New study reveals which Utah cities & counties
The pandemic has supercharged Utah’s housing market, driven by historically-low interest rates and low unemployment rates. Utah's housing market has been ranked as the nation’s #1 housing market for the strongest pace of job growth, along with low unemployment, low mortgage rates, few mortgage delinquencies, and low state & local taxes, according to Bankrate.com. Continued, historically-low mortgage rates, and a solid recovery from the pandemic, predict that the Utah real estate market could set another record in 2021. The same can be said about the Salt Lake County real estate market.
Why is Utah's housing market so hot? Rapid population growth and job growth are the two most important drivers of housing demand in Utah right now. According to local real estate agents, there are not enough single-family homes to meet the rising housing demand. A balanced market has roughly a six-month supply of houses, which means that if we stopped listing new properties, we'd still have about six months of inventory, before we ran out. Right now, Utah is down to about four weeks of housing inventory.
In April 2021, the year-over-year growth of the Case-Shiller Index, the premier metric for housing prices, eclipsed 14.5% for the first time in its history.
To determine the real estate markets expected to grow the most in the next year, researchers at Porch analyzed data from Zillow, Redfin, and the U.S. Census Bureau. Its researchers calculated the forecast one-year change in home price, previous one-year change in home price, sale-to-list price ratio, and the home price-to-income ratio. To improve relevance, only metropolitan areas with at least 100,000 residents were included.
|CLICK HERE TO VIEW THE FULL 2021 HOUSING FORECAST|
September 28, 2020
SALT LAKE CITY — In the wake of some record-setting heatwaves this past summer, the Salt Lake Valley’s housing market was also mirroring that blazing-hot streak.
The demand for new housing stock has risen to historic levels.
A big upward trend in the national housing market has continued based on the latest new home sales data from the U.S. Census Bureau. The figures show new single-family home sales up 43.2% year-over-year in September.
A report from Robert Charles Lesser and Company, a data analytics and strategic planning firm for the real estate industry, states increased market demand is being driven by low interest rates for homebuyers, demographic shifts, along with changing consumer attitudes about where they choose to reside in the era of the new coronavirus.
The report notes that given the fact there is just a 3.3-month supply of new homes available, the current pace of robust sales may not sustainable in the long term.
Considering various factors, including the current sales pace, rising lumber costs and availability of suitable land, there are strong indications that demand for new housing will remain high, However, builders may have trouble keeping up, one Utah observer said.
Jaren Davis, CEO of the Salt Lake Home Builders Association, said demand for new housing has been overwhelming producers’ capacity to provide units, particularly as more and more people choose to make the Beehive State their home.
While the influx of new residents is a major driver in the demand for housing, he said keeping up the supply is also an ongoing challenge.
“The existing house inventory is readily available and the transaction occurs (immediately),” he said. “But in new construction, there isn’t a lot of spec housing out there, meaning the builders built something waiting for the buyers to come in. So what happens when the consumer comes into our assets, they actually agree to a longer term buildout. They’re looking at a plat map, identifying a lot that they want and then getting on a schedule for the construction and that oftentimes would take as long as six months.”
He added that the build-out phases could also be long if the home is larger or has specific features that require more time to construct. The robust demand has also put more pressure on builders to produce a greater volume at a high rate.
The high demand is straining the existing home market as well. The Salt Lake Board of Realtors reported that sales in Salt Lake County for July were the highest on record in the history of the Multiple Listing Service — more than 2,100 sales. It was the first time sales eclipsed the 2,000 mark. Sales last month were also up slightly, the report states.
Meanwhile, Davis noted that the construction industry was designated as an essential service during the COVID-19 pandemic, which has allowed builders to continue producing much needed housing stock.
“You still had that mindset for the social distancing. In our industry, we naturally social distance, the framers aren’t standing next to the plumbers — they’re coming in at different times and they’re standing in different parts of the home,” Davis explained. “We absorbed that fallout from those first months (of the pandemic), had some slowdown in the construction and they’re now back up to full steam.”
He said even at full capacity, the industry still cannot keep up with the demand from prospective buyers.
“If we could build enough inventory for the demand, we would probably be twice as busy,” he said. “Existing housing follows new construction. If there isn’t enough inventory in new construction, prices go up. Because of our lack of ability to meet that demand, prices are pushed upward because there is a shortage of inventory.”
He said those rising prices are putting tremendous pressure on affordability across the Wasatch Front.
Analysts contend the high demand has been exacerbated by the lack of existing home inventory for sale. Dejan Eskic, senior research associate at the University of Utah’s Kem Gardner Institute, said the pandemic prompted many potential sellers out of the market due to fears raised during the initial outbreak in the spring.
