text:
Foreclosure future grim for Utahns
I see what I seeApril 30, 2008 10:41 a.m.
I too am holding out. I sold a home about 3 months ago and took a little bit of a loss (moved). I have refused to buy in spite of others around me telling me things aren't bad. If you believe things are good you should walk around any neighborhood built in the last two years. Most homes sit vacant and prices are still untouchable. I make > 100k a year and feel just fine renting until I see stability and have 150k in cash. Smart money right now is saying stay out of the market. Anyone who sold in the last 6 months and thought maybe they conceeded too much are now sitting back laughing at what someone actually paid. Not that it is worth anything, but I see a minimum 25-30% correction from todays prices. I see a return to prices 5 years prior if not lower. Typically, the downturn is felt greater than the upturn. Good luck to those sitting on your over inflated listing.
RE: Holding OutApril 20, 2008 7:10 p.m.
You are 100% correct. Anyone who disagrees with you must be a Realtor or Real clueless to what is going on. Utah appreciated 40% over the last 3 years for no reason except for greedy Realtors, Appraisors, Lenders, and Investors. I have owned 3 houses in Utah, and moved out of state during the boom. I came back and have been renting for the last 15 months waiting for this to happen, and here it goes. I was hoping for 25% declines, but now with the lending crisis, it will be at least 40%. To all the clueless poeple out there, if it can go up 40% in 3 years, it can go down 40% in 3 years, and it will. Anyone who buys a home or listens to a Realtor or Politician in the next year will upside down in a hurry. Myself and Holding Out will be laughing as we sign out closing papers in a year or two.
Bail Out?April 20, 2008 4:02 p.m.
I am in a job that has me driving through neighborhoods daily. I've noticed that low to moderately priced neighborhoods dont have near the numbers of for sale signs as the McCastle neighborhoods. How much of this 4-5% that is in trouble is people who "needed" a McCastle and used a subprime loan to get it? If my, admittedly unscientific, observations are correct, I dont want my tax dollars used to bail out $500k+ homebuyers. They can lose their home and rent or buy something more modest like the responsible homeowners. Has anyone seen anything that says which end of the housing scale has the bulk of the problem?
Wheat & CornApril 20, 2008 12:46 a.m.
I agree with the wheat poster. Grain prices are going up, up and up. I never want to be hungry. I can live without big houses and toys, but I can't live without food. Haven't we been warned to get out of debt and store food? Why are people so silly?
RE Re Buyers MarketApril 19, 2008 6:03 p.m.
The reason that people should not and will no "pony up" and pay the high Real Estate prices is that lenders have gotten in trouble and are no longer allowed to give people loans who don't truly qualify. So therefore, buyers cannot qualify for these high of loans let alone actually try to afford them.
socalmonApril 19, 2008 1:39 p.m.
The lobbyists of the mortgage brokerage industry have gotten their way with the Bush administration, as well as, (of course), the big oil people. Therefore, the economy will continue to tailspin, because of this scenario.
Oh yes, once in awhile there will be days when Wall Street will spike upward, and the stock brokers will be doing their cheerleading on T.V., on those days. But the overall effect will be downward for many, many months. I am counting the days when George W. is finally gone. I took my 401K money out of the stock market at the end of last year and will not be riding down that slope. I plunked it into a stable income account, so that I can at least sleep at night. Utah people need to take a second look at which party is truly for your children and great-grandchildren. The Republican Party left me. I think it needs an overhaul.
GusApril 18, 2008 7:18 p.m.
I don't understand why the feds feel they have to bail out anyone, homeowner or large brokerage firm. Just make people take responsibility for their actions whether it's lenders, homeowners, mortgage brokers, hedge funds, or brokerage houses.
Let them all suffer a little and let folks sell their houses at market prices. This would correct the economy much faster than all this superficial propping up of the economy.
Hard Numbers Guys NumbingApril 18, 2008 7:07 p.m.
You "Hard Numbers Guys" are tiring. You are like the guys on CNBC that have been debating for months whether we are in a recession. You miss the forest for the trees. Housing has stalled and is tanking hard in Utah. People are paying higher costs for all their basic needs. Jobs are being lost. Be so good as to do a report for me so I can sell my house for more than anyone is willing to pay and so I can get the grocer to lower the price of groceries.
Now you can argue whether it's tomAto or tomOto.
Have at it!
Re: Re: Hard numbersApril 18, 2008 5:06 p.m.
Actually, the data goes the other way - statewide (Utah) incomes and Salt Lake / Wasatch Front prices. So the double-wide guy's pulling down the income number but not the house price number. And that's a 4th quarter 2007 number for home prices, but only a 2006 income number. If you have a Wasatch Front only number for income, I'd be interested in what that is but I'm guessing it's higher than the state average.
According to the NAR report, median home prices have already dropped about 7.5% from where they were at the peak here ($247K to $229K). And I believe the average income increase was about 7.5% last year. So even if you accept Kelly Matthews nice round 20% number, about 15% of that 20% gap has already been closed between price reduction and income increase.
One other thing that these numbers don't account for is the changing mix between single family homes and condos. The median price of a condo is much lower and more and more first time buyers get condos because they're generally more affordable.
let's make a dealApril 18, 2008 2:11 p.m.
whacha got for sale?
Re: Hard NumbersApril 18, 2008 2:10 p.m.
That was some fancy footwork. You can't use Wasatch Front incomes and then drive down the median home price by using the whole state. That double wide trailer in Green River doesn't count.
Kelly Matthews, Wells Fargo's well respected economist and Utah housing expert, published a report about 6 months ago that said basically Wasatch Front home prices have to drop by 20% or incomes have to increase substantially for the market to begin to make sense. Take a guess which one is happening.
Hey "to re buyers market"April 18, 2008 1:44 p.m.
I like your attitude. I've got some things I would like to sell you.
to re buyers marketApril 18, 2008 12:02 p.m.
Wouldn't the reverse be true as well? Why don't you just pony up the cash that the seller is asking and the market will speed up because you will be buying.
Maybe you need to eat some humble pie and quit whining about the prices and pay up....
I do believe the knife cuts both ways....
and no, my house is not on the market..
Re:Buyers MarketApril 18, 2008 11:34 a.m.
Amen to the earlier comment on the buyers market. Sellers need to humble themselves and realize that the market wouldn't be so slow if they would actually lower their prices. And no, I'm not talking 5 or 6k reductions. I mean lowering your prices to what your home is really worth in today's market. If it's not selling, then you are overpriced. The Market will speed up if Sellers learn humility.
Re: MahonriApril 18, 2008 10:03 a.m.
Cheers to YOU! you hit it right on!
NO Sympathy,you signed the dotted line-now pay for it. People need to live within their means and stop waiting for neighbors to bail them out. They should be embarrassed for their stupidity. I like the bumper sticker that says~"Don't think my car is good enough-well my house is paid off"
Aless FergussonApril 18, 2008 9:56 a.m.
My sister tried a short sale of her property through HOMEQ and it is horrible how the people in that place do not take that work seriously.
Every one of them ask for the documents she already submitted, a new person on the phone ask her for the same papers, and not one of them seems to take responsability of what they represent.
HOMEQ is the worst, it is a headless institution. My sister has a buyer for her home, but HOMEQ rather sent her a notice of foreclosure, without taking into consideration all the paper work submitted!
Our economy is into DEPRESION and the government does not seems to realize that. People losing their homes by the hundreds is an indicator. What to do?
just PRAY!
GusApril 18, 2008 9:47 a.m.
Lots of builders were putting their profits into more land and probably buying themselves a big nice home too. But, I'm not asking for a bailout at all. Actually, the opposite. I'd like government to keep their hands off. I'd like them to stop lowering rates because the banks are just sitting on that cheap money. Stop bailing out the big brokerages because they should take responsibility for their actions. Stop creating special lending institutions. I firmly believe that letting this thing correct on it's the best option for our economy and for Americans. Yes, some will lose their homes, but whoever said that homeownership is risk free. Let them rent for a while and regain their financial footing. Then re-enter the market at market prices.
MahonriApril 18, 2008 9:08 a.m.
Absolutely NO SYMPATHY for these people too stupid to understand what they are signing. They buy the big mansion homes knowing they can't pay for them and now expect the government and neighbors to pay for their stupidity. I have a refrigerator box I will SELL to them as I point them to a freeway underpass to live under.
Stop buying ice cream and pay your bills. They are deadbeats and welfare types and expect the rest of us to take care of them. Let them lose their homes.
hOPEFULApril 18, 2008 8:51 a.m.
WassupApril 18, 2008 8:44 a.m.
Gus, what were the builders doing with their profits during the past 3 years (and those profits were huge on a house). Now they complain they are in financial trouble?
Did they really believe this fantasy would continue indefinitely?
Sounds like bad business practices by builders! No bailout!
Greg wApril 18, 2008 8:29 a.m.
Simple financial advice: if you can't afford it, don't buy it. Plus, your home is not an ATM.
It's not rocket science!
Wisconsin ConservativeApril 18, 2008 8:28 a.m.
"Homeownership is the primary vehicle through which American families build financial security."
No, living below your means is. This is no one's fault but the people who took out loans that they couldn't afford. I am SO mad that the government is getting involved. I am sick of the entitlement mentality that is ruining this country. And no I don't want to pay for every one's health care either.
Hard NumbersApril 18, 2008 8:06 a.m.
Utah's prices are a little high compared to incomes, but not outrageously high. According to the Census Bureau, Utah's median household income is $55K and according to the NAR home price index, Utah's median home price is $229K. So at current 30 year fixed interest rates around 6% and a 10% down payment, the monthly payment (including principal, interest, mortgage interest, insurance, and taxes) is about 32% of income. Or an FHA loan with 3% down, about 34% of income....slightly above recommended levels of no more than 30% of income, but not so bad that home prices will drop 50%.
Of course, doom and gloom reports can be a self-fulfilling prophecy leading to actual doom and gloom. But this will simply create opportunities for those who are prepared to act.
(and no, I'm not a realtor, just someone who can actually do math unlike most reporters and likes to analyze and question media reports that make wild claims)
Re: Re: Real WealthApril 18, 2008 7:29 a.m.
