Monday morning I attended the Economic Forecast Breakfast hosted by the Salt Lake Board of Realtors at the Little America Hotel.  700-odd realtors and a newspaper reporter were in attendance to listen to Representative Rob Bishop and Professor James Wood from the Bureau of Economic & Business Research at the UofU Eccles School of Business tell us how bad things are and how really bad they're going to get.

Yesterday the Salt Lake Tribune published an article about the event: http://www.sltrib.com/ci_11611462?IADID=Search-www.sltrib.com-www.sltrib.com

Congressman Bishop was clear and convincing on why he had not voted for the bailout or for the stimulus package - and funny,  "It started with the Treasury Secretary telling us to just give him the money and go away.  Then they kept telling us the world would end if we didn't pass the bill by Friday.  But it didn't pass, and the world didn't end.  Then they told us we had to pass it before the financial markets opened on Monday, but it didn't pass, and again the world didn't end.  Pretty quick I started to not believe what they were telling me."  He also made a very convincing case for why tax  cuts work better than government spending (for one thing, there's less cash out of pocket...).  In the end Rep. Bishop was optomistic.  He seemed genuinely pleased with the willingness of the Obama administration to work with both parties, and felt that a better bill would come out of the Senate.

Dr. Wood, who spoke first, was more disturbing.  Dr. Wood specializes in construction and housing industry issues and has addressed the realtor community many times in the past.

He felt, absolutely, that we are going through the worst recession in Utah in over 50 years.  He said that the construction industry hasn't contracted this severly since WWII.  2007-2008 we saw the most dramatic drop in home sales in the last 40 years.

Most disturbing to me was his chart showing the change in Utah employment month-by-month since October 2007.

Still, Dr. Wood's forecast was similar to what I have been saying for the last 2 years:  we'll see bottom in 2009 and will start to level out in 2010.

It's been interesting to me to read the comments online for the Tribune article.  Many of the commenters have blamed realtors for the market run-up in 2005-2006!  Strangely enough, in 16 years I have never had to talk a seller into listing their home at a higher price...

Selling a house is just like selling a used car or a used bicycle, for that matter.  The seller has an opinion of price, the realtor has an opinion of price, even an appraiser has an opinion of price (opinion only - not information sent from on high), but the ONLY opinion that matters is the BUYER'S opinion.

It is only ever the buyer who makes a decision to purchase a home.  Could any realtor talk you into buying a home you didn't want?  A realtor's legal and ethical obligation is to work in their client's best interest - whether I am working for a buyer or a seller my job is to get my client the best possible price we can possibly negotiate.

Remember, real estate is a supply and demand market.  In 2005-06 when home sales were at their highest some parts of town had literally 2 weeks of active inventory available for sale - if there were 15 active listings in a neighborhood there were 30 under contract with buyers.  And guess what, lack of supply drove prices up.

That same neighborhood today has 5 months of active inventory - 82 active and only 17 under contract.  The good news?  Inventory levels have dropped dramatically from a year and a half ago.  3rd quarter 2007 active listings in SL County topped 10,500 when they should have been around 7,200 - 45% higher than they should have been.  Back then that same neighborhood had 11 months of active inventory.  And, not surprisingly, prices declined as inventory levels rose.

Truly, things are better than they have been.  31% of the active listings in SL County are now selling - up from 23% a year ago.  (At the peak, in 4Q'05, 71% of listed homes sold.)

The national news scares everyone, but Utah is just, as always, behind the curve.  Parts of the national market are starting to improve.  Utah's housing downturn will be shorter and shallower than the rest of the country.  Most of our homes were purchased by people who actually lived in them, not by investors.  The national real estate bubble popped in 2005, our market didn't downturn until 2007, so the national recovery effort has a jump on us.

Don't worry.  It'll be good.  Buy a house - get a great deal and a great interest rate.  Raise your kids.  Be part of your community.  In 3-5 years everything will be different.