“We’ve seen a lot of existing for-sale inventory pull back, so we’re about 52% or so behind where we are usually with existing sales inventory this time of year and throughout the summer,” he said, “That’s created a kind of bottleneck. You have this pent up demand who want to buy, but they have nowhere to go.
“You have the global health pandemic issues as well, people are not comfortable having people walk into their homes,” Eskic said. “They don’t want to move in a pandemic, so that’s preventing them from putting their house on the market as well. You’re seeing this in our market and across the nation, we’re really short on existing home sales.”
Regarding affordability, he said Utah faces the daunting prospect of becoming like California is today where many residents cannot afford to rent or buy based on their typical household wages.
“Really, it comes down to income. Between 2013 and 2018 — that five-year period, income (in Utah) has gone up 18% while housing prices have gone up over 65%,” Eskic said. “In comparison, if we go back to this May and April when this whole thing started, the median price of a single-family home in the state of Utah was about $365,000, now it’s $399,000. That’s about 9% in just five to six months.”
He said civic leaders need to work on some possible solutions or risk the situation worsening.
UTAH RANKS NO. 1 FOR BEST ECONOMY
Utah has the best economy of all states, according to USA Today. “At a time when COVID-19 has sent unemployment soaring into the double digits across much of the country, Utah's monthly jobless rate stands at 5.1 percent, less than half of the 11.1 percent national unemployment rate for June,” the article stated. “Even before the coronavirus hit American shores, economic conditions in Utah were far stronger than they were in most of the country."
Q2 STATS SHOW INCREASED VALUE &
June 22, 2020
SALT LAKE CITY — Sales of existing homes in Utah tumbled in May, but analysts and real estate agents said the market is experiencing strong activity and price increases as summer begins.
“We didn’t slow down, really,” said Christy Vail, with the Utah Association of Realtors. “There might have been two or three weeks where it was a little quiet, but overall, I think people are very positive and forward-thinking about home buying.”
Vail said Utah is faring better than other states and that demand is high right now, partly due to new buyers entering the market because of the low mortgage rates.
“We definitely are seeing multiple offers — that has not changed,” she said.
The Utah Association of Realtors reports that the median sales price for existing homes in Utah is up 4% this year. Nationally, the price increase is 2.3%.
Researchers at the University of Utah’s Kem C. Gardner Policy Institute said the state’s ongoing housing shortage is putting upward pressure on prices.
“Prices aren’t going down,” said research analyst Dejan Eskic. “As a matter of fact, they are still up over last year when we compare month-to-month.”
That housing shortage could get worse, Eskic warned, since the pandemic caused a slowdown in construction during April and May.
“We’re forecasting about a 10% to 12% decline in housing construction-related activity for the year,” he said.
Sales of existing homes in Utah dropped 22% in May when compared to the same month last year, according to preliminary data for the Utah Association of Realtors. Nationally, year-over-year, home sales dropped 26.6% in May.
The COVID-19 pandemic hit just as the busy, springtime home-buying season would have started, possibly delaying completed transactions until now. In fact, the association of realtors said the number of homes currently under purchase contracts is outpacing last year by about 25%.
Some of the summer demand could also be the result of Utah residents being more aware of their housing situations after spending so much time inside their current home because of the pandemic.
“I think people are a little bit more cognizant of their living space and their needs,” Vail said. “And two, I think there are many thoughts of maybe downsizing a little bit.”
April 29, 2020
Contract signings dropped in March as many housing markets paused as the coronavirus outbreak spread across the country.
The National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings, dropped 20.8% in March compared to February. All four major regions of the U.S. saw a drop in contract activity last month.
Contract signings are down 16.3% compared to a year ago.
“The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listing and new contracts,” says Lawrence Yun, NAR’s chief economist. “As consumers become more accustomed to social distancing protocols, and with the economy slowly and safely reopening, listings and buying activity will resume, especially given the record low mortgage rates.”
Yun acknowledges the typical spring buying season will be missed this year due to the pandemic. Further, a “bounce back later in the year” will likely be insufficient to make up for the loss of sales in the second quarter, he adds. Home sales are projected to decline 14% for the year.
Social distancing protocols due to the pandemic have caused the real estate industry to quickly adapt their businesses. Home buyers are still finding ways to proceed. Fifty-eight percent of real estate professionals report that buyers are using virtual tours, and 43% report buyers are taking advantage of e-closings, according to an NAR Flash Survey conducted of real estate professionals between April 19 and 20.
