Real Estate Information Archive

Unless we see a recovery in the housing market, we won’t really see a recovery in the economy. But is the housing market approaching a bottom? Or does it still have a ways to go?

The answer is critical to understanding the current economic depression.

This is a chart of the S&P/Case-Shiller Home Price Index.

As you can see, it’s plummeted over the last 18 months or so. It shows that U.S. house prices have been spanked hard. And, unfortunately, it shows no sign of bottoming anytime soon.

This makes sense considering the flood of foreclosures hitting the market. In Fort Lauderdale, Florida, homes that were selling for $250,000 during the peak are now going for $70,000 in foreclosure. Repeat this scenario across the country, and you’ll see that home prices still have further to go.

Making matters worse is the 8.1% U.S. unemployment rate and the fact that nobody can find credit to buy a home with. (Less credit means fewer mortgages.)

As the year drags on and foreclosures keep hammering house prices, this trend will continue to drain cash from homebuilders. That means homebuilders such Lennar Corporation (LEN) should continue to see lower share prices as the year wears on.

Are You Burnt-Out? How to Heal and Get Fired Up! Again

by Snowden McFall

Attention Achievers: Beware of Burnout

There is a fire inside you that ignites and burns brightly when you do what you love and you share that joy with others. As you accomplish more and more, living the life of your dreams, your contagious enthusiasm spreads from person to person. When you’re Fired Up!, you can overcome any obstacle and succeed in ways that you never before thought possible. When you’re Fired Up!, you have incredible energy and vitality, and you can continue to accomplish great things.

But every once in a while, that fire starts to flicker and die, and what douses the flame is often burnout. All “doers” face the potential of burnout: overcommitting, doing too much, and losing your drive and energy. If you’re Fired Up! about life and accomplish much on a regular basis, it’s surprisingly easy for burnout to occur. It often starts out as a prolonged period of stress. Or it happens something like this.

You’re working hard, balancing your family and your community obligations, and you’re happy about your life. Because of the adage, “give a busy person something to do and it will get done,” you are asked to take on another big responsibility. It might mean a raise or major growth for your company, so you say “yes.” For a while, everything is fine. You’re putting in more hours at work and getting less sleep, but you can handle it. Your fire is still stoked, although it begins to burn from both ends. And then your father is diagnosed with Alzheimers. Emotionally distressed and guilt-ridden, you spend more time and money taking care of your father and less time taking care of yourself. Pretty soon, you’re rushing around from place to place, feeling harried, worried about what you may have forgotten to do, and you fall into bed completely exhausted. You’re eating poorly, just to have fuel in your body, snapping at loved ones and co-workers, dreading the next meeting. Your creativity and resourcefulness have vanished and you have trouble getting up in the morning. You wonder how long you can go on like this. Your fire went out a long time ago, and you have no idea how to reignite the flame.

This is the beginning of burnout.

It’s an interesting phenomenon. Burnout rarely happens to procrastinators; it happens to doers. Doers live with a fair amount of stress anyway. Good stress occurs when we get excited about a new challenge. Bad stress occurs when a crisis or trauma takes place. Either way, it has a big impact on the central nervous system. Those of us who are already substantial achievers are the ones at the greatest risk. It takes very little to upset that delicate balance of easily juggling lots of different balls. All too quickly, added demands and pressure can force you into overload.

The Difference Between Burnout and Stress
All of us handle stress on a regular basis. It comes and goes depending on the demands of life. Certain events trigger serious stress: marriages, divorce, moving, changing careers, deaths of loved ones. Today, workplace stress contributes heavily to burnout.

