30 Unit Condo Complex Destroyed By Fire

2325 Quincy burned yesterday and is a total loss. The building was an example of high density construction and zoning from the 1970's.


It is rumored that the fire was caused by one of the tenants having a BBQ in the hallway. Whoops!

Photos courtesy KSL News.

Ogden Exhales: Helena Hotel For Sale

The highly contankerous spit-and-vinegar owner of the Helena Hotel has put his 25th Street property up for sale. The owner made headlines this year by posting sexual expletives in the windows of this property on 25th Street. He also roused local real estate investors in May by failing to pay 5 years worth of property taxes until the day before the county tax sale.

Lets keep our fingers crossed that a worthy suitor will pick up this gem and make it shine.

Banks Shoot Self in Foot, Investors Drool

The other day I pulled up the MLS and found a home for sale for $29,900. It had a new kitchen and new bathroom, it just needed paint and flooring and a few windows. I was literally shocked to see a price point like that. Well yesterday it happened again and yet again today.

These are all bank owned or REO property. Why are banks giving away these homes? Well the answer is tighter lending practices by these same banks.

Home prices are made up of two components: Credit and Cash. Banks give you credit and you earn and save cash. The combination of the two determines what you are able and willing to pay for a home. Over the last 10 years banks gave too much credit to people who had no cash. Now banks are not giving credit to most people, even if they do have lots of cash. Ironically, bank owned homes, the ones in need of repair and TLC, must be bought with cash in most cases. Since most people today don't have gobs of cash laying around, prices appear to be plummeting for REO property. Hence today's chart:


The moving average in this scatter chart shows the price decline since 2008. Wholesale property in downtown Ogden needs to be purchased for below $50 to begin to make sense. During the boom in 2007, price points surged above that benchmark. The subsequent lack of financing has now caused a significant correction in wholesale REO pricing.

This is an awesome opportunity for investors. The old a maxim "Buy Low, Sell High" is now possible during this market phase. I plan on taking full advantage of it.

DOM: Welcome to a Buyer's Market

I ran the days-on-market for Davis and Weber counties today. It's been several months since I last updated these charts.

The charts show days-on-market for each month in each county. You will notice there is a lot of noise from month to month. To help read the chart better, I inserted a 12 month moving average trend-line.


The bottom line is that we have shifted rapidly to a buyer's market. However, the curves seem to be flattening out which may indicated that the transition from seller's to buyer's market may be over. We may fester in this market mode for some time (likely years) before we see a decrease in DOM and a shift back to a seller's market.

For those interested in fixing and reselling property, this means that buying at "wholesale" prices is very important. Also, terms on financing will be paramount. High interest hard-money terms may eat you alive in this marketplace if you don't buy right.

For everyone else, it means that patience is a virtue and expect the market to take three to four months to sell your home (pristinely clean, well kept, and showable) at a "retail" price.

Ogden Rising: Ben Lomond Hotel Restoration

The Standard Examiner reports this morning that the Ben Lomond Hotel has been recently repossessed by the lender after the previous owners defaulted on their loan. Great news! Fortunately for Ogden, the lender is a private party with a penchant for restoring historic landmarks. The new owners are at work restoring the property now. I look forward to seeing the finished product. It will be yet another economic boost to the city when it is done.

WHOA! Davis Sales UP 6%

June stats are finally in and we are in for a pleasant surprise. For the first time in since September 2008, Davis County is reporting sales GROWTH of 6% year over year. This is great news.

It is even more significant when you figure that September 2007 was a market-shock month that made September 2008 artificially look like "growth" when compared to it. If we go back in the books, the last time we had natural growth was February 2007...almost 2.5 years ago.

The question remains whether this is a one time event or a trend. If July and August numbers hold, it will likely signal the market hitting an equilibrium point rather than the decline we have experienced over the last several years. This will be a refreshing change of direction...even if it is sideways. Its alot easier build your business on a steady floor than when you are in freefall.

Notably, Weber county narrowed its YoY decline quite a bit at being down only 9% in June as compared to 21% is May.

Here are the charts:

Vacation Perspectives

Vacations are great for sharpening the proverbial saw. Our trip this summer took us to southern Utah.

I just wanted to share a few photo highlights from the trip:


The Grand Canyon is an amazing place. Pictures don't even do the place justice. Our visit was brief but definitely worthwhile. Perceptions of distance and proportion are completely distorted
by the landscape. The next picture below is of my wife and I. The wind took my hat and gave it to the canyon. The other place we visited was Zions Park. This place has a magical feel to it. We explored the Kolob Reservoir Rd route which takes you down a very untraveled back road into the park. The Wildcat Canyon Trail is where we took this photo of the kids and I.



Here is another photo from that trail.


Finally, a great shot of our van in the midst of the park.


We plan on exploring these places more. If you ever need to clear your head and experience something surreal, these are the places to go.

