers are seeing some benefits of the credit thaw. Interest rates on a fixed 30-year mortgage fell to 4.61 percent for the week ending March 27, the Mortgage Bankers Association reported, their lowest levels on record. Last year, before the government and central bankers intervened to lower borrowing costs, mortgage rates were more than 6 percent.

“The tone I’m hearing across the board is notably improved,” said Jane Caron, chief economic strategist at Dwight Asset Management, which specializes in debt securities. “Portfolio managers are feeling better about their sectors. The story is the most positive it’s been in months.” Which, admittedly, is not saying too much.

The market for loans and corporate bonds went into lockdown mode last autumn after the collapse of Lehman Brothers. Lending dried up, bond values plunged and skittish banks started charging hefty premiums to part with their money for even a short while.

But huge rescue measures and guarantees by the Treasury and Federal Reserve have helped to shore up the credit markets, and some tentative signs of life in the wider economy are now encouraging lenders and borrowers to rethink their apocalyptic outlooks.

“The fundamentals are still poor, but a lot of bonds are priced for an extraordinarily high default rate,” Ms. Caron said. “We’ve priced in a pretty disastrous outcome, so anything short of disaster bodes well for these bonds.”

On Monday, the Federal Reserve and central banks in Britain, Japan and Europe continued to try to chip away at the credit problem. They announced an agreement that could provide about $287 billion in liquidity to the Federal Reserve, in the form of currency swaps.

The Fed could draw on these lines to provide more liquidity to financial institutions, this time using euros, British pounds, Swiss francs and yen. Last fall, the Fed and other central banks set up swap agreements to provide dollars to foreign banks, and some analysts said the pendulum was now swinging the other way.

“This really underlines the globalization of the monetary system,” said Ashraf Laidi, chief foreign exchange strategist at CMC Markets. “You could say that the global central banks are being used as an indirect means of shoring up liquidity in a nation’s commercial banks.”

Credit markets and stock markets have largely been riding the same updraft in the last four weeks. A swell of optimism, ignited by the government’s new bailout plans and some positive chatter from banks about their profitability, has lifted shares from their lowest levels in 12 years and rescued credit markets, which had been stumbling back toward the bad old days of last year.

Businesses with better credit ratings issued $200 billion of debt in the first quarter, according to Thomson Reuters, compared with $188 billion a year ago.

Even as credit rating agencies predict high rates of default for 2009 and junk-rated companies like General Growth Properties, the shopping mall owner, struggle to avoid bankruptcy, investors are pushing more money into high-yield debt. Junk bonds just ended their best quarter in five years, and a report by AMG Data Services said that $923 million flowed into junk-bond mutual funds last week, the most since 2005.

“We’re definitely getting money coming back,” said Jeremy Hughes, a high-yield portfolio manager at Aviva Investors. “The risk appetite has definitely returned, at least for the time being.”

Yields on junk bonds are about 16.5 percentage points more than Treasuries, a fat premium for risk by historical standards. But the gap has narrowed from nearly 22 percentage points in mid-December, according to Merrill Lynch indexes, and it has fallen over the last four weeks as stocks raced higher.

As the Dow Jones industrial average closed above 8,000 on Friday for the first time since February, other crucial measures of lending also wrapped up a winning week.

The London interbank offered rate, known as Libor, which tracks borrowing costs among banks, fell to 1.16 percent, down from 1.27 percent a month ago and sharply lower than the 4.8 percent interest banks charged each other at the peak of the credit crisis.

The gap between borrowing costs for banks as reflected by the Libor and for the federal government, and, as such, a measure of confidence in banks, was at 0.97 points on Monday, close to its lowest and most optimistic levels since February and about where it was last summer. Last October, as Washington groped to address the financial crisis, the gap, known as the Ted spread, spiked to 4.6 points.

Of course, credit markets are still fragile. Ratings agencies are slashing the credit scores of companies, including General Electric, whose previously triple-A credit rating was cut two notches by Moody’s, to Aa2. Bondholders at General Motors are bracing for the possibility of losing billions of dollars in unsecured debt if the automaker files for bankruptcy protection.

And if unemployment continues to race higher or the stimulus fails to take root and the economy enters a deeper period of decline, many of the tentative gains in credit could come undone, analysts say.

Even if the markets continue to improve tick by tick, some analysts wonder whether they are truly getting better, or merely being kept alive by a huge apparatus of government support systems propping up everything from short-term commercial paper to money markets to home mortgages.

“The question to ask is not whether credit markets have improved,” said Jeff Rosenberg, head of credit strategy research at Bank of America/Merrill Lynch. “The question is, what is the source of the improvement? Can credit markets function without significant government intervention? Indisputably, the answer is no.”

Copyright 2009 The New York Times Company

Report: Utah's business conditions slipped in March

By Brice Wallace, Deseret News
Published: Thursday, April 2, 2009 6:09 p.m. MDT

Utah's small-business environment worsened in March but still was better than it was in January, according to a report issued this week.

The Utah Business Conditions Index, produced by the Goss Institute for Economic Research, was 41.9 in March, down from February's 45.5 but better than January's record-low 36.5.

A figure above 50 indicates an expansionary economy over the course of the next three to six months. The index is based on a survey of the state's supply managers.

March's 41.9 "points to a continuation of the economic recession," the institute said.

"The recession came to Utah about the same time that it hit the U.S.," Ernie Goss, director of the institute and director of Creighton University's Economic Forecasting Group, said in a prepared statement.

Between the beginning of the national recession in December 2007 and February 2008, Utah lost more than 32,000 jobs, for a 2.5 percent reduction, he said. "This rate of job loss is roughly two-thirds that of the nation. Our job indices over the past several months are consistent with an additional 35,000 jobs lost by the end of the third quarter of this year."

Components of Utah's overall index for March were new orders at 50.4, production at 41.6, delivery lead time at 42.3, inventories at 40.4 and employment at 35.0.

Utah is part of a three-state Mountain region that had an index of 39.2 in March, down from February's 44.6 but up from January's record-low 31.6. The figure indicates recessionary conditions for the region through at least the third quarter of 2009, the institute said.

"While the region has clearly dipped into a recession, the overall economic downturn is going to be more shallow for the region than for the nation," Goss said.

Colorado's index was 41.3 in March, down from 43.5 in February but better than January's 30.5. The Wyoming figure was 40.8, worse than February's 44.8 but improved from January's 35.3. The March figure marked first time since surveying began in 1994 that Wyoming's index was below 50 for four consecutive months.

The three-state region's confidence index was at its highest level since January 2007. The index grew to 58.5 in March. It was 31.5 in February and 23.6 in January.

"Our survey was conducted after Treasury Secretary (Timothy) Geithner announced the latest U.S. Treasury bank plan but before the mounting problems of GM and Chrysler surfaced," Goss said. "I think economic expectations, as expressed by supply managers, got ahead of the economic fundamentals."

The institute uses the same methodology as the Institute for Supply Management, which said Wednesday that the national index rose to 36.3 last month from 35.8 in February. It reached a 28-year low of 32.9 in December.

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