According to the the Center for Disease Control and Prevention, job stress is a major health threat. Forty percent of all workers rate their jobs as very or extremely stressful, and 25% say the #1 one stressor in their lives. This kind of stress leads to illness and heart attacks. According to a new study by the American Psychological Association, 60% of work absences are due to psychological issues such as layoffs, longer work hours, stress and burnout. This accounts for $57 billion of economic loss in lost productivity and health care costs. A report from the National Institute for Occupational Safety and Health revealed that a quarter to a third of all workers have high job stress and are used up at the end of the day. According to the Johns Hopkins School of Public Health, two out of five Americans experience tension headaches. Nearly 50% of all people with graduate degrees suffer from occasional stress headaches.3 Stress is here to stay, and those who accomplish the most face the highest risk.
So what’s the difference between stress and burnout? Stress is usually limited to a finite period of time and is often situation-related. Change the situation and the stress goes away. Burnout, on the other hand, usually follows a period of severe and prolonged stress, resulting in a state of mind in which the individual feels constantly exhausted and depressed. They feel their work efforts are worthless and futile; they don’t feel valued or valuable. They frequently are not sleeping at all, or sleeping way too much. Their personal relationships are falling apart. Burnt-out people have no hope. They don’t want to get up in the morning and are often in danger of severe depression.
You’re probably not anywhere near a state of burnout now. But it is likely that you encounter some stress in your life. To help you prevent future burnout, learn where your stressors lie and how to best prepare for them. Knowledge is power.

Activity # 1
Below is a list of 7 areas. Circle the ones which are creating the greatest pressure for you.
I-Family: obligations to children, childcare dilemmas, spousal conflict, taking care of elderly parents, challenges with siblings, household chores, role conflicts,
II-Work: overload, office politics, communication breakdowns, rush deadlines, interruptions, sexual harassment, employee turnover, employee retention problems, downsizing, expansion, computer or equipment problems, client or customer retention issues
III- Lack of Personal Time: for play, recreation, exercise, hobbies, quiet time, creative space, reading
IV-Money Issues: cash flow, shared responsibilities, debt, budgets, lost accounts, credit cards, multiple bank accounts, savings, college tuition, unexpected expenses
V-Health Issues: personal health, exercise, diet, nutrition, sleep, heart, blood sugar, menopause, headaches, backaches, cancer, injuries, high blood pressure, personal disease, disease in loved ones
VI-Community Obligations: leadership, politics, deadlines, pressure, lack of follow-through from other team members, shortage of volunteers, lack of time, lack of money
VII-Emotional Issues: feeling like a failure, exhaustion, overload, spiritual emptiness, feeling trapped, loneliness, lack of life partner
After you’ve circled your top sources of stress, narrow them down to the three biggest danger areas. Prevent burnouts by knowing what will set you off and making a plan of action if the worst happens in that arena. Being prepared is a key resource for accomplished people. Take the time to brainstorm solutions to possible crises long before they show up. It will pay off handsomely.

The Warning Signs of Burnout
You now know what contributes stress to your life. To ensure you control the stress and are not in danger of burning out, take a look at the two lists below. See which individual you identify with more strongly. Count how many statements are true for you.

Burnt- Out People:
o have no energy
o focus on the negative
o whine and complain frequently
o walk listlessly with their heads down
o don’t take care of themselves
o eat poorly and rarely exercise
o rarely do what they love
o stay stuck in the past
and are resistant to change
o are not fun to be around
o are ineffective at work
o criticize others frequently
o judge themselves especially harshly
o feel unappreciated
o take very little time with their personal
appearance; look disheveled
Fired Up! People:
o have abundant energy
o focus on their wins and on good news
o speak enthusiastically
o walk with a spring in their step
o take care of themselves
o eat well and exercise regularly
o often do what they love
o focus on the present & welcome new ideas
o are great fun to be around
o light up the workplace with their good attitude
o laugh often
o continually work on themselves
o feel good about their work
o always look put together and polished;
radiate a sense of well-being and health
How did you do? Do you have 5 or more symptoms? If so, relax and take a deep breath. Help is on the way. The next several pages will give you practical hands-on tips that really work to reignite your fire and help you shift into a positive, proactive healthy state. Even if you’ve tried them before, approach the ideas with a fresh perspective. You’re in a different place from where you’ve ever been before.