It reminds me of the grasshopper and the ant story. I think people just think they will never use their storage, the Church has begged, even commanded us to have it. We are taught that the first law of heaven is obedience, I am afraid we are not measuring up. When you talk about food storage it reminds me of the 10 virgins, how 5 were foolish and 5 were wise. I also picture the 5 foolish running around begging to borrow oil. When Noah
closed up the ship, he did not open it back up to
let the unprepared in. I think we need to get back to basics and not spend out of our means because we
want to look successful to others. I think going over your head and spending money is an addiction, and a plague and we should run from it. We are setting our children up for expectations in life that are unreasonable unless they carry alot of debt. It's time for us to change and be better stewards over our money that we are responsible for.
I think we can learn alot from our Depression Era parents, that ran from big houses.
Re: Real WealthApril 18, 2008 6:06 a.m.
Yes my family and I have also 5 times our money on wheat, and next it will be rice. I have been working diligently for 5 years on my storage trying to store up needs for my family. I know my family will appreciate something to eat in hard times. I have also heard that Cash and novilty toys don't cook or taste very well when cooked up!
No One Brags About ForeclosureApril 18, 2008 1:22 a.m.
Have you gone and asked each of your 25 neighbors if they are in foreclosure? No sign goes on the lawn for foreclosure, so how would you know?
You Must Be KiddingApril 18, 2008 12:39 a.m.
"without Realtors the housing economy would fall apart"
You absolutely MUST BE KIDDING. Get rid of the laws that protect realtors turf and control the MLS.
Then we can talk about how necessary realtors are.
That's great that you are "honest". You are also in a profession that needs major restructuring but that has a strangle hold on legislators in order to prevent that change and protect your profession's profits.
rosemarieApril 18, 2008 12:25 a.m.
I would like to know exactly where he got this informaation--there are alot more than 25 houses in my area and none of them are going into foreclosure
Too bad things are not checked for accuracy before they are published
GusApril 18, 2008 12:27 a.m.
I am a home builder and built about 15 homes/year for the last 10 years. This year, I've only sold 1 so far for a tiny profit of $5,000. I could see this bust coming and prepared for it, though, and don't have any other construction loans right now. But I have friends who build and they have 5-10 construction loans out right now. To put it kindly, they are getting eaten alive with interest payments. Many are paying $20,000/month just in interest. Say what you will about the general Utah economy, but for me and my kind, we are in a recession. Housing is in a recession, no doubt about it.
Realtors being attacked, sad...April 18, 2008 12:10 a.m.
I hate to rain on everyone's parade, but without Realtors the housing economy would fall apart. There are many bad realtors but there are also many bad mechanics, insurance salesman, teachers, custodians, etc. Every field of work has it's corrupt people and it's completely honest people. It makes me sick when everyone titles Realtors as blood sucking liars. Being a realtor is my career and hearing ignorant people label me with the rest makes me feel like my honesty and integrity don't matter one bit.
Don't Suck Up the $130April 17, 2008 11:51 p.m.
TO: The renter in Murray that got a $130 rent increase,
Are you under any kind of contract? It's a pain to move but you should tell your landlord that you will be moving. Instead of an extra $130 they will be looking at a big hassle, turover costs, and maybe several months of NO RENT.
I mean the turnover of the property will cost them a lot. Use good judgement since I don't know all the factors here. They are taking you for granted.
If they blink, then do a lease at a compromise rate. and lock it in at a fixed price for a year or more.
Or just move. These "landlords" really irritate me.
Former Property Manager
Buyers MarketApril 17, 2008 10:08 p.m.
What we need to understand is that this is a buyers market. The list prices on the homes for sale are a list price not a sales price. Far too often, buyers are offering only 5K or so lower than list price and think they are getting a deal. No! Unless you are offering at least 10% less than list price, you are not helping yourself, or the market correction that needs to take place. Also note to sellers: You need to humble yourselves and realize that your home is not worth as much as your Realtor says it is. Not selling fast? Then lower your Price! This is the main principle of Economics!
Dear Holding Out...April 17, 2008 9:11 p.m.
We have been renting for some time in Murray, but our GREEDY Land Lord has just Hiked up our rent $130! I can see $25 every 6 months, but $130? We have lived here for 4 years, mow their grass and snow blow their walk to be Kind if you can believe that and they hiked our rent $130. I asked why and she said, "Tax Hikes" and "Insurance" and other costs, I think it is called "Lining Your Pockets!" We have found a couple of homes under $155,000. I had hoped to hold out, but I am thinking a few things, although if we held out we would be "throwing our Money away" in rent, instead of building equity. We are not "Starter House" people either, we want a home to grow into, and grow out of past retirement for the family, like they did in the OLD'n Days, when people had brains and used them! We have 1 adorable little girl, one on the way and hoping to polish our family off with 2 more and we make about $50,000 total per year. Live Frugal, Be Happy, Multiply and have Joy In Your Posterity!
Caveat EmptorApril 17, 2008 7:53 p.m.
Congratulations to all the folks who read this article, and offered their opinion(s). This subject is deadly serious, and warns us of some significant challenges ahead. I am fortunate to have "sat out" this market, and rented, while prices were well out of proportion to an equivalent rental property. My prior experience here in Utah (1981-1989) led me to believe that, on average, many folks had a tendency to overextend themselves, financially. Upon my return in 2005 the behavior seems to have become the "norm", and well here we are......Utah is not different from the rest of the U.S., just slow to catch on.........
Don't blame meApril 17, 2008 7:45 p.m.
I didn't vote for any Republican.
Never will.
Remember the NameApril 17, 2008 7:33 p.m.
Bush, as another Bush took a whole bunch of Utahns down the wrong path with the saving and loans scandal. He walked off scot free, but alot of old people right here in this state lost their whole retirements in one day! Think before you leap!
Deseret roots in WisconsinApril 17, 2008 6:59 p.m.
Maybe after a 25% - 30% value decline property values will be in line with salaries in Utah. Too many Californians moved in and paid way too much for their mini mansions. If not for such a price correction the only place a person could almost afford to live would be in the Midwest ... and that aint too pretty folks.
JohnsonApril 17, 2008 6:52 p.m.
People, beware: This housing crises is going to throw Utah into the toughest economic test since the 1920's. Why, because the market decline has absolutely no fix. Interest rates cannot get any lower, many jobs are going to be lost (especially service industry), business owners will have absolutely no money to borrow to bridge business cycles...it's going to be horrendous! This is no joke. If it wasn't for the LDS church's $1.5 to $2.0 billion development, SLC would be at a stage two recession.
Batten Down the HatchesApril 17, 2008 6:41 p.m.
I have been watching Utah real estate for over four years. About when I was going to buy, the bubble came to Utah.
The MLS used to have around 9 or 10,000 listings. Now, it's close to 22,000 and that doesn't even include all the FSBOs. Craigslist is full of anxious sellers.
This is going to get a lot worse. The economy is worsening and housing and the rest of the economy are feeding off each other in a downward spiral.
Re: Holding out too!April 17, 2008 6:30 p.m.
It sounds like you have a second income that you and your husband are not willing to commit to a mortgage payment. In my opinion...OUTSTANDING money management and well stated post! Good luck with your house hunting when the time is right -- be patient!
AnonymousApril 17, 2008 5:48 p.m.
The downturn has been coming for some time.
The Great Depression took several decades to get into full swing.
What people forget is how many millionaires were made during that time.
Talk about the worker bees and the beekeepers.
The fact is the unholy alliance between the corporate and governmental behemoths don't give a (blank) about you and me and are getting richer by the moment in a situation that they manipulated.
It's all about buying power.
How much buying power do YOU have?
people , peopleApril 17, 2008 5:26 p.m.
you should have done what i did...i took a look at how the candy bars are getting smaller...it corresponds directly to how much buck your money can buy, house wise. now if the candy bar gets smaller so will the house one can afford. But I see there are alot of you out there who prefer suckers.Which also corresponds to those who basically just rented their house pretending to buy it.
4:47 forgot one thing:April 17, 2008 5:19 p.m.
Did not see ARM reset coming
Or so they say. Remember they were tricked. They get the most home they can possibly squeeze into their cashflow math table. I'm sorry but it's so irritating to hear them whine for the teaser-freezer. Basically they are asking for their 3% interest rate to belong to them forever as a reward for being subprime.
Don't property taxes go to fund public schools? How come we didn't see the school funding go up 100% like your taxes did??? Surely when property taxes go down, funding for schools will too.
AnonymousApril 17, 2008 4:47 p.m.
Do you want some humor. My taxes on my house went up over 100% in the last two years. I have a home built in the 1950's and it remained stable for 10 years without moving and then presto, 100% in two years. Well, this is great because now that home prices are dropping I am soooo sure that I will be seeing my taxes go down.
Heres the problem. Person buys a home and get's the biggest one they can afford. Run the numbers and everything works out. Person feels like everything is okay.
Did not see gas prices rising 100%
Did not see taxes Rising
Did not see groceries skyrocket
Problem. everything you buy is usually transported by train, plain, or truck. They all use fuel. Want to know whats really scary. Wait until diesel hits 4.50 or 5.00.
Get Yourself a BoatApril 17, 2008 4:47 p.m.
I have been watching this train wreck coming in Utah for quite some time. It was like watching a friend destroy themselves with drug addiction. If I said anything the debt/status addicts would get mad.
They said that I was a goom and doomer, pessimistic, and that if the media would shut up, that things would be fine.
I am not hearing many deniers anymore. For those who want continue their trip down the River De Nile, shortly there will be good deals on boats that strapped HomeMoaners can't afford anymore.
AnonymousApril 17, 2008 4:45 p.m.
Get real is no doubt a realtor.
Any time is always the best time to buy real estate. :>
To: Get RealApril 17, 2008 4:44 p.m.
The media is as bogus now as it was when it contributed to the hype a few years ago, telling everyone there was no end in sight for home prices and that we'd all be homeless if we didn't hurry and get into a home at whatever cost.
