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S.L. HOUSING COSTS MAY KEEP GOING UP

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If you are in the market to buy a home, you may very well be appalled at the rate at which housing prices have soared in the Salt Lake area over the past year.

And with the recent jump in mortgage interest rates since February, your dream house may have moved even further out of reach.But if the national business and financial newspaper, Barron's, is correct, local housing costs may get even more expensive before they get cheaper.

In last week's issue, Barron's listed Salt Lake City as one of 10 cities across the nation in which it says residential real estate is most undervalued - meaning there is plenty of room for further increases in housing prices.

Barron's, a weekly publication of Dow Jones, which also publishes The Wall Street Journal, says it applied techniques most often used in selecting stocks to determine if homes in 51 metropolitan areas were undervalued or overvalued.

According to Barron's spokesman Lawrence Budgar, Barron's compared 1993 median home price to each of the 51 areas' per-capita income. It then factored in local job trends, housing permits and a three-year pricing history to gain some insight on where housing prices may be headed.

If Barron's technique is an accurate forecaster, those thinking of buying a home or condo in Honolulu should be very careful. Barron's says the Hawaiian capital has the most overvalued housing in the United States and can expect to feel the effects of slowing investment from Japan and other Pacific nations.

Same goes for Seattle, where defense and paper industries are showing less support for the overall economy, a downturn that could put pressure on Seattle's housing prices.

Other overpriced areas for housing, according to Barron's, include San Diego, with its heavy reliance on the defense sector; San Francisco and Riverside, Calif.; Baltimore; Fort Myers, Fla.; Grand Rapids, Mich.; Reno; Madison, Wis.; and Las Vegas.

Prospects are brighter for Portland, Ore., says Barron's, even though that city is also considered overvalued. Foreign firms are relocating there, which should sustain its growth.

The most undervalued housing market in the United States, says Barron's, is Toledo, Ohio, which has enjoyed a moderate rise in payrolls and construction despite below average population and income growth.

Other undervalued cities in addition to Toledo and Salt Lake City, according to Barron's, include Tulsa, Okla.; Hartford, Conn.; Memphis, Tenn.; Omaha, Neb.; St Louis; Baton Rouge, La.; Nashville, Tenn.; and Phoenix.

Cities which Barron's says have "fair" housing values include San Antonio; Albuquerque; Orlando, Fla.; Cleveland; and Philadelphia.