What to Do When You’re Burnt-Out
Spark #1 Take Control of Something Small
Often when we’re very stressed, we feel out of control. Remedy the situation by taking control of something small and manageable. If your desk is totally cluttered and can be tackled in a few hours, do it. If you feel like washing the kitchen floor, go for it. Experience the completion of that activity. Choose an activity that’s quick and easy, so you can feel a sense of satisfaction and can see the fruits of your labor. Completion releases its own special energy, so pick something you know you can get done in a few hours. Then complete it. That will at least get you back into a more positive frame of mind, and let you know that you do get things done, even if you’re not feeling that way now.

Spark# 2 Go On Vacation
The most immediate “quick fix” for burnout is to schedule a vacation as soon as possible and go away for at least a week. Ten days is better if you can manage it. You need to get away from all the stressful pressures around you, and you need to relax in a peaceful setting where your only responsibilities are to rest and take care of yourself. If money is tight, ask a friend if you can stay in their vacation home. If you have to take time off without pay, do so. You are in desperate need of a break. I know this from personal experience.
Two years into my business, thanks to heavy stress in my life, my blood sugar dropped dramatically. I felt faint and dizzy. I went to see my doctor and he diagnosed me as hypoglycemic. He also gave me some very good advice. In my line of work- owning a a high pressure ad agency and professional speaking business, I needed to take a minimum of two full weeks off every year. He said as soon as I got back from one vacation, I should to schedule the next one. Since then, I ‘ve taken that advice to heart. As a sixteen year entrepreneur and author with three businesses, I take four weeks of vacation with my husband every year. It keeps both of us fresh and Fired Up! We love our lives and our work, but we can’t do it 365 days. We know this time off is critical to our effectiveness at work. We always get out of the house, because vacations at home are not vacations. We usually go sailing in the Virgin Islands. Our biggest decisions are where to dine each night and what novel to read next. It’s heaven and it works.
If for some reason, you cannot get away immediately for a vacation, take a couple of days off and take day trips to someplace soothing in nature. Go to the ocean or the mountains; spend some time outdoors, whether you’re hiking, or just sitting quietly by a lake. The key is downtime away from home in a safe place. No hassles, no decisions- just relaxation. Ask a family member to take care of the kids and find a way to do it. It’s extremely important.

Spark #3 Track Your Successes Daily
Get yourself an attractive journal. Then every night, before you go to bed, write down your successes from that day. Each of us accomplishes so much, but when you’re burning out, you may not realize it. The very first success may be “Got out of bed” because you did even, when you didn’t want to. “Got the kids to school” might be number 2, and so on. Give yourself credit for every phone call, every meeting, every report, every e-mail. Burnt-out people feel like they don’t get anything done, and that simply is not true. Try this technique for a month. I guarantee it will boost your self-esteem. And just imagine how you’ll feel if you do it for a whole year. I’ve been doing this off and on for over a decade, and it makes a huge difference in my life. It helps me lighten up and rekindle my fire. It’s even more important to do when I’m terribly busy, because otherwise I can’t keep track of it all.

Spark #4 Just Say No
When your embers are dying, one of the best things you can do is say “no.” That means “no” to anything new, “no” to any additional tasks or responsibilities, “no” to any social events that mean work for you. Get yourself in balance, and cut back on your overtaxed life. Stop doing so many things. Don’t agree to help everyone else. Take care of yourself first. You’re worth nothing to anyone else if you are exhausted and demoralized. You owe it to yourself and to others to say “no” while you recharge. There are huge payoffs when you simplify your life. Try it.

Spark # 5 Ask for Help
You cannot possibly do everything. And during stressful periods, you cannot function at peak performance. Ask for help. Level with the people in your life, at home and at work. Tell them you’re going through a tough time, and you need their support. Delegate more to your co-workers and employees, ask for their advice and input, get some fresh ideas. Don’t try to do everything yourself. Even consider adding short-term staffing, like a temp to do administrative tasks. Ask others to help you and give them permission to do the same when they’re stressed. There’s nothing to be ashamed of by reaching out; we are all human beings, not human “doings.” We all go through tough periods, and we are much more respected when we admit our vulnerability and express our needs. You may be astonished at the support that comes your way. And if you don’t feel comfortable sharing at work, go to a support group or therapist. The key is to unburden and get help.