Also? Uh, I'm not poor. How do you know all the naysayers' net worth doesn't quadruple your own? You don't. Most people who still rave that real estate is such a great invesment are very likely invested in it themselves and are interested in keeping the hype going for their own benefit. Yes, real estate can be a very good investment because it's an instrument that you can also live in an over long periods of time it does increase about a percentage over inflation.
People on here saying these things don't need to shut up just because YOU don't personally benefit from their thoughts. People who haven't been buying lately DO have control over their lives. They are paying attention and they're doing what is most financially prudent for THEM which is not to buy in or right after a boom. Sounds like control to me.
AnonApril 17, 2008 4:35 p.m.
To the guy who said SLC won't crash as hard because we only saw modest appreciation during the boom: Since when is 22% YOY several years in a row MODEST? Unless all our paychecks did, it's not sustainable.
Oh, and to say that prices will go back up because inflation will drive it? I think it's the other way around. The more stuff costs, the more cash-strapped we become. This only limits our homebuying budget.
Please quit trying to "warn" those waiting that the bottom might come and go before we know it. We're the ones paying the most attention. We'll buy when it's fair, period.
My favorite comment here: "I enjoy homeownership while you enjoy rental receipts." Umm...unless you have some serious equity in your home, we're all renters. You just rent from the bank while they graciously let you put a couple hundred toward your principal every month. I probably pay less in rent than you pay in interest AFTER your tax deduction...for just as nice of a place.
I love the show "Arrested Development." The model home they live in perfectly represents the quality of today's new construction and the incarcerated father perfectly represents the builders.
Get RealApril 17, 2008 4:23 p.m.
This article is bogus. Media is bogus.
Real Estate is still a great investment.
Be optimistic. All of you naysayers on this board are poor.
The rich are rich because they don't listen to people like you.
Shut up and take control of your life! Don't let it control you.
AnonymousApril 17, 2008 4:13 p.m.
Poor article, weak comments -
Uh-Oh! You will be hearing from our resident neocon - Thomas, about that. :>
Holding out too!April 17, 2008 3:59 p.m.
I know it irritates some people to read about anyone holding out. Us holder-outers represent a resistance that is keeping a lot of overpriced homes from selling. Or maybe it bugs some people because it sounds like we take pleasure in watching others lose their homes. I personally don't enjoy seeing that. The only reason I think the market needs to decline is because prices are unfairly high. Just like I want others to be able to stay in their homes...I, too, would like a place to live. Others hastily bought while my husband and I came to the painful realization that we couldn't afford even a modest starter home unless we depended on both incomes, which we felt was risky. If WE could figure out that there's something wrong with that picture, why couldn't anyone else? We sure got criticism for it. It's not about wanting others to fail. It's about having hope for the same chance others got five or more years ago...the chance to afford a decent home on a 65k income - something with a yard for $170,000 NOT 5 feet from the airport. I'll happily live there...but ~$170k is too much to ask.
Re:Poor article, weak commentsApril 17, 2008 3:18 p.m.
Welcome aboard!
JimmyApril 17, 2008 2:54 p.m.
I don't think the rate of foreclosure will be quite as high as predicted in the article but without question it will be higher than a lot of the disbelievers think. It seems like almost everywhere in the US people thought it was wise to use their homes as ATM machines without thinking about what they could really afford to pay later. Others bought homes with highly inflated prices thanks to a few dozen bad apples in the mortgage and real estate business along with a few hundred speculators who were overly greedy. Do I think Joe Neighbor should lose his house, not really. Do I think the speculators should lose everything they have, absolutely.
SueaRealtor (r)April 17, 2008 2:44 p.m.
Why doesn't anybody blame the realtors? Sure, it was not their fault, they were just saying what buyers wanted to hear - that prices always go up. At the very least they were doing a lousy job. The biggest lie ever propagated was that realtors are impartial and we need two, one to represent the seller, one for the buyer (who then split the proceeds, tehehe). I certainly couldn't be objective if my paycheck depended more on what I don't do than on what I do. Anybody who bought at the peak: for goodness sake, sue your realtor. They had (and still have) a license to print money.
Poor article, weak commentsApril 17, 2008 2:38 p.m.
Haughtiness and lack of accountability. That's what I read here. There seem to be a lot of supposed professionals on here with nothing better to do.
Re: Re: Spend @ 1:00pmApril 17, 2008 2:36 p.m.
You boldly state: Please, don't save your IRS/Government stimulus check, brought to you by your loving "Parents", the Democratic Congress!
Ahem! GET YOUR FACTS STRAIGHT!
Though the so called 'Democratic Congress!' voted for the stimulus check (which also had a huge Republican contingency vote for it also (considering that the Dems only hold a 'simple' majority in congress)), IT WAS BUSH WHO ORIGINATED THIS STUPID POLICY!
You seem to forget that one of the largest conservative think tanks and a conservative economist have both said that President has singly handedly done more to bring back "Big Brother" government, not seen since FDR, and worse yet, he has put this nation into the sliding recession its in, and Bush is the first president to EVER go to war with no means in place to pay for it but instead in-debt the nation to foreign nations (China, the Saudi's, etc.), and have two back-to-back years of multi-trillion dollar budgets, record deficits, and a ruinous legacy of rewarding the rich, privileged and scab profit takers, while making war on Middle Class America.
Bush (and the backseat president Chenney) have brought 'Big Brother' Big Government back in a way ultra-Liberals could only dream of.
AnonymousApril 17, 2008 2:26 p.m.
Spend 1:45 forgot to add:
"...and don't forget to spend your tax rebate on the wonderful war Bush and Cheney got us into.
Just send it back.
Uncle Sam Needs YOU!
And your money!
Otherwise you are a bad American!
Re: Full PerspectiveApril 17, 2008 1:50 p.m.
This post provides the most insight into the cause of the mess-GREED. It's not one person's fault, as much as we like to point the finger-a lot of different parties were involved. Banks, investors, underwriters, real estate agents, borrowers, have all contributed.
You can point blame at the borrower, yes they should have become more educated before jumping into an unrealistic financial situation-however. However, many borrowers trust financial intermediaries to provide them with realistic loans and rates, not loaning them amounts they know full well the borrower will not be able to repay (they do this because in most cases banks make their money off the loan transaction, and then sell the loan on the subprime market). It was in their best interest to push ridiculous loans because everybody makes money-the bank, the investors, the real estate agent who receives typically 6% fee off the loan value.
All of these people receive money from the transaction, they promote flipping, inflated home prices, in attempt to sucker the borrower into thinking they would get rich out of taking out a bigger loan than they could afford. In short, everyone is to blame.
VApril 17, 2008 1:52 p.m.
I think this picture is much bigger than we're talking about. Homeowners are often ill educated and can be persuaded (and are) by lenders that they can afford more than they should believe. Buyers often don't understand cost, interest, appreciation, or risk. Lenders have high incentives for signing loans, and this bubble market had been the latest hot way to increase revenue for lending agencies -- in the short term. Investors count on dividends from the money they are persuaded by lenders (sometimes with faulty evidence) to fund. And investors aren't just those on Wall Street. The little guy's 401K's and Employer retirement funds, etc. bank on these investments paying off. In short, it isn't just naive buyers, greedy banks, or cut-throat investors who will be hit with this. Everyone suffers when a market bubble bursts. For most of history, real estate has been the bedrock of our economy, the safe bet investment. That's why it's the American Dream. This has been taken for granted, and why so many don't seem to take this crisis seriously. So, it's everyone's and no one's fault, and everyone will pay when the housing bubble fully bursts.
Re: Spend @ 1:00pmApril 17, 2008 1:45 p.m.
You forgot to add:
Please, don't save your IRS/Government stimulus check, brought to you by your loving "Parents", the Democratic Congress!
the way it isApril 17, 2008 1:44 p.m.
Every country has its turn on the top of the heap.
All eventually fall to another country.
The United States of America is no different.
Live with and appreciate that the best things in life are truly free.
CrisApril 17, 2008 1:45 p.m.
My wife and I have been waiting patiently and renting for four years while other young couples dove head first into large mortgages. They were "living the dream." Looks like our patience and smarts is about to pay off.
It feels so good to be right. To the Utah housing market, "how low can you go, how low can you go?"
RAISE WAGESApril 17, 2008 1:37 p.m.
Raise them or the circle will break.
People with good income don't comlain, then it hits them... then they wonder why.
I am not some poor person screaming because I just couldn't get a good job.
I HAVE a good job and make enough money and I'm in a solid place right now. I recognize the problem today and it is mainly greedy business practices. Businesses want to make more money and don't want to have to pay out.
The news will usually have someone special guest to talk about the "crisis" just as a "set back" but we will move on and the real problem is in this market over here... or over there.... it's only REALLY happening to this crowd.. Just to make the middle class majority feel good to buy more time.
It is simple...nothing need change but businesses focus on working for it's employees as much as they do their customers. That is what will progress society. Anything other than that has always historically killed society and will continue to do so.
Focus on helping everyone or crumble in greed. It's as much a moral issue as a financial problem.
Greed destroys progress. Progress is happyness.
Well then...April 17, 2008 1:21 p.m.
May some day my wife and I WILL be able to afford a home. We were priced out of the market years ago and have been patiently waiting and saving for the return of home prices from their trip to the moon. Our one bedroom apartment is seeming more and more cozy after seven years.
There are plenty of buyers in Utah. Problem is the prices have left them all behind. Equilibrium needs to be re-established. If that means lots of forclosures and price decreases, so be it. In the end, buyers can keep waiting for the prices they want. Builders and those on the verge of losing their homes don't have that luxury.
Recession?April 17, 2008 1:07 p.m.
Everyone here seems to think our economy will rebound as it has many times in the past. You'd better think again! What about our growing annual several-trillion dollar trade deficits that occur every year? What about our insurmountaabe and growing national debt? What about the fact that NAFTA has caused and is continuing to cause the loss of millions of professional jobs, that have gone over to foreign countries (corporate greed)? What about the Free Trade of the Americas (FTA) that our government has been attempting to bring about? What about this on-going war; which we all know, Bush wants to expand into Iran? By the way, we have been borrowing from China to fund this war for the past few years. Against every other currancy, the dollar is plumeting! Oh yeah, and what about the cost of illegal immigration? By the way, the Federal Reserve is unconstitutional and it's title is deceptive! It is made up of private world banks who call all the shots. It is and always has been their design to eliminate the middle-class. I could go on and on. We are on an irreversable course into becoming a third-world nation and into a depression. Unavoidable!
spendApril 17, 2008 1:00 p.m.