Also, home prices are staying firm. “Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well,” Yun says. “In fact, due to the ongoing housing shortage, home prices are likely to squeeze out a gain in 2020 to a new record high.”
Yun projects the national median home price to increase 1.3% for 2020. However, he cautions there will be many local market variations. Also, the upper end of the market will likely face a reduction in home prices.
The average 30-year mortgage hit an all-time low of 3.29% this week,
according to data from Freddie Mac
On the heels of a roller-coaster stock market and emergency rate cut from the U.S. Federal Reserve as fears about the spread of coronavirus (COVID-19) impact the U.S., mortgage rates hit a historic low this week. The average 30-year fixed-rate mortgage plummeted to 3.29 percent, an all-time low, according to Freddie Mac.
“The average 30-year fixed-rate mortgage hit a record 3.29 percent this week, the lowest level in its nearly 50-year history,” Freddie Mac Chief Economist Sam Khater said in a statement. “Meanwhile, mortgage applications increased 10 percent last week from one year ago and show no signs of slowing down.”
“Given these strong indicators in rates and sales, as well as recent increases in new construction, it’s clear the housing market continues to be a positive force for the broader economy.”
Last week, the 30-year fixed-rate mortgage averaged 3.45 percent and at this time last year, it averaged 4.41 percent. The 15-year fixed-rate mortgage averaged 2.79 percent, down from 3.83 percent at this time last year. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.18 percent, down 3.87 percent at this time last year.
Ruben Gonzalez, the chief economist at Keller Williams, said the recent downward trend in the 10-year Treasury yield, in response to coronavirus concerns, has been pointing to the potential of record-low mortgage rates for some time.
“So far, the perceived risk in the real estate market appears to be low based on the path of the spread between 30-year mortgage rates and the 10-year Treasury, though it has trended higher over the previous two weeks,” Gonzalez said.
Those same forces driving rates down could eventually drive up the concerns of the risk to the overall economic climate of the country, which in turn could impact the housing market. But in the near term, lower rates should provide a boost in demand, even as inventory remains low, Gonzalez said.
“While buyers may already be somewhat wary due to the potential of a larger outbreak, most cities so far are not directly impacted by COVID-19,” Gonzalez said. “We are certainly keeping an eye on how the situation is developing and evaluating what kind of logistical challenges may develop in our industry.”
In New York City specifically, agents told Inman that they’re seeing prospective homeowners incentivized to buy right now.
“Buyers, even first time purchasers, seem more motivated rather than deterred due in part to the effect the outbreak is having on the stock markets,” Kristen Jock, an agent with Compass, said. “With talk of rates dropping more, it is actually incentivizing investment in homeownership.”
UTAH HOME SALES HIT NEW HEIGHTS IN 2019;
UTAH IS NO. 4 IN THE NATION IN HOUSE-PRICE GAINS
Utah home prices increased at the fourth-highest rate of all states in the 12-month period ending Sept. 30, according to FHFA. In Utah, prices during the period increased 7.84 percent. At 11.55 percent, Idaho saw the biggest home-price gains in the nation. Illinois ranked last, with home prices inching up 1.89 percent. Nationally, home prices increased 4.94 percent.
Copyright Salt Lake Board of Realtors®. December 16, 2019.
MEDIAN SINGLE-FAMILY HOME PRICE SURPASSES $380,000
Salt Lake County home prices climbed to an all-time high in the third quarter, according to the Salt Lake Board of Realtors®. The median single-family home price in the July-through-September period reached $381,500. That's up 7.5 percent compared to a median price of $355,000 in last year’s third quarter. Just three years ago, the median single-family home price reached $300,000, which was then an all-time high price. The previous peak home price was in the third quarter of 2007, when home prices topped $256,000 (or $298,085 in inflation-adjusted dollars). Home prices increased across all Wasatch Front counties including: Davis, up 6.2 percent; Tooele, up 2.6 percent; Utah, up 4.4 percent; and Weber, up 10.3 percent. Sales of single-family homes in Salt Lake County were flat (up 0.7 percent) in the third quarter year-over-year. Davis County saw sales increase 9.8 percent. Sales in Tooele County were up 4.7 percent. Utah County sales were up 11.8 percent. Sales in Weber County were up 12.1 percent. In the third quarter, the typical Salt Lake home was on the market 37 days before it sold – six days longer than the average time for a home to sell during the third quarter of 2018.
Copyright Salt Lake Board of Realtors®. November 18, 2019.