Spark # 6 Stop Doing and Start Being
This is one of the most challenging mandates for a doer in the throes of burn-out. But it is also one of the most healing. Stop doing and start being. Start honoring yourself as a worthwhile individual regardless of what you accomplish in the world. Go inside yourself and discover who you really are. Consider going to a spa or meditation retreat. Take yoga or Tai-chi. Do something that will help you go inside to discover who you really are in the silence. Most of us are not aware that we are all divine beings, with access to limitless creativity and resources, if only we would ask.
Whatever your source of spiritual inspiration, whether you believe in God, Buddha, Mohammed, Christ or just love, spend some time developing that part of yourself. Pray, meditate, chant, or just be quiet and write what guidance you receive. Many of the world’s great achievers have turned inside to discover deeper meaning and purpose in their lives. The outside world is ephemeral; success and outer accolades are fleeting. But the inside core of who you are is solid and good, whole and complete, all by itself. Few of us truly know this, inside of ourselves. Achievers do so frequently out of a need to have the rest of the world tell them they are OK. Learn to validate yourself from the inside out and discover what an incredible difference it makes in your life.
Many gifts will come from this experience. You’ll no longer be dependent on the praise of others. You’ll be more confident and grounded because you’ll come from a deeper place of wisdom and knowing. Today’s little dilemmas won’t throw you off balance, because you’ll recognize that in the grand scheme of things, very little of today’s nonsense matters. But most of all, you’ll discover an ocean of peace and fulfillment that can renew you each day, if you take the time to go there. It’s up to you; the rewards are infinite.

Spark # 7 Play Like a Child
There’s a reason that young children are so happy most of the time. They play often. They generally laugh over 300 times a day as opposed to most adults who laugh 7 times a day. They live totally in the present moment and are not worried about tomorrow. They continually feed and express their imagination by using all of their senses and experimenting. That’s why play is the perfect antidote to the stress of burnout. Why do you think golf is so popular? People get outdoors in nature, laugh and play.
Spend some time thinking about what you consider fun. You’ll probably discover that you haven’t spent much time having fun lately. Pick three favorite activities and schedule them next week. Now do another one in the next 8 hours. Then go do it. If you don’t have many activities that you consider to be play, it’s time to cultivate some new hobbies. Consider taking a class, trying something new, playing with your children.
My husband and I have developed an eclectic list of interests. We might be working on our dollhouse, riding our tandem bicycle, going sailing or skiing, taking a ballroom dancing class, critiquing the latest movie, shopping, dining out, entertaining friends, or reading the new bestseller. We are continually trying new things and introducing each other to new activities. This keeps us both energized and Fired Up!

Spark # 8 Focus on Good News and Avoid Negative People
Dr. Martin Sullivan of the University of Pennsylvania, discovered that after 20 years of research interviewing 350,000 executives, the top 10% performers think differently from others; they all have the quality of optimism.
It’s also been documented that we have at least 50,000 thoughts a day, and that for most people, 75% - 85% are negative. When you’re in danger of burnout, you need to change your internal programming and focus on positive, powerful thoughts which get you Fired Up! and help you maintain your optimism.
We live in a negative society which focuses on negative news. Every workplace has an “ain’t it awful” club whining about the bad news and stirring up trouble. Avoid this group. Stay away from gossips and naysayers. Avoid negative family members when you’re under stress. You may even need to avoid your parents.
At work, counteract the negativity by sharing good news. Ask your employees and family every few days: what’s the good news? Cultivate optimism and you’ll start yourself back on track. Take a lesson from actor Christopher Reeve, who believes that keeping your negativity to yourself is a way of taking control of your life.