Ghost Town: Grafton, Utah

The family and I are currently in St. George. I write this as I cower from the heat inside my nicely air conditioned condominium. Perhaps we will visit St. George in January next time.

We have been exploring all the lesser known nooks and crannies of the Zions Park area. With the kids in tow, the idea was to avoid paying fees and also avoid the crowds. One of our stops today was an old ghost town at the entrance to Zions Park called Grafton.

To visit Grafton, take S.R. 9 toward Zions Park. When you get to Rockville, take the only right turn in town. It will take you over a historic one-lane bridge from 1924.

Follow the signs.


Grafton was a Mormon colony founded in 1859. The idea was to grow cotton on the banks of the Virgin River. However, the land available was so small that everyone reverted to subsistence farming just to survive.


The towns folks barely survived year to year on the crops they grew. This picture above is of a church dating back to the 1860's. Upon closer inspection, you can see that this is an adobe building. You can actually see the twigs and hay in the brick.

There are a few homes still left in Ogden that are made this same way!


One of the fascinating places at the site was the cemetary. The cemetary has been restored to a degree and the tombstones preserved. There is a roster at the site that tells the cause of death of those resting there. Diptheria, indian attack, and accidents were the major contributors. I didn't see any "causes related to old age" on the list there.


Its interesting to note that Ogden started out much in this same way that Grafton started. However, it was blessed with more land and more water to keep it going. If we rewind the clock back to 1860, Ogden was just another pioneer town with an agrarian economy. Fortunately, geography handed Ogden a windfall when the railroad came. Grafton has not been so fortunate, geography has instead been a scourge. The town was officially abandoned in 1945.

Photo of The Day: Professional Schmofessional

I was browsing the MLS today looking at homes and I stumbled into this Weber County agent's profile:

(Note: Name and contact information obscured to protect his superhero identity)
I think this agent confused his Facebook page with that of his work. Anyone want to buy a home from this guy?

SB 81: Illegal Immigrant Exodus Blesses Ogden

Utah's anti-illegal immigration legislation known as SB81 goes into law today. Its a belated victory for the voting public who strongly endorses legal immigration despite the squeamish behavior of their elected officials.

I won't digress into a political rant here however. Lets talk about the real estate implications of this bill.

The first factor to consider is that this law will be unequally enforced across the state. Just as water seeks the path of least resistance, so will illegal immigrants seek this same path. If law enforcement is tougher (or just has the reputation for being tougher) in one community over another, illegal immigrants will tend to leave that community and move to the other. Why risk deportation when you can move a few municipalities down the road?

I am proud to say that Ogden Police Chief Jon Greiner has declared his men will fully enforce this law. As we all have seen in the news, Salt Lake City PD has advertised to the world that it will NOT be enforceing this law. Salt Lake City is now the path of least resistance. The net result of this will be a net flow of illegal immigrants from Ogden to Salt Lake City.

So what does all this mean to us? How will life change now that this bill is law?

The law basically does the following things:
1. Makes it tougher for landlords to rent to illegal immigrants.
2. Makes it tougher for employers to employ illegal immigrants.
3. Allows law enforcement to deport illegal immigrants that are arrested for crimes.

The bill will have a couple immediate negative effects on the Ogden Community due to a decrease in population. A portion (undetermined at this point) of the illegal immigrant population will move out of the area. This will put downward pressure on rents as there will be less demand for housing. It will also affect commerce as there will be fewer people to purchase goods and services in the community.

However, there will be several long term benefits to this bill. In the long run, property values and rents will increase. This is due to the substitution that occurs when illegal immigrants are replaced with higher income individuals. Property values and rents are correlated to the income of the people that inhabit them. Ever wonder why a Victorian in the Avenues of Salt Lake City can sell for $600,000 while a similar one in Ogden sells for $300,000? The answer is income. If the people that lived in the Avenues all moved to Ogden, pretty soon the prices in Ogden would be the same as were in the Avenues.

I am not suggesting that prices in Ogden are going to explode, rather, they will see an initial bump as the ultra-low income illegal immigrants are replaced by legitimate immigrant low income folks. Also, with fewer laborers available, wages will rise for the remaining folks that are here. Higher wages translates into higher property values as people have more to spend on housing.

Property values will also increase as the externalities associated with illegal immigrants are expunged from the neighborhoods. Issues like sanitation, over-crowding, parking, crime, and other factors will decrease, making neighborhoods more attractive, and thus increasing value.

What will be interesting to watch is how Salt Lake City absorbs Ogden's (and everyone else's) illegal immigrant population. The good things I presented here as happening to Ogden will be the exact opposite for Salt Lake City. Look for significant changes in our capitol city due to their non-enforcement policy and "save haven" reputation.

So, the demographic shifts that are about to begin will have a lasting and positive impact on the quality of life in Ogden. Lets support our local police in doing their jobs. They deserve it.