Utah had the second highest house-price appreciation of all states in the second quarter year-over-year, according to a new report by the Federal Housing Finance Agency. In the 12 months ended June 30, house prices in the Beehive State increased 7.73 percent. Only Idaho showed greater house appreciation over the same period. Rounding out the top five states were Tennessee, Georgia and Arizona. At 1.21 percent, Delaware had the lowest appreciation. The index is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.
Copyright September 2019. Salt Lake Board of Realtors®.
It’s been another amazing summer for real estate along the Wasatch Front! Lately, there has been some talk about changes in the future, but according to the data below, the housing market in Utah has been steady and solid.
Utah typically follows behind other major markets like parts of California, Las Vegas and Phoenix. The one huge advantage we have is our job market and stable population. Look at the number of new listings vs the number of homes under contract.
In Salt Lake, Utah and Davis Counties, there are still more homes going under contract than are being listed. This signifies a Seller's Market. You can also see the number of "Solds" vs "Actives". If you divide the "Actives" by the "Solds", it will give you the Absorption Rate. This is the number of months it would take for all current listings to sell, if no new properties were listed on the Market.
Salt Lake County is currently at a little over 1.5 months worth of inventory; Utah County is slightly over 2 months; Davis County is just above 1.3 months (respectively). All three counties are very much Sellers' Markets. Most real estate professionals would say a "Flat Market" is usually around 4 months of inventory.
MAY HOUSING WATCH
More homes were sold in May compared to May 2018 in Salt Lake County and Davis counties, according to UtahRealEstate.com. In Salt Lake County, home sales were up 10 percent. The gains followed a strong showing in April. Previously, sales had been down in Salt Lake County for six consecutive months (October through March).
The price of homes continued to rise. In Salt Lake County, the median price of homes (all housing types) sold in May was $348,989, up 9 percent compared to the May 2018 median price. In Davis County, the median price increased 10 percent to $330,000.
Nationally, total existing-home sales were down 1.1 percent from a year ago (5.40 million in May 2018). The median existing-home price for all U.S. housing types in May was $277,700, up 4.8 percent from May 2018 ($265,100). May's price increase marks the 87th straight month of year-over-year gains.
Properties across the nation remained on the market for an average of 26 days in May, up from 24 days in April and equal to the 26 days in May of 2018. Fifty-three percent of homes sold in May were on the market for less than a month.
Realtor.com®'s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in May were Rochester, N.Y., Fort Wayne, Ind,; Lafayette-West Lafayette, Ind.; Boston-Cambridge-Newton, Mass,; and Midland, Texas.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.07 percent in May, down from 4.14 percent in April. The average commitment rate across all of 2018 was 4.54 percent.
First-time buyers were responsible for 32 percent of homes sales in May, unchanged from 32 percent the month prior, and up from 31 percent recorded in May 2018. NAR's 2018 Profile of Home Buyers and Sellers - released in late 2018 - revealed that the annual share of first-time buyers was 33 percent.
All-cash sales accounted for 19 percent of transactions in May, down from April a year ago (20 percent and 21 percent, respectively). Individual investors, who account for many cash sales, purchased 13 percent of homes in May, down from 16 percent in April, and from 14 percent a year ago.
Distressed sales - foreclosures or short sales - represented 2 percent of sales in May, down from 3 percent in April, and from 3 percent in May 2018. Less than 1 percent of May 2019 sales were short sales.
Source: Salt Lake Realtor Magazine®. June 2019.
Salt Lake City's Home Prices Keep Climbing
Salt Lake home prices have increased nearly 47 percent over the past five years, and more than 371 percent since 1991, according to a recent report by the Federal Housing Finance Agency. Nationwide, home prices have increased 32.81 percent over the same five-year period. Over the past year, home prices across Utah increased 9.80 percent, the third highest house-price appreciation of all states, the report said The FHFA House Price Index (HPI) is a broad measure of the movement of single-family house prices. The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties.
BIG PRICE GAINS IN UTAH HOUSING MARKETS:
The housing markets of Salt Lake City, Provo, Ogden and other Northern Utah cities outpaced the nation in 2018, in terms of home-price gains. They’re expected to do more of the same through 2019 and into 2020.
Last week, we reported that Provo, Utah is one of the cities where Millennials are buying homes in large numbers. This and other factors, has led to big home-price gains in the Provo housing market.
But Provo isn’t the only city in Northern Utah with a hot housing market. Most of the cities in that region are outpacing the nation right now, in terms of year-over-year home price growth.
Real estate markets in Salt Lake City, Ogden and Orem are also experiencing above-average price gains, as of early spring 2019.