Spark # 9 Spend Time Helping Someone Less Fortunate
In my experience, this is the single most powerful antidote to stress and burnout other than a vacation. No matter how bad your life is, no matter what’s wrong, there is always someone who has it worse. Always. So pick yourself and do something about it. Even something as simple as babysitting the neighboring single mom’s kids so she can go to the grocery store will do wonders for you well-being.
Get out of your self and serve other people. The treasure of service is that it gives you just as much as the people you serve. Find some way to give back. And when you’re feeling sorry for yourself, do a reality check. Do you still have your limbs, your senses? Do you have shelter and food? Is there anyone in your life who loves you? Then you’re better off than lots of people.

Spark # 10 Set Boundaries
People who give a great deal are often unclear about their boundaries. In addition to saying”no” more often, make your boundaries clear with others. It can be as simple as telling others,
” You know, I hate to be criticized,” or “I’m leaving the room before this becomes a fight.” Learning how to prevent escalating friction can dramatically lower stress levels. When one of us knows that we’re in a bad mood at the office, we warn everyone else. That way, others know to tread lightly and bring up touchy subjects at another time.

Spark # 11 Forgiveness
All of us are human and we get hurt. Sometimes people do absolutely awful things to us, and we find it hard to forgive them. A recent Gallup poll on death found that those adults who had not a chance to say goodbye to their loved ones or make peace were experiencing stress. Fifty-six percent of all adults were afraid they wouldn’t be forgiven by God.
My experience is that God forgives everything. And that incredible liberation comes from forgiving someone who has hurt you. The amazing thing is that forgiveness is not for them; it’s for you. As long as some part of your consciousness is tied up in righteousness about how wrong and awful they were, a part of you lives under stress and is not accessible for creativity. You hurt yourself when you hold onto the past. Let it go, forgive, and observe the newfound freedom you experience. You won’t know this until you try it. But it can relieve more stress than a massage.

Spark # 12 Pamper Yourself
When you’re on the verge of burnout, pampering yourself can be the perfect antidote. Take a warm bubble bath with candles and your favorite music. Eat your favorite foods. Get a massage, manicure, or pedicure. Let someone do something for you, for a change. Nurture yourself both on the inside and out. Eat healthy, nutritious foods that make your skin glow. Buy a new outfit that makes you feel like a million bucks (don’t spend a million on it, however!) Do the little things that make you feel special and loved.

Summary
You now know the key causes of your stress, the warning signals for burnout, and how to remedy severe stress if it shows up. You have all the matches, kindling and sparks to ignite your fire and set it ablaze. You are already a doer- someone who accomplishes much in your life. Take the next step and be a healthy doer, one who takes care of yourself, keeps you stress levels low, and stays Fired Up! You have great gifts inside you and the world will be a poorer place if you don’t share them. Ignite your flame and share your gifts with the world. The time is now. The choice is yours. Ignite your fire and stay Fired Up!

By James R. Hagerty

full report.

IHS Global Insight / PNC Financial Services Group

Read the

Home prices in most of the U.S. have fallen back into line with what the typical household can afford to pay in most of the U.S., according to a new study.

The quarterly report – by economists at IHS Global Insight, a research firm, and PNC Financial Services Group Inc., a banking concern based in Pittsburgh – looks at price trends in 330 metropolitan areas across the country. Home prices are “extremely overvalued” in only one of those areas, Atlantic City, N.J. In 2005, 52 metro areas were in that category. (See full report.)

For the fourth quarter of 2008, covered by the new report, home prices are dubbed “fairly” valued in 202 of the 330 markets studied. That means the average price level is within a band 14% above or below the historical norm. Twenty-one markets are ranked as “overvalued,” or between 14% and 34% above the norm. And 106 markets are considered “undervalued,” or more than 14% below the norm.

The report is based on home prices in relation to household income and other variables, including population density (an indication of how much land is available) and past differences in prices caused by factors such as climate and schools.

