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Show Page Enterprise Review, March 17, 1976 10b OMR (OUTSIDE Residential Sales Report by Andrew B. Hansen, Broker Projections for 1976 show a significant increase in all major aspects of the economy with the most significant facPrudential Federal Savings tor being an increase in jobs to and Loan Association held 20,000 plus, and a decrease in their annual Housing Seminar unemployment to 7.5 percent. in Salt Lake City March 9. Personal income should Discussing the projections for increase to $6,475, up 10.7 1976 were Mr. Gene Donovan, percent. ' The housing industry is President and Chairman of the Board, P.F.S., Mr. Hayden expected to increase nationCalvert, Executive Vice Presi- ally from 1.16 million starts in dent, P.F.S., Dr. Richard 1975 to 1.5 million in 1976. Pratt, Professor of Economics, Projections for the upcomUniversity of Utah, Mr. Garth ing year in Utahs housing Marston, Chairman of the industry are not as bright as Federal Home Loan Bank the national scene in terms of Board, and Dr. Leon Kendall, increase, but this stems from President of the Mortgage the higher performance of Guarantee Insurance Corpora- - Utah builders during the rec-tioession years of 1974 and 1975. Residential construction is A review of 1975 showed, to no one's surprise, that the not expected to improve conditions in Utah nificantly, if at all, in Utah the P.F.S. were less than rosy, but still during 1976, than the report said, significantly better While the economy appears national average. In 1975 Utah had a net increase of only to be on its way to recovery, 4,300 jobs, an unemployment some of the factors favoring rate of 9.2 percent, and an the home building industry in average personal income of 1975 have disappeared or are $5,850.00. Housing starts phasing out. Utahs 12,684 valued at mally large share of federal $526.3 million, with residen- - subsidies in 1975 will not be a tial starts up 27.7 percent over factor in 1976, nor will the five the previous year. percent tax credit. Real Landmark Realtors n. sig-econom- ic abnor-number- ed Financial Summary Patrick J. Vaailin Money is loosening up. Not only are the savings and loans getting in the mortgage business, but savings banks and life insurance companies are getting back into the ball game, too. The reason is that the bond calendar for the coming year looks rather depleted. Since savings banks and life insurance companies historically place a high percentage of their mortgage " money on g properties, the move will have a major impact on the apartment market. Apartment developers, who have remained out of action for most of the past two years, have spoken of a 10 percent constant (annual payment of interest plus principal) as the magic number that would draw them back into the market. That number may be attainable some time this year. A 9 V percent mortgage rate should be in effect by then. More lenders are now willing to extend loan terms to 30 years. That combination adds income-producin- up to a 9.9 constant. But even more than the downward trend in rates, lenders are demonstrating their new eagerness for mort- gage investment by willingness to tailor terms to individual loans. Some investors are willing to pay stiff premiums for prime quality income mortgages. They will accept rates nearly 34 percent below the market on projects secured by AAA tenant credit. Others will make loans 10 years beyond the "expiration of the major lease-- on almost unheard of hangout-owell-locat- ed n especially shopping centers. income growth is still lagging even though the rate of inflation has slowed and with it the cost of housing. Many families cannot afford to buy at current prices and 1976 will be. a catch-u- p year for many potential home buyers, according to the report. The second half of 1976 should see an increase in the rate of home construction and the five-yeinterval, 1976-198- 0 should show an increase in total housing production in the 10 to 12 percent range over the 1971-197- 5 period. continued on page 12b ar I |