Spend. Spend. Spend.
Max out all your credit cards.
Keep the American economy afloat.
Buy every new gadget that comes along.
All this gloom and doom talk is just more liberal lies.
Vote Republican (and don't forget to keep spending)
Full PerspectiveApril 17, 2008 12:50 p.m.
I am an educated investor who understands these financial instruments. If I make bad decisions, I should accept responsibility.
However, there are millions of people who have only a rudimentary understanding of mortgage instruments, let alone basic cost-of-money principles. When you involve two real estate agents, a mortgage broker or bank, an underwriter, and a title company, all who have an extremely high vested interest in the transaction taking place, you end up with normal-every-day buyers (and sellers) executing an unwise transaction due to the input of several parties with a potential conflict of interest. I saw this happen with my first house, decades ago, and learned a valuable lesson. Sometimes, however, these lessons are too costly from which to recover.
It is not only inaccurate, but a little cruelly stupid, to believe the responsibility lies only with the buyer here. There is plenty of responsibility and accountability to go around, but real estate agents, mortgage brokers, banks, underwriters, and title companies need to be held accountable for some of it. These fields drive entire sub-economies here and I don't hear a whole lot of people talking about it. This is not equitable.
re:holding outApril 17, 2008 12:41 p.m.
I am very puzzled and confused. you say u are waiting until houses decline to ~50%? I say good luck waiting. How is it that 2 houses in my neighborhood sold in less than a month for way more than they paid for them? If I could get what they sold their homes for just last week, I will have doubled what i paid 3 years ago. Try to tell me that homes are declining! I, too, make what you do, and I am enjoying home ownership while you are enjoying rental receipts. Whatever homes are priced at does not matter, what matters is everyone needs an affordable roof over their head.
Live prudentlyApril 17, 2008 12:33 p.m.
We have a modest house, with no mortgage. Accelerating the payment of principal can save 10's of thousands of dollars. Pay as you go keeps one in the black. But the government and the FED still manage to steal from everyone by creating huge deficits and inflating the money supply. Let's get back to HONEST money! Get the FED out of creating money out of thin air! Ron Paul is right. Only honest money can get us out of this mess!
Hold on to your knickers:April 17, 2008 12:17 p.m.
KSL hosted an advertiser today offering training on how to make big bucks in Utah on another personss foreclosure[sub-prime lockout]. The training vultures are back and encouraging people to engage in this new white collar crime of equity steeling and flipping properties, amongst other actions that are investigatable and possibly prosecutable. Homeowners have and will go through literal by these sharks and their trainees. Watch out for those we can help you avoid foreclosure stunts, too.
P in CaliforniaApril 17, 2008 12:02 p.m.
The real losers in the housing crisis are those responsible people like me who actually met the qualifications for a home loan without crazy financing and are making their monthly mortgage payment. Here in N. California where the average home costs more than $600,000- It's the idiots who should have never been approved for a mortgage and are now walking away from a home they should never have qualified for and are foreclosing that caused this crisis. Those people along with the lenders who cooked the loan approvals are making the honest homeowner pay the price for this crisis!!!
Simon SaysApril 17, 2008 11:51 a.m.
I have lived in Utah (USA) for 8 months. I am amazed at the huge consumer debt that I see. People are encouraged at every turn to spend money that they do not have. I have received countless offers of credit cards from all sorts of institutions and companies since I have been here. It is SO EASY to get into debt here. I have witnessed a surprising level of materialism among people in certain areas. We rented a condo in a really nice area - new, young ,lots of material possessions. When we bought an older home in an older area in the Valley people were amazed that we would want to move to an older area. I have friends that have 3-5 credit cards - all maxed to the limit. What is wrong with people? We love it here and love the opportunities that we have. In my opinion people have largely got themselves into this mess. You don't need a new sofa every 2 years, so what if you kitchen appliances don't match. We love the old area that we live in now. People are grounded and not trying to keep up with the Joneses.
TO DAVE 12:45 amApril 17, 2008 11:49 a.m.
I seriously hope you are being 100% sarcastic. It's hard to tell when "reading" someone's comment, as opposed to "hearing" a comment.
If you are serious, I feel sorry for you.
Real WealthApril 17, 2008 11:42 a.m.
Re: Wheat/Food Storage
Real Wealth is knowing you can feed your family in uncertain economic times. Yes, I feel real good knowing I don't have to beg my neighbor, church or government for food. Last I checked money does not taste real good and the dollar is going down in value and my wheat is increasing in value.
guymonApril 17, 2008 11:40 a.m.
amazing the ignorance that persists on this topic. The ARM was created as a result of the savings and loan crash - with a hope that they would not get burned lending money out at a lower rate than what they were bringing in. However to say that the mortgage brokers or lending institutions are responsible is childish. The consumer is able to read -- able to comprehend that the rate will increase - but greed trumps logic and the loan is secured. The government bail out is a terrible decision. The FED should have left Bear Stearns to their fate as they did the 190+ other lenders who failed due to greed. Everyone getting foreclosed on should be left to their own devices as well. Short sales should be promoted to prevent foreclosure and mitigate loss for the banks while there is still a sense of inflated values... this is the more feasible option that F/C is but not as readily pursued.
JOE JENKINS SOUTH JORDANApril 17, 2008 11:30 a.m.
magnusApril 17, 2008 11:35 a.m.
I think there is a fine line here...
I am a believer in free market economics, I believe the "American Dream" is founded on free market principles.
That being said, history has shown that the market CANNOT be trusted to regulate or police itself.
I DO NOT support the govornment giving handouts to try and stop a recession or bailing out companies that egaged in poor buisness paractices.
I ABSOLUTELY support govornment regulation of buisness and industry.
For those of you who say "they should have known better". I think that is a very cold way of viewing this situation. Often times the loans that people where being given where being sold to them like a used car, and the mortgage brokers were intentionally deceiving and preying on people they knew could not afford the product they where selling.
If America can avoid the socialist response of free handouts and enact some good legislation regulating the financial industry I think this can be a good thing. It's a good reality check and may help some people to realize that their home equity is not a disposable source of income. Unfortunately, I think that may be asking too much.
America: Land of HopeApril 17, 2008 11:27 a.m.
I hope the bank doesn't foreclose on my house.
I hope I can somehow pay off the crushing burden of my student loans someday.
I hope my job doesn't get shipped overseas.
I hope I don't get stop-lossed again.
I hope the war is over by the time my son is grown.
I hope I don't lose my health insurance.
I hope reckless investment bankers haven't destroyed our entire economy.
I hope I can afford to heat my home next winter.
I hope we can make it through the next seven months of the Bush Administration.
Get it paid for folks...April 17, 2008 11:22 a.m.
Houses are to live in. Homeowners need to pay their mortages off, period. Only then does the house become a home. Only then does the house become a real asset. The present generation seems to have forgotten about that and many will end up having to start over the right way. Pay off your mortgages folks or your retirement will be tough.
Tough LuckApril 17, 2008 11:19 a.m.
That's 1 out of 25 homeowners... who have bought homes extending back over a period of 40 years! That minimalizes the statistic a a ridiculously silly level and doesn't convey the actual gravity of the pending crisis.
Now, take the last 10 years of mortgages done in Utah, with a Lion's share being sub-prime, and not add the mortgages done the prior years and we get a more accurate reading of the situation.
Taking that approach and we can assume that the figure is more like 1 out of 4 or 5 of the last 10 years mortgages being foreclosed on. That's a disaster of huge proportions!
While the borrowers themselves will carry the brunt of the crisis, being blamed for overextending themselves, let's remember that the banks and mortgage lenders also could have said, "Sorry, but the home you're attempting to buy is actually out of your long-term debt-to-income ratio." The banks/mortgage lenders are equally responsible because they turned a traditionally conservative segment of the economy into a highly speculative 'paper wealth' driven market scheme, when it should have stayed a 'collateral' driven endeavor.
Yes! The lending institutions should take a hit/fall as hurtful as the borrowers are taking!
Denver ReaderApril 17, 2008 11:19 a.m.
Greenspan may not be directly responsible, but the huge inflow of money (via reduced rates and increases in the money supply) has led to a cheap dollar (low interest rates) -- Greenspan has some responsibility to this huge fiasco (and more importantly, the horrible position of the dollar worldwide).
People getting into houses they can't afford and lenders not doing due diligence on the borrowers are also culpable in this mess. The markets really need to sort themselves out w/o gov't intervention. The more gov't gets involved, the longer it will take for any correction to run its course. SLC and surrounding areas were slow on the uptick and will be behind on the downside, but I believe it is coming. Denver has already started its slide. The coastal areas are even in worse situation (except San Diego, which has started to see a bottoming in the housing plunge). Not sure how far it will go, but it will fall more.
BTW, as noted, the Fed is not a gov't institution. It's a privately held central bank. There is some gov't oversight, but no direct gov't control. Seems a bit extra-constitutional to me.
JohnApril 17, 2008 11:07 a.m.
First, the consumers are at fault for making bad decisions and getting loans that clearly in the long term they could not afford.
Second, you can not absolve banks and mortagage companies from responsiblity because they made lots of money offering loans that they were well aware were ticking time bombs should the economy change. They wanted to make money with no regard for longterm issues.
Third, we do need to allow the market to adjust. Homeowners will suffer and sometimes a lesson learned the hard way is the best way not to repeat it in the future. If they are bailed out then nothing will be learned.
Fourth, banks and mortgage companies should now be forced into more regulation since they have shown they can't regulate themselves since making money is more important than helping people make good decisions.
EarlApril 17, 2008 11:04 a.m.
Yes, greed and recklessness on the part of buyers are the ultimate causes of the meltdown. But none of this would have been possible were it not for the existence of the Federal Reserve and the concept of fiat money, along with the dangerous practice of fractional banking.
EarlApril 17, 2008 10:52 a.m.
