NSL landslide likely to hurt real estate values, at least in the short-term

Posted at 7:09 PM, Aug 06, 2014
and last updated 2014-08-06 23:47:48-04

NORTH SALT LAKE -- Beautiful views, an easy commute, and brand-new homes for less than you’d pay for a fixer-upper in the Avenues. That’s been the allure that has turned the slopes to the south and east of North Salt Lake into a bedroom community for upper and middle-income professionals working in Salt Lake city.

Add to that unstable hillsides, and you create problems that extend beyond the immediate impact on the homes evacuated or destroyed by the slide.

“I know obviously my property value has just plummeted,” said Michael Holley as he looked at the damage to the tennis club across the street from his house.

Holley lives in the Eagle Ridge area of North Salt Lake, where a landslide destroyed a home Tuesday and looked poised to do the same to others.

While the land has not moved since then, the fear remains, and fear is bad for sales.

“If someone's going to sell in that area it's gonna be a challenge,” said Don Zimmerman, Principal Broker with Realty Path, a company that has sold homes in the area.

“I was talking with a couple of my realtors, and they were saying, ‘Don, they are going to have to discount those homes by 40 percent,’” Zimmerman said.

But Zimmerman disagrees with the initial pessimism he heard from his realtors.

“I don't think it would be that much," he said. "There are still going to be people who will buy those homes up there, but they'll be looking to get a deal."

Real estate information aggregator Zillow shows homes for sale in the immediate vicinity of the slide asking between $399,000 and $750,000.

Zimmerman suggests those sales may be difficult in the short run, but if the developer and the city can shore up the hillside, prices are likely to bounce back.

For buyers who love views enough to risk a hillside home, he suggests getting thorough structural inspections and spending extra for the right insurance.