Utah Home Prices Outpace the Nation
Home prices in Utah rose faster than the national average in 2018, and during the first part of 2019. According to Zillow®, the median home value for the state of Utah rose by 14% over the past year (as of March 2019). The nationwide median rose by 7.2% during that same 12-month period.
The company’s research team predicted that Utah’s median home value would rise by another 8.5% over the next 12 months, stretching into spring 2020.
Even bigger gains were recorded within the housing markets of Ogden, Orem, Provo and Salt Lake City. In those real estate markets, home prices rose rapidly over the past year or so (see below).
Looking forward, the latest housing forecasts suggest that these cities will continue to outpace the nation in 2020 — at least in terms of annual home-price gains.
Strong Housing Forecasts for Salt Lake City, Ogden, Provo
According to the latest data, home prices in the major cities of Northern Utah have been rising at a much faster pace, than the nation as a whole. Additionally, there have been strong home-price forecasts for the housing markets in Salt Lake City, Provo, Ogden and Orem.
We can see this stark difference by looking at median home values over the past year. Consider the difference:
• The median home price for the U.S. rose by around 7% over the past 12 months.
• In contrast, the median home value (in all four Utah cities listed above), rose by at least 15% over the past year, according to Zillow.
Ogden, Utah led the charge with a whopping 20% gain in median house prices over the past year. While real estate appreciation seems to be slowing in that market, Ogden could have another year of double-digit price growth in 2019.
Here is Zillow’s forecast for the Ogden housing market: “Ogden home values have gone up 20.0% over the past year and Zillow predicts they will rise 12.5% within the next year.” They also labeled this real estate market as being “hot” in spring 2019, based on the average time on market, frequency of price cuts, and other factors.
The chart below, provided by Zillow on April 1, 2019, shows the stunning rise of home prices in Ogden, Utah. It also shows the company’s forecast for this particular housing market, into the spring of 2020 (green shaded area).
Chart: Zillow’s home value index for Ogden, Utah.
The Northern Utah cities of Salt Lake City, Orem, Provo and Logan also recorded double-digit increases in their median home values over the past year.
Supply Falling Short of Demand in Some Areas
In most major cities across Utah, the inventory of homes for sale is still not enough to satisfy the demand from buyers. This puts upward pressure on home prices and leads to competitive conditions within these real estate markets.
Ogden, Utah is one of the more “extreme” examples of this supply-and-demand imbalance. As of February 2019, the Ogden housing market had about a 2.5-month supply of homes for sale. That’s well below the 5 to 6-month level that economists consider to be a balanced market.
Salt Lake City also had about a 2.5-month supply of homes for sale in February.
In these and other cities across Northern Utah, the real estate market tends to favor sellers over buyers - for now, at least. If more inventory becomes available over the coming months, it could tilt the scales.
Are Buyers Getting Priced Out of These Markets?
From a homeowner’s perspective, rising home values are a big win. An appreciating real estate market enables homeowners to build equity. But some home buyers will eventually be “priced out” of these real estate markets due to the above-average price gains of recent years.
Prospective first-time buyers, in particular, often struggle to keep up with rising home values. And with most housing market forecasts suggesting a continued rise in Utah house prices, the problem could worsen in 2020.
Already, we’ve seen a decline in sales across this region. That could be partly due to the big jump in prices (and a corresponding drop in demand).
A January 2019 article from The Salt Lake Tribune stated:
“Surging prices and limited supply pushed home sales on the Wasatch Front [which includes Ogden, Provo and Salt Lake City] to their lowest level in three years, with Utah’s urban counties seeing significant market slowdowns as 2018 ended.”
But there’s some good news for home buyers. Mortgage rates have plummeted over the past few months.
According to the weekly survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage loan dropped from 4.94% in mid-November of last year, to 4.06% during the week ending March 28, 2019.
Low mortgage rates could help offset the rising cost of homes in places like Salt Lake City, Ogden and Provo — at least for those home buyers who jump on them while they last.
Source: HomeBuyingInstitute.com. “Big Price Gains in Utah Housing Markets: Ogden, Salt Lake City & Provo.” Written by Brandon Cornett. April 1, 2019.
Disclaimer: This article includes home price trends and housing market forecasts for various Utah cities. That information was provided by third parties not associated with the publisher. Real estate forecasts and predictions are the equivalent of an educated guess and should be treated as such.
EXISTING HOME SALES REBOUND IN FEBRUARY
In February, existing home sales experienced their largest monthly gain in four years, according to the latest report from