Matt 9:10 is right. We should allow the market to set itself right soon rather than postponing the inevitable for later. If we don't make that choice now, it will be made for us later.
EarlApril 17, 2008 10:41 a.m.
To Anonymous 7:57: this is not a phenomenon of capitalism. This is totally a result of government intervention in the market. IF the Federal Reserve (I know, I know, it's not a government agency, but it's empowered by the government) had not inflated the market with fiat dollars, IF Congress had not given artificial incentives to home buyers, IF regulators had not allowed the creation of sub-prime financing, etc., etc., the "greedy capitalists" wouldn't have had the tools to manipulate the market into this catastrophe. You're never going to rid the world of greed, but you can keep them from tools to ply their trade.
Don't blame meApril 17, 2008 10:39 a.m.
You can thank the neocons for the mess we're in.
I didn't vote for them.
The administration we have today doesn't give a (blank) about you and me.
Monsterhomes Monster DebtApril 17, 2008 10:38 a.m.
Utah leads the nation in supersized homes. First and second time home buyers think they have to go for the 6,000 square foot dream house. The monster homes are fake like the people. The primary facade gives the illusion of a manor or estate with ornate brick and stone work, banding around the windows, shutters on the windows, beautiful wood front doors, with a professionally landscaped front yard. The his and hers SUV's in the driveway. The secondary facades are one of three colors of tan stucco used in the subdivision with no architectural interest at all. the tiny windows look randomly placed on the spacious plain walls. The landscape has one tree and one bush and the patio set is white plastic from wal-mart. What ever happened to kids sharing a room; I am college educated and have a good job. I live in a 1947, 200 square foot home I can afford and am paying my fast offerings to help pay Barbie and Kens mortage when they going crying to bishop that they will lose their vinyl castle on the westside of town.
they'll never say itApril 17, 2008 10:37 a.m.
You are never going to hear any governmental person say, "It looks like the economy is going down the drain. If I were you, I'd start saving my money."
If they did, there would be a run on the banks like you and I have never seen before.
High home prices hurt us allApril 17, 2008 10:29 a.m.
Over priced homes hurt everyone - the market needs to drop. If my home goes up in price it is paper money unless I sell. Meanwhile my property taxes go sky high - just ask the folks in Davis County and Ogden Valley. Plus now my kids have to pay more for a home. Do the math - My home goes up say $100K, now each of my kids has to also pay $100 K more so... in the end as a family we are much worse off. I would rather keep my home priced reasonably than see the consequences with property taxes and my children being unable to afford a home.
StewartApril 17, 2008 10:24 a.m.
Home prices in Utah have not yet dropped a significant amount. I suggest that anyone that has a "subprime mortgage" refinance now. Oh, you say they don't have any equity in the house since it was financed at a 100%? In that case the owner is no different than a renter and has nothing to lose financially speaking, and will be be much like the renter who doesn't pay the rent. Why should the taxpayers have to pay for their gambling loses? And that is exactly what this is.
Lesson to be learnedApril 17, 2008 10:24 a.m.
There's a lesson to be learned in all of this. Teach it to your children:
When I was newly married and in college, my wife and I lived in a one-room apartment (not one bedroom, one ROOM) for $200 a month. After we graduated we looked forward to buying our first home. We decided to wait until we had enough money to put 50% down.
It took us two years - we were making almost $100k at the time. Do you know how hard it is to voluntarily stay in that situation when you're making that kind of money? Several times we asked ourselves "what are we doing here?"
But we stuck with it, bought our house, and thanks to our patience and sacrifice we're in a great situation today.
Teach your kids that a little sacrifice now will pay huge dividends later. And teach them to be patient - you can't have everything you want right away.
ObserverApril 17, 2008 10:13 a.m.
America is a capitalistic nation. It's survival of the fittest, aka the greedy. That's how it is. If you can't compete, get out of the way. There is no time for compassion, sympathy, understanding, or helping. There's only time for getting what I want, when I want it, how I want it........right now. It's all about me, me, me. No genuine spirituality.....just the kind you see selling on TV......religions selling themselves through TV ads and TV preachers. Religious greed to get more converts to get more money and power. A nation who's laws, politics, and policies are bought and paid for by big business. That's what America has become. A superficial, greedy, arrogant, belligerant nation with no soul. It's disgusting.
Who's to blame?April 17, 2008 10:11 a.m.
Is it the consumer who purchased more house then they could afford or is it the mortgage companies who pumped the ARM loans and told the consumer that they could refi in a couple of years when the value of the home would allow them to get a better long term rate or is it the banks who allowed the consumer to borrow money on stated income with nothing down and bundled those loans together and sold them off to pension and hedge funds?
Wow...April 17, 2008 10:07 a.m.
I am totally agreeing 'holding out'. And yes, things will be fine if left alone. Lowering interest rates further only delays the inevitable.
To those that think it is impossible for house values to plummet SO far, you need to look at the rest of the country.
And whoever said it was Alan Greenspans fault is...well, not very smart. First off, before he stepped down from office (that's right he is no longer in charge of the federal reserve), he spoke quite a bit about the housing bubble. He warned everyone that it would burst. Not his fault that most of the country didn't listen.
Oh and both the lender and the borrower are to blame. The lender because they lent out too much money to people who don't realistically have the means to pay it back. The borrower because they didn't do the math and realize that they were overextending themselves.
jewelApril 17, 2008 10:03 a.m.
If we think it will happen
scandia partnersApril 17, 2008 9:57 a.m.
UH...yes, your property can drop to where it was 5 yrs ago...it can happen real easy...because it was overpriced when you bought it 5 years ago...look at Shillers chart...we can easily go back to the mean.
Jack SwansonApril 17, 2008 9:55 a.m.
"This report is a joke"...you're the joke, this market is blowing up like everyplace else but worse...when you comebine low incomes with the biggest houses in the country it spells disaster...you're the joke pal....deal with reality...AND YES....FORECLOSURES do count as comps.
SamApril 17, 2008 9:41 a.m.
I agree with HOLDING OUT!! Not cruel. Just stating what a dumb thing greedy people got themselves into, not reading and understanding the playing rules. I am glad to see housing take a hit, and come back down to reasonable levels. Now if folks will just learn from what is going on and not repeat it in the future. Ya Right!!!!
Re: Holding OutApril 17, 2008 9:43 a.m.
While Utah housing prices haven't hit a bottom, home prices in the West are a mixed bag of complications. I agree that Utah will be hit further by price depreciation but not as bad as areas that have experienced extremely high house appreciation in recent years such as California and Nevada (The higher you go, the harder you fall). Utah housing appreciation was more modest (with the exception of St. George), so depreciation won't be as severe. Secondly, there are other forces that will pressure house prices upwards. They are high inflation and high energy prices. Construction costs are not getting any cheaper, so once the financial mess abates, I expect a return to modest price appreciations along the Wasatch front. Another source of higher housing appreciation in the West and particularly Utah is the lack of private land. Most of Utah's land is federally owned, which makes the limited amount of land available for homes along the Wasatch quite scarce. They are not making any more land. However, Holding Out is smart to wait, but he/she might hold out for so long, that the bottom of the market could come and go before realized.
DaveApril 17, 2008 9:31 a.m.
Real Wealth you would have to sell your wheat to triple your money and then what? Wheat is not an investment but if it makes you feel good so be it.
For those of you who are saving your money I hope you are saving it in a non-US currency because if you are saving it in US dollars its value is falling faster then RE values.
Read some books people it is never as simple as you think it is and so far there is no time travel so no one knows what will happen in the future.
lost in DCApril 17, 2008 9:35 a.m.
There has been little to no regulation of mortgage brokers, they are outside the state and federal bank regulations. Many are crooked, most (hopefully) are not. Hopefully, meaningful regulation of mortgage brokers will come out of this mess, but nothing else. Some people are fools, most (hopefully) are not. That being said, NO BAILOUTS!!
MCApril 17, 2008 9:26 a.m.
What the press doesn't report is that the banks are causing much of the problem. They have received hundrends of $Billions in low interest Fed loans; but they are sitting on the money and refusing to fund loans. They are waiting for interest to rise at which time they will make a fortune on the spread. How do I know? We are builders. We don't have a single sub prime loan yet many of our clients face foreclosure because banks won't' fund completion loans. Ask any realtor you know. They'll tell you that loans over $400K sit un-funded even though the Fed has funneled $Billions into the banking system.
Roland KayserApril 17, 2008 9:29 a.m.
We will bail out the bilionaires who profited from the securitization of mortgaes. We won't bail out the homeowners, that would be socialism.
To Anonymous | 6:30 a.m.April 17, 2008 9:21 a.m.
Maybe he was, maybe not. With a 60+ percent rate of "extremely obedient" red-lettered sheep in this state, it's hard to tell sarcasm from mind-numbed obedience.
Wednesday's ChildApril 17, 2008 9:17 a.m.
A home foreclosure in most instances is the sole responsibility of the borrower. When I purchased my home, I signed the papers, I had a chance to review them, I understood how my mortgage worked, what the payments would be. Lenders offered products that consumers wanted and some consumers burned themselves by taking them. Everyone who gets a mortgage is an adult and should take PERSONAL RESPONSIBILITY for how they handle their finances. This is not government (i.e. the taxpapers) responsibilty. I didn't overextend myself on my mortgage and I should not have my taxes go towards cleaning up another's messed up mortgage.
MattApril 17, 2008 9:10 a.m.
The most frightening posts on this story are the ones that say government oversight is the answer to this problem. What we are seeing is capitalism at work--borrowers and lenders made bad decisions, and it's time for those who made poor decisions to suffer the consequences. Further government oversight will only hamper growth. Allow the market correction to occu and the market will weather the recession and grow again. Increase government oversight and the market will suffer long-term.
AnonymousApril 17, 2008 8:54 a.m.
Sooner or later people return to basics.
(The smarter ones anyway)
Less is more will come to be known as the only way.
(for those paying attention)
Then people will once again embrace each other regardless of religious affiliation.
This is Funny!April 17, 2008 8:58 a.m.
The Government, Alan Greenspan & the Federal Reserve (which, by the way, is not a Government entity) has caused more problems than it has fixed ... and now we have irresponsible people, running around trying to blame anyone, but themselves, for their problems.