The report shouldn’t be read as signaling that the housing slump is over, cautions Jeannine Cataldi, a senior economist at IHS Global Insight in Philadelphia. She says house prices appear likely to bottom out late this year or early in 2010 in much of the country. After bottoming, the market may be “stagnant” for a while. It isn’t yet clear to what extent rising unemployment will weigh on the market. For now, many people are hesitant to buy because they don’t know whether they will remain employed, Ms. Cataldi said. Nor is it clear how many more foreclosed homes lenders will end up dumping on the market.

Adapted from Tim and Julie Harris

Here is the news report:

The U.S. Treasury has announced a new effort to crack down on criminals who prey on people seeking help with their mortgage problems.

On Monday, Treasury Secretary Timothy Geithner reported that government agencies had recently identified dozens of suspicious companies that were running suspicious ads about mortgage foreclosure rescue services.

According to Geithner, the Treasury’s Financial Crimes Enforcement Network has already produced a number of recent leads that are helping law enforcement agencies stop foreclosure scams or further investigate suspicious companies.

Geithner also noted that the Obama administration’s Making Home Affordable program is an important part of its economic stimulus effort, which makes foreclosure fraud an even higher law enforcement priority.

“American homeowners desperately need the relief this program offers, but the very last thing they need is to be taken advantage of as they try to hold on to their homes,” said Geithner.

A report by ABC News said that the FBI is currently investigating about 2,100 mortgage fraud cases, a 400-percent increase from 2004.

The scams typically target homeowners with damaged credit scores who are willing to pay upfront fees to people who claim they can resolve their mortgage problems. Unfortunately, many of these people end up with worse consumer credit in the long run.

The $6,000 Utah home buyer grant program has already approved 300 grants.  According to the Utah housing Corporations website, (the agency that is administering this program,)  as of  13, April 2009, only 1,366 grants remained.  Best USA Realty and Best Mortgage Corp. can assist you in claiming your $6,000 grant to buy your new home.  Scott-801-361-4860 or Mava-801-423-7975.

Best USA Realty and Best Mortgage Corp can assist you in applying for the $6,000 State of Utah home buyer grant.

http://b2b.utahhousingcorp.org/HomeRun.htm

Sometimes we need a  little something to make us laugh.

http://images2.jokaroo.net/videos/grandpajapan.wmv

Click on the link below to watch a KSL video clip on Utah's recovery from the recession.

http://www.ksl.com/index.php?nid=148&sid=5883796

SALT LAKE CITY -- A new study shows Utah may be poised to recover from the recession more quickly than most states. The reason, according to the conservative authors, is Utah's business-friendly environment.

This is a conservative study with a lot of praise for Utah's conservative Legislature and its policies, but the forecast is a pragmatic look at what businesses want and what Utah has.

Poised to attract more high-tech companies, more in research and medicine, in recreation, tourism and energy; Utah may have what it takes to climb out of the recession first.

"We do have a very attractive environment for business, and it's been stable," said Sen. Wayne Niederhauser, R-Sandy.

Niederhauser is one of the legislators cited in the study "Rich States, Poor States." Written on behalf of the conservative American Legislative Exchange Council, or ALEC, it claims Utah is one of the states that has advantages over other states.

One of the advantages comes in the area of tax policy, specifically income tax reform. Utah also has less government regulation and involvement is a plus for businesses.

Gov. Jon Huntsman is also working to promote Utah as a future renewable energy hub. Together, it could add up to an even more prosperous future for Utah.

"There probably is not another state in America right now with better practices, in terms of attracting, building and promulgating renewable energy," Huntsman said.

At the same time, Utah has a chance to lead the way in using prosperity to create a better life for people. It can do so in many ways. One example is in being smart about health care reform.

"We're saying it's great the state is embarking on health system reform. Let's make sure that, at the end of the day, those reforms result in predictable costs for businesses and affordable costs for employees so they can succeed on the job," said Judi Hilman, with the Utah Health Policy Project.

By comparison, states like California and New York have been raising taxes steadily. That has led to a very difficult downward spiral for those states.

