March 13, 2013

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Davis and Weber Counties

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Davis and Weber Counties

March 13, 2013

And locally, with the product here, we’re going to see a real paradigm shift as well. Many business owners reside in Northern Utah but run their companies outside of Northern Utah because, historically, they felt like they either had to or there wasn’t the product here available for them to be able to locate their businesses here. And we have tens of thousands of people leaving these two counties every day going to work in other counties. It’s been recognized nationally as a great place to be, but sometimes locally there’s still misperception.

DOWNS: Davis County had over 5,000 new jobs, the highest in the state. And coupled with that, we’ve been trying to provide opportunities for people to come and work in our county. And that’s growing.

McCALL: We have seen some real positive growth in housing. Housing starts are up and we’ve seen good growth as a result of the jobs in the area.

But I would throw out this word of caution, and that is nationally the unemployment numbers are not really reflective of what they truly are. We’re looking at 7.3 as reported on the national scale. It’s really 14.9 when you look at the cumulative number of jobs. Unless we turn that around, this housing bubble that we are in is really only good for about 18 months. If the housing and the job starts don’t stay up, you’re going to see numbers and values go down again.

I’ve seen property values actually start to increase a little bit. We’re not back to where they were before we took this housing dip. But overall, we’re in a very nice hiatus.

CARTER: It is important to point out that those who want to buy in south Davis County—from North Salt Lake to Farmington—the reality is that they may be more likely to move into Salt Lake County because of the financial limitations in these specific counties—FHA loan limits, jumbo loan limits, conventional loan limits. I can pick up and move to Draper and spend almost $200,000 more for the same down payment. That’s the reality of the situation.

LOSEE: As a community banker—I’ve got 15 branches in Davis and Weber counties—I see progress. I see buildings going up. I see aggressive mayors. I see creative financing going on to try to get things stimulated.

But it comes back to the idea of perception, of a positive attitude. The comment I heard the other day from an economist on NPR was, “The economy is growing, but at an anemic rate.” How motivating is that? Is it growing or is it not growing? An “anemic rate” tells me let’s don’t get involved. Let’s don’t build.

At our company, we’re waiting for people to hire, to buy new businesses, to build new buildings. The money’s out there. Everybody’s ready to lend. I just like hearing, in this group at least, the fact that we think things are moving along a little bit better than at an “anemic rate.”

How about commercial real estate?

FULLERTON: Things are looking up, but don’t misunderstand that when we look at businesses’ financial statements, they’re bruised. They’ve taken a beating. And those people that have survived, I won’t say they’re thriving. They’re stable. They’re not adding employment. They’re not building buildings.

The flip side of that is there is a lot of cash on the sidelines. Rates are good in the commercial and residential sectors. But qualification is still an issue, and it is going to be less leverage and more equity in all deals, as opposed to the flip side where we had lots of leverage, too much leverage. We are optimistic on Utah; we are quite cautious on the U.S. and how it impacts Utah.

LINDSEY: Utah is poised favorably for a very positive business climate here. I’m seeing a lot of investors from out of state looking into Utah for investment opportunities because they see that. Like was mentioned, there is a lot of cash on the sidelines that’s starting to loosen up a little bit. We’re seeing a lot of the deals that have been bottom-feeder-type deals being absorbed and taken off the market. So we’re starting to see a little bit better deal flow as far as investment properties this past year and going forward.

We’re also seeing, north of here all the way into Cache County, some new development of commercial property, which we haven’t seen for three, four years.

SULSER: There are a handful of cities in Davis County that have already exceeded the high-water mark for residential permits. For example, Layton City had 270 in the year 2007 when the high-water mark was being hit. They exceeded that by November of last year. It’s occurring, yet it’s got to be sustained. But if we can’t get the jobs, it will be short-lived.

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