The Government will cause more problems by trying to fix it & we will loose more freedoms & elected politicians will get bigger "We are smarter than you!" egos!
"Those who have caused the problems are the last ones to look for to solve the problems!"
Government needs to get out of the way & let those who "win" - win, & those who "loose" - loose. Quit trying to punish those who "win" by taking it away & redistributing it to those who "loose".
Cutting up a 1st place trophy & giving it to all participants does not make everyone a winner, it just makes more participants that don't want to put out a full effort anymore, since they will be getting a piece of 1st place.
orionApril 17, 2008 8:52 a.m.
For the last half dozen years or so, I have been wondering how people could afford the monster houses going up along the Wellsvilles and across the east side of Cache Valley.
I now have my answer: They can't.
My $.02April 17, 2008 8:51 a.m.
It's all about personal responsibility and people's increasing desire to not take any.
Too much credit card debt - file for bankruptcy and make it the bank's problem. Too much house - default and make it the lender's problem. Bad mortgage - cry and make it the federal government's problem. If you make dumb decisions, you need to face the consequences. How is anyone supposed to learn from their mistake if they are bailed out every time they make one? Political leaders spending time trying to figure out ways to spare these people the pain from the problems they've created themselves seems futile. The best service they could provide is staying out of the way, letting the situation unfold and focusing on controls that could be put in place to keep this from happening again.
ThomasApril 17, 2008 8:50 a.m.
It's not Greenspan's fault. As people have already pointed out here, our own greed (read "House Flippers") got us into this mess and has caused the problem. In creating artificial demand by buying multiple homes with minimum down, the inevitable price ceiling was hit and people stopped buying. Those who did buy before the ceiling was reached now have a home that is worth less than their loan balance and will have to live with the result. And the flippers stuck with multiple homes will lose everything they gambled for. The same thing happened in 1929 with the stock market. Greed will always get you in the end.
What It Means to ProsperApril 17, 2008 8:50 a.m.
What a despicable joke this whole mess is!
Why do you think we receive several credit card applications every week (or day) and endless advertising about using the equity in homes? Why do you think the easy credit scam has been going on forever and will continue into the future?
It's all about money and people either understand and benefit from the principle of credit, or they become slaves to it. It's about that simple.
And, some of us have been warned, and warned, and warned for decades no less. Yet, we have had as many problems with money, bankruptcy, etc., as any state or group of people.
My theory is its a misunderstanding of a theme several of us are familiar with -- "if ye keep my commandments, ye will prosper."
It's just that we haven't understood that "prosper" means enough resources to have full stomachs and clothing and a dry and warm place to sleep at night and opportunities for education, for example. Instead we think "prosper" means fancy vacations, boats, snowmobiles, big trucks and lots of other big-boy toys.
Heaven help us when all of the "give" has been squeezed out of national and world markets.
HowardApril 17, 2008 8:43 a.m.
In order for the 4% foreclosure rate to have any meaning we need to know what the average foreclosure rate has been in past housing slumps and during good times.
AnonymousApril 17, 2008 8:40 a.m.
Jay--Greenspan allowed this to happen?? What about all the people who didn't bother to find out what they were getting into when they got their mortgage(s)? These days it's all about a lack of responsibility. Apparently, you and many people think that babies took out those mortgages because they couldn't think for themselves. Oh, those big, bad mortgage companies! Oh, brother. People need to grow up and take responsibility for their choices, and not blame the outcome on others. Maybe if people around here actually lived within their means, things like this wouldn't happen. I am one Utahn for whom these "horrible" foreclosures are beneficial, because I'll be looking to buy a house. Thanks to you, all you brainless people!
re: re: Dear Holding outApril 17, 2008 8:30 a.m.
I make 110k per year, have owned my humble 1500 sqft home for over 10 years now. I still drive a 1989 vehicle. I watched the housing boom with dismay and avoided it at all costs. It was too expensive 10 years ago after the boom in the 90's, let alone the cartoonish levels its at now. My job is at just as much of risk as anybody else's and I know that my savings won't keep me alive for too long. The very real possibility that I may lose everything due to the carelessness of others ticks me off beyond words. This country is at the pinnacle of pigginess (just made that up) and laziness. Its beyond disgusting. Everybody wants everything right now. Have you noticed that it affects our lack of civility with each other as well? And even though I try to do otherwise, I don't leave myself out of that statement. If every nation consumed like we do, the world would look like the moon in just a handful of years.
QuestionApril 17, 2008 8:28 a.m.
Am wondering what do you do when 2 years ago you qualified for a loan, bought the house, and have paid payments perfectly on time... but now you want to refinance the same house, and because of stricter recommendations from the Feds, you cannot qualify for your own house that you currently live in, and have paid mortgage on?
DarrenApril 17, 2008 8:27 a.m.
I remember when someone came to my house and tried to push one of these loans on me. Luckily I didn't. This hurts the banks as well as the person who borrowed. Neighbor will see their property decrease in value as well. The borrower and the bank both had a part in making this mess, yet the bank gets bailed out by the government...I mean you an I get to pay for it. The government needs to stay out of it and let the pieces fall where they may. I didn't do it and I don't want to pay for it.
EarlApril 17, 2008 8:27 a.m.
Jay, Greenspan didn't allow it to happen, he MADE it happen. Remember when he and the rest of the Fed took the interest rate down to 1%? Borrowing was so easy and plentiful that it drove the real estate market up sooooooooooooooo predictably. Now Bernanke is following in his footsteps by bring the rates back down again. All he's doing is throwing gasoline on the fire. It's going to a big fire sale on real estate!
Hoping for the bestApril 17, 2008 8:21 a.m.
I really don't care what the governor has to say about all this. I really am waiting to hear what "Super Dell" will say. He is a man who we all can trust, and he will certainly fix this whole foreclosure mess. If anyone can do it, "Super Dell" sure can!
Ernest T. BassApril 17, 2008 8:12 a.m.
Americans are too spoiled. Americans are completely narcissistic. This is good, it needs to happen.
The keeping up with the Jones mentallity will cripple Americans.
housefreeApril 17, 2008 8:12 a.m.
My little family has been "house free" for all but 3 years when we owned a little condo. We've lived with family for 5 years trying to make it on one income. It's just not going to pan out. Some were cut out to understand and play the job market. Others really struggle because the game goes against their nature. That second income is going to have to be added in the next few years. Still, I'm optimistic that everyone who lives wisely will feel less pain than those who overextended themselves as our debt-reliant economy caves. Say "so long" to the comfy life and "hello" to the simple life.
Let them drop back to normalApril 17, 2008 8:17 a.m.
Of course prices are going to drop. They're over-inflated. And they NEED to drop in order to be in line with the purchasing power of the average Utahn. If they don't drop, then the next generation of home buyers won't be able to buy. And for those of us who do own, a historically distorted amount of income goes to paying our mortgage (and lining the pockets of investment bankers in NYC), preventing us from purchasing the normal Utah goods and services that keep our economy hummin. Simple economics, folks. Anyone who thinks housing prices should be supported in the stratosphere should email me. I have some great $5 stock left over from the dot-com bubble that I'd be more than happy to sell you at the $200 per share that it once (stupidly) was. (I own two houses, by the way, so I'm getting hit with the rest.)
AnonymousApril 17, 2008 8:15 a.m.
To all those who don't get sarcasm:
The first post is funny!
Also, recessions are necessary for future growth. And when investors take risk (too large a home, variable interest loans, etc) then some are going to suffer. That's why they call it risk. Government should avoid any intervention. Let the recession happen and get over with, and then we can start another growth cycle. It is not possible to have uninterrupted growth.
hcApril 17, 2008 8:04 a.m.
This report is a joke. Look at the source and credentials of the author. What credence can be given to a "manager" of Health and Human services with Pew Charitable Trust? I personally think that a lot of the current problem is due to the insatiable thirst by the media for "gloom and doom" headlines and stories. If the same stories are broadcast over and over, no matter how unreliable the sources, the public starts to believe them and they turn into a self fulfilling prophecy. You can see this in some of the comments here like the person who is eagerly anticipating a 50% decline in home values. Having a foreclosure in your neighborhood doesn't necessarily mean that anything will happen to your house value. Foreclosure sales are generally not even accepted as comparables when other homes in the area are valued. The loss of income due to higher income taxes from renting and the risk of waiting and missing the "upturn" in the market may well outweigh the benefit of possible lower prices in the future.
AnonymousApril 17, 2008 7:57 a.m.
The Great Depression
The Great Depression Part II
Capitalism at its finest.
RE: Didn't Happen OvernightApril 17, 2008 8:02 a.m.
Amen to everything you said. It's tough convincing my son why that 1995 Ford Explorer with over 200,000 miles is still sufficient for my needs. It runs great and has never left me stranded. Aside from the expected repairs it was paid for several years ago. Last month when the starter quit I bought a new one at Schucks for $129.00 and put it in myself. My son said, for the umpteenth time, "I can't believe you keep spending money to fix that thing. Why don't you just go buy a new one?"
Son, think about it...$129.00 every six or so months for repairs or $500.00+ EVERY MONTH for payments. No rocket science degree required here!
I'm feeling pretty comfortable in our modest house with a fixed rate mortgage and only 7 years left to pay too!
Bigger and newer does not always equal better!
Shame on usApril 17, 2008 8:01 a.m.
Shame on us for not reading our loan terms more thoroughly before signing. There was never a time that I doubted or was discouraged by my 30 year FIXED rate of 5.5%...plus I didn't try to buy more than I could/should afford, even though I could have qualified for a much much higher (double) what I ended up buying. Shame on the consumer for not informing himself; there's no way I should put that responsibility on anyone or anything else. Government oversight cannot replace the consumer's common sense!!! Immoral loan brokers need to be handled, but I'm guessing that the majority of people just walked in and told the broker what they wanted, and got it, and now the masses have to deal with the fallout.
Also, I'm not moaning about a decline in the market, there's no way prices will drop back to where they were when I bought 5 years ago. I can handle a 10%-20% drop in home prices since my value is currently 100% better than purchase price.
AnonymousApril 17, 2008 7:55 a.m.
Holdin Out - Definitely has it right. Too many people live beyond their means to "have it all" right now, and can't see beyon the end of their nose. How can you not think there is something wrong about living a $100K lifestyle on a $75K income. The moment you hit a bump in the road (and it is not a matter of "if", but "when") such as losing a job, someone gets sick, divorce, etc. etc. realty hits in a big way. It is a sad thing, but adults need to act like adults and not try to blame the economy, the government, the banks, or anyone else for their decisions to expose themselves to greater risk than necessary. People in Utah, and America in general need to wake up and make better financial decisions about how and where they spend their money. People need to start thinking "long-term" and make a "life-style" adjustment. The economy won't change until attitudes change.
This is really very simple...April 17, 2008 7:43 a.m.
It doesn't matter what the government does or what mortgage companies offered...when you buy a house you still have to sign on the dotted line. If you didn't know what you were signing, that's YOUR fault. Too many people jumped at a chance to buy a house they couldn't really afford in the first place. "Interest only loans" and "variable rates" are cheap at first, then the price goes up - that's how they WORK. There is no trickery, no government scams - just people trying to get more than they could really afford and now they're dealing with the consequences.
Can't WaitApril 17, 2008 7:37 a.m.
I and thousands of others are just waiting for the dam break. Looking for a good deal in Utah. Can't wait, but will.
Real WealthApril 17, 2008 7:37 a.m.
My wife and I for Christmas purchased 3,300 lbs of white wheat at $10 per 50 lbs. Today it is worth $30 per 50 lbs. Is there anyone else who has tripled their investment in the last 5 months?
My dad taught me that it is real hard to eat money.
TyApril 17, 2008 7:40 a.m.
You know, i bought my house in Davis County about a year ago and I estimate I am already upside down. Luckily we can comfortably afford the house, but we are down somewhere around 10%-15%.
I expected this having come from California and watched what happened there. Of course everyone here kept saying "this won't happen in Utah cause our economy is different." The funny thing was that I heard every single one of these excuses in California before the housing market crashed.
The fact of the matter is that the market needs to correct. If we allow the government to try to fix it, we will just end up with more problems down the road. The whole cause of the over inflated housing market was a direct result of trying to stop a market correction (recession) when Bush was first in office. Now we are facing the same recession but being caused by different areas. If the government attempts to stop this one, then we will just be faced with another down the road. Sometimes the markets just need to work themselves out without the government stepping in the "fix" everything.
TimApril 17, 2008 7:33 a.m.
The ride up was a thrill and drop will be tough. Who could be surprised? We seem to think, rather consistently, that this will never happen again or to us.
JayApril 17, 2008 7:27 a.m.
I was surprised that Greenspan allowed this to happen. A couple weeks ago, USA Today printed a article, on the country of Sweden, which got themselves into the same exact problem, that the US economy is in. As he knew of what happened there, could he not think of way to prevent it from happening here?
Denny AndrewsApril 17, 2008 7:08 a.m.
The previous couple of comments are right on. Around here image is everything, and if it all has to be faked so be it. Overextend on your house, then tear every bit of equity out of it to buy the 1 ton pickup to get groceries, and a boat to drag around the desert behind it. Who knew such stupidity and blatant greed would come back on us?
It's their own faultApril 17, 2008 6:58 a.m.
I laugh out loud when I see people blaming the mortgage companies--WHATEVER! You are the one who signed on the loan...knowing full-well that if even the slightest thing went wrong you couldn't make the payment. Well, I'm with Holding Out--I've already bought a condo and a home and I'm planning to own a bunch of real estate before it goes up again.
AJApril 17, 2008 6:52 a.m.
Utah usually runs behind the times on things like the economy. Just as the economic boom was fueled by construction, the coming hard and deep recession in Utah will fall with construction. New homes permit down 75% to the lowest level since 1990. No more equity for people to take out of their homes to pay those debts and then go back into it.
So with construction drying up, where are the jobs going to go? What about all those workers who have construction jobs or businesses related to construction who are now facing economic hard times? They will be hit first and will be hit hard. In 2006 out of 54000 new jobs, 14000 were in construction or 26% of the total new jobs were construction. Well, if we lose 20% of our jobs to 25% that is going to hurt. What about extra spending money? No more eating out (or less of all of this) and that also means keeping older cars longer, no thrill spending. Things are going to cycle back to being rough, but a year or so after the national economy revives so will we. Maybe after the national election.
KevinApril 17, 2008 6:44 a.m.
To "Holding Out"
EXACTLY! DITTO! But the government will prop up the market and delay the correction. They need to let the foreclosures come. Let the market shake out, and let the prices come down. It will be OK. Then I'll buy. Then liquidity will return to the market.
Some will get burned. But it's the marginal, speculating home buyer got us to this untenable situation. Let them foreclose, have bad credit, have to rent. Those risk-ignorant buyers of mortgage-backed securities, and so-called predatory lenders have suffered already. This is right. This is what should happen. Don't need regulation. Just let nature take its course.
Consumer's FaultApril 17, 2008 6:33 a.m.
I'm sick of hearing how this entire mess is the "Mortgage Companies Fault!" Its the fault of the American public! Nobody held a knife to the throats of individuals that took out subprime mortgages. They new the risks. Its not the mortgage company's fault that these individuals are financially ignorant. Its simple: Do not get something you cannot afford! Oh wait...we live in Utah - where the next family is always trying to keep up with the "Joness". ITS OUR OWN FAULT! AND NOW YOU WANT THE GOVERNMENT TO BAIL YOU OUT?? YEAH RIGHT!
Failed?April 17, 2008 6:30 a.m.
Nobody put a gun to anybody's head and forced them to borrow more than they could pay back. Buyer be ware!!!! Consumers need to READ THE CONTRACT. We are all big boys and girls. This can't be laid only at the door of the lenders. There were plenty of greedy borrowers, living well beyond their means out there. With that said, however, I have to put the blame at 55% lenders and 45% borrowers because (for reasons I do not understand) people think that when they qualify for a loan they think it means it is financially prudent to accept the loan. They believe that loan officers are financial advisors. NO THEY ARE NOT. They are salesman. They do not care if you have money left over to save for retirement, go on vacation, or send your kids to college. Bottom line: Economic illiteracy is killing us. People have to stop living beyond their means. Too many believe they are "entitled" to live in a $400,000 house on a $40,000 income. Simply amazing.
AnonymousApril 17, 2008 6:30 a.m.
Pssst Pssst,
Dave was being SARCASTIC, as was I.(As For Me)
Truth Is HardApril 17, 2008 6:28 a.m.
Those picking on "Holding Out" must have missed the part about him saving money. He's right about getting a house for half off. And he nor I wants the economy to crash. We just know that it will. A country's economy can't be floated on massive debt forever.
oink oinkApril 17, 2008 6:29 a.m.
Don't blame the banks and don't blame the government.
People were greedy.
If a deal seems to good to be true it probably isn't.
All hogs end up at the slaughter house eventually.
didn't happen overnight.April 17, 2008 6:12 a.m.
Most people mistakenly think the Great Depression just happened overnight.
They also forget that is the time when millionaires were being made by the sackful while the rest of us little people were either just getting by or starving.
Start telling your children and grandchildren that the best things in life are free and that they really don't need that Lamborghini.
All about statusApril 17, 2008 6:14 a.m.
One of the things that's struck me in the several years I've been in Utah is the importance of status. I've seen so many people buy houses far larger and fancier than their needs: more importantly, too large for their budgets. Combine that with the expensive cars in the carports, the boat and the vacation cabin, it's not surprising that the chickens eventually come home to roost.
I don't know why it's so important to be seen as rich, when personal finances don't support it. I hate to see my own property value go down as a result, but it's hard to feel sorry for people whose vanity got the better of them.
TonyApril 17, 2008 6:09 a.m.
What planet are you living on? Do you watch the markets? Have you seen government statistics? Are you dreaming?
It's about time the market there corrected. Irrational borrowers and their liar loans should be punished. Let the markets work. Why should I help subsidize the bailout of people making poor decisions. Let the markets work. If you were smart and didn't overpay, good for you. If you got in over your head, tough luck.
re: Dear Holding outApril 17, 2008 5:43 a.m.
You'd better pray the job you now have and your nest eggs of savings are still there when you need them.
I have seen people in your situation: good job, living wisely lose it all in a heartbeat...No fault of their own...
Don't think you are beyond something catastrophic happening to you.
I hope the housing situation wakes people up, but I don't hope they lose their homes, that is cruel.
I saw a bumber sticker yesterday that said,
We all need to do that!!!!!!!!!!!!!!!
Also holding outApril 17, 2008 5:39 a.m.
Prices have been dropping in St. George for over a year now. I'm still holding out here because mortgage payments vs. income and mortgage payments vs. rent ratios are still far above historic norms for St. George. Salt Lake's boom was just a little bit later than ours, and it's bust will follow too.
We've also been saving money and have a high household income and can afford a house, but simply won't throw our money away on such a rapidly depreciating asset. It's also unwise to leverage your money on something that won't appreciate in value.
Busted BusterApril 17, 2008 5:33 a.m.
There was already a mechanism in place, and it failed. We allowed the Federal Reserve to take over our monetary system. They were supposed to control inflation by regulating the flow of money. They supplied the cheap money that caused this boom and its eventual bust. They alone are to blame. Get rid of the Federal Reserve and quit using fiat money.
Problem solved.
dahApril 17, 2008 5:19 a.m.
dream on, a house at half the price? keep saving your money you will need it to pay your ever increasing rental rates. these foreclosed properties can be occupied by our increasing population they refer to it as immigration i have a house down the street with about 7 immigration occupants in it. they can split the rent, cheap housing.
As For MeApril 17, 2008 5:13 a.m.
I won't believe there is a problem with just Guv Huntsman saying there really is a problem. I need Jeff Thredgold to say there is a problem. Only then will I believe it.
Charles H. CardonApril 17, 2008 5:10 a.m.
Re: Holding OutApril 17, 2008 4:54 a.m.