E-mail: rpiatt@ksl.com

Reprint from the January issue of the Wasatch Front Focus.

Current slowdown in Utah's home building industry quickly becoming the worst in the state's history.

The current slowdown in Utah's home building industry is quickly becoming the worst in history, though the decline is consistent with the experience of surrounding western states, according to Utah's Economy,  a report written by Jim Wood of the Bureau of Economic Development and Research at the University of Utah for Salt Lake City based commercial real estate brokerage Commerce CRG.

Permits for new residential construction peaked in 2005 at 28,285 units and fell to a  projected 11,000 units in 2008.  But, despite the severity of that 61 percent decline, Utah remains in the middle of the pack when compared to construction contractions in neighboring states.  Arizona, ranked the highest among western states with a 67.4 percent decline in building permits issued between 2005 and 2008.  California followed close behind with a 67.1 percent decrease, while Nevada suffered a 64.7 percent decline in issued permits.  Washington was the only western state to report less than a 50 percent decline from 2005 to 2008, with housing permits in that state going down 39.2 percent for the time period.

Utah's high-growth cities, including St. George, Lehi and Eagle Mountain, have been particularly hard-hit by decreases in construction, as the preceding boom drove up development in those areas to unsustainable levels.  Both buyers and builders pulled back unexpectedly in Sept. 2007, and building permits in booming areas suddenly went bust, according to the report.  In Eagle Mountain, building permits have fallen by 86 percent in the past year.  Permits are down by 83 percent in Herriman, 79 percent in West Jordan and Draper, 77 percent in Riverton and 67 percent in both St. George and Lehi.

According to the report, previous construction contractions offer some idea of the likely parameters of the current slowdown.  Since 1975, Utah has experienced four sharp downturns in residential construction.  Downturns generally last four to five years until the trough or bottom is established.  Residential construction contractions have never lasted more than five years, and the decline in permits statewide has never exceeded 70 percent.  The worst downturn occurred between 1985 and 1989, when building permit activity fell from a peak of 18,823 units to 5,632 units.

In the best case scenario, the report states, the current statewide contraction will last through 2009, for a total of four years, and a decline in residential units of 63 percent, from a high of 28,852 to a trough of 10,500 permits issued.  In the worst case scenario, the decline will last into 2010, for a total of five years, with a 70 percent decline in residential units, from 28,252 to 8,500.

Currently, the slowdown is in its third year, and has registered a decline in building permit activity of 61 percent, which doesn't provide any evidence that a turnaround should be expected in 2009, especially, when current market conditions are taken into account.  The conditions of credit markets virtually ensure that this contraction will run through a fourth year.  There is also a precedent for a five year contraction, as two of the previous three construction contractions in Utah have lasted five years.

High interest rates were chiefly responsible for the decline in housing demand from the period between 1978 and 1982, and again from 1985 to 1989.  Double-digit mortgage rates were the result of the Federal Reserves efforts to eliminate inflation in the 1980's.  Mortgage rates in 1982 averaged 16.6 percent.

Interest rates are not an issue in today's contraction.  Rates between 6 and 6.5 percent should be encouraging demand, but demand has fallen instead due to a lack of available capital, which overpowers the low interest rates.

In one piece of good news, while construction jobs have fallen as much as 30 percent in past contractions, the current loss of construction jobs in the state has only reached 15 percent, going from 103,450 to 88,000.  By 2009, the number of construction jobs is forecast to reach a 21 percent decline, down to 81,500.  If the contraction continues into 2010, a worst case scenario, the loss of jobs could reach the 30 percent level, pushing construction jobs down to 72,500 in 2010.

The likelihood of the current contraction carrying over into 2010 is high, with credit market turmoil predicted to last through 2009 and the U.S. and global economies appearing to be on the brink of serious recession.  Recession is bound to erode housing demand even further by reducing migration rates, jobs and income growth and household wealth, all of which could prolong Utah's own housing contraction, the report concludes.