I am so happy for you, you've had the opportunity to save and jumped on it. You are also holding out to buy a house, good for you.... However, you are pretty dang rude to HOPE the housing bubble hits Utah hard. How sad. My guess is, even though you make a good living you don't have many friends, with an attitude like yours who would even want to be around you.
What comes around goes around, maybe your job isn't so safe buddy.
Free agencyApril 17, 2008 4:52 a.m.
But those consumers should have taken the time to read what they were signing. I was always taught if it is too good to be true, it probably is. The same goes for a person who is purchasing a $300K or more home with a monthly payment of only $1000. It's impossible! The consumer should have done the math and realized it wasn't true. Same thing as a car. People buy cars based on payment. Some neglect to realized the payments are low because they are stretched out over 7 years.
They made their beds now they can sleep in it. The government doesn't have to govern us in all aspects of our lives. We should all be grown ups.
liberal larryApril 17, 2008 4:43 a.m.
This whole mess is a direct result of policies and attitudes started under Reagan. The idea that all government is bad has caused the decline of responsible oversight by our federal government. We see it in energy planning, immigration, healthcare, and even foreign policy. Bush has exemplified this irresponsible trend with this bungling of Katrina, Iraq etc., it is hard to lead a federal system if you think that government is the problem.
awesomeronApril 17, 2008 3:50 a.m.
Buyer Greed and Bank willingness to loan to unqualified buyers. People wanting more house then they can afford and adjustable rate mortgages. Being upside down in a Car is okay and you kind of expect it, just hold on to the vehicle, pay it off. Then Bank for 3 years what would be the Vehicle Payment. Then Pay Cash for the next one, and from then on. Being upside down in a House is a vastly different story. Some people are going to have to either double up, or move back in with their parents. Back to the Silent Scream Days. I feel badly for them but they made their choices. Some will pay for their homes with their Tithe Money, which will open up a whole set of other problems. 2nd Jobs really kill families and the 2nd job money almost always gets tied up in paying increased debt. When the 1st dollar from job 2, gets spent on something other then what it was planned for the 2nd job holder needs to quit. Its a fast and down hill slope. More Education always equals a better job. You never get the close times that are lost back.
Ronald A, YoungApril 17, 2008 3:24 a.m.
Thats only about 4 percent. If a couple of things happen in this years legislature then I will be ready to leave this Lovely Rock for the mainland. You have to buy within your means and even below it you house is vital and because of Tax advantages you should buy instead of rent. I do not believe that people went into adjustable rate loans with out knowing it and not thinking the rates would adjust. I accepted (the buyer is the customer) a slightly higher fixed rate just to avoid that. The Market can adjust do to supply and demand of both buyer and the Banks willingness to loan. Thats why when I did buy I hired a Shark (lady real estate agent) to represent me. She found me a nice house in a less desirable area of the island. I live underneath an extent Volcano Cone. Its been that way for millions of years and the people tell me, as long as the Volcano on the Big Island continues to go off we are safe. When the Island came out of the Sea, my part came out first. I think the problem was mostly Buyer Greed.
Failed economic policiesApril 17, 2008 1:39 a.m.
Perhaps some type of federal regulation is needed to protect people from mortgage brokers who stretch qualifications and fail to adequately inform their clients of the negative potential of some of their loan vehicles.
The lack of oversight in this industry has created a mega problem for the nation.
The cry of "Get the government off our backs and let business do the business of business" is no longer heard as often and it is replaced with the cry of "Some type of federal program is needed to bail out our economic institutions."
The effects of their own "laizze faire" policies have come back to haunt them.
Holding OutApril 17, 2008 1:21 a.m.
I have a great and very safe job and I earn a great income (95K). I love to save my money. I haven't bought a house yet because I feel that prices are too high. I know I can afford one but why pay for something that will depreciate like a car? I hope the housing bubble hits Utah hard. I know too many people that live like they make a lot of money, and I know they don't. Utahns and Americans in general need to learn how to save. The bursting housing bubble is a good thing. The government needs to stay out and let the market fix itself and let grown adults suffer the consiquences of their irresponsible spending habbits. I am a responsible adult and I am paying the price right but not living a 95K lifestyle. I will be rewarded for my thriftiness when I buy house at half the current market value. Americans need to do learn to do the same.
TOTApril 17, 2008 1:10 a.m.
Well, it has all finally come home to roost. I have been warning about these things coming for nearly two years. I had people tell me I was crazy. Numerous articles were run quoting local economists saying that Utah was different for a hundred different reasons.
Utah isn't different, just late.
Here we go.
DaveApril 17, 2008 12:45 a.m.
Don't believe this stuff, until our leaders in the state acknowledge this it's true. I have read many stories that say our leaders say Utah is different than the rest of the country and I trust them. When the governor says we may have high foreclosures they it could be true, but until were told it don't listen to this stuff.
Just like with the recession looming, until I hear President Bush say it's happening it's not true.
If we just ignore this stuff it won't happen, trust our leaders god be with them.


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subset: commoncrawl


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Early in January, shares in Jubilee Platinum PLC (LON:JLP) hit a 12 month high of 4.325p. Although this price is some way off the levels hit during the peak times of the last mining boom, it's not far off the three year high of 4.625 hit in September of 2015.
Given that times have been tough in platinum for many years now, as supply continues to outstrip demand, that's not bad going.
So, what's the secret?
A turnaround story
"Jubilee's a real turnaround story," says chairman Colin Bird.
"At Dilokong it's going well. We're making a lot of money with chrome. Our original deal was to treat the dump, take out the platinum and give back the chrome, but now we've got the rights to the chrome as well."
This has meant that Jubilee has been transformed from a mining and mining processing technology company into a serious cash cow.
Income is rising
This process had just begun when the company reported its last set of full year results, back in November 2016, but the signs were already clear enough. In the year to June 2016, Jubilee was still loss-making, but it was talking about total earnings from Dilokong in the third quarter of £2.291 mln.
Now, says Bird, the income from a full year of tailings processing at Dilokong is likely to come in at between US$8mln and US$10mln.
With a second tailings processing operation now coming on stream at Hernic nearby, a similar sized income stream is about to be added.
This is a far cry from the company that struggled to make a success of its deep-level platinum resource on the Bushveld and then moved into speculative exploration in Madagascar.
The key is the deployment of the specialist Conroast processing technology by the company's able chief executive Leon Coetzer. It's the careful application of this technology in a space that many other companies have tried and failed to move into that is now turning waste rock into dollars for Jubilee, and moving up the share price.
"We're getting all this chrome, and now we're stockpiling all this platinum," says Bird.
Platinum plans add further potential
That last is a conundrum though. After a modest rise in the middle of last year, platinum price has resumed their downward trajectory, a trend that's been ongoing for six or seven years now.
"We tried to defer building a plant for the platinum," explains Bird. "We thought, if we've got all this platinum why not let it go to a platinum company, and the companies would have bought our product, but they weren't willing to pay enough. So, we're going to build a small and economical plant after all, and that's going to work really well for us."
Meanwhile, things finally seem to be moving on the company's Tjate platinum project, where a mining right has been awarded after a drawn-out process.
The execution of the mining right is a significant milestone in the development of the project, located in the Limpopo province of South Africa, and adds extra credibility to Jubilee's mine-to-metals strategy.
It means the Tjate Platinum Corporation now has the right to mine and process all platinum group metals (PGM), chrome, nickel, copper, gold and various other minerals in the project mining area.
As Tjate's largest shareholder, this is excellent news for Jubilee.
More deals on the way?
So, what's the company going to do with all the cash that's coming in?
First, there's ongoing debt to pay down, but Dilokong is allowing that to be serviced with ease.
"Some of the debt commitments we've got in front of," says Bird.
Perhaps more significant for the longer-term, he hints that there may be a certain amount of corporate activity in the pipeline.
"We've one or two deals on the go," he says.
It'll be interesting to see what happens next.


text:
The term "Ajam" is an originally Arabic word that has historically signified otherness. Originally the term meant "mute" — referring to those who were unable to speak Arabic properly — and over time the meaning shifted to refer to anything "foreign" or "strange" (i.e. non-Arabs). The term traveled into nearby languages and also acquired the specific connotation of "Persian" over time.
While many people see the term as a pejorative for Persians, the word has been utilized in many different contexts — from Yemen to Sub-Saharan Africa to Andalusia — to refer to the spaces of the Arab world's "others." These spaces, however, have historically been sites of tremendous cultural output and critical rethinking. It is only by thinking from the margins that we can truly begin to understand and contextualize the center. The debates that took place in the lands of Ajam — all those worlds that developed at the edges of monolithic definitions of cultures, people, and civilizations — help us rethink and reimagine worlds where fluidity, fusion, cosmopolitanism are the norm, not the exception.
Using the term Ajam was a way to reclaim a word often thought of as pejorative, while also drawing attention to how the state of Ajami "otherness" helps us imagine alternative worlds. By using Ajam, we've employed a tacit pun, forcing our audience to reckon with the previously silenced realities of the margins.


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The Sheaf writer Tyrel Eskelson has this concise article on what it means to be a skeptic:
It is perhaps a common misconception that one who defines him or herself as a skeptic could also interchangeably be labelled a contrarian or a disparager.
A skeptic is not someone who is cynical, close-minded or rejects new ideas. In fact, it is quite the opposite.
A skeptic is someone not in a fixed position but rather one who adopts a process. Skepticism uses the application of reason to evaluate all claims and requires compelling evidence before something is believable.
Modern skepticism is embodied in the scientific method, which gathers data to formulate and test natural phenomena. With the use of this tool a claim becomes factual when it is confirmed to such an extent that it would be reasonable to offer a provisional agreement.
via the JREF


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Patrick Millar
Head of Products and Solutions
Patrick has an established career in the financial industry with a focus on business building and service delivery that covers clients globally. As Head of Products and development his objective is to bring together four teams to deliver solutions to clients: Investments, Lending, Treasury, and Wealth Structuring. His objective is to build a satisfied client base that can depend on ABN AMRO for their Private Banking needs.
Patrick is a Chartered Fellow of the Chartered Institute of Securities and Investment and is active in the Guernsey community. He has an MBA from McMaster University and a LLB from the University of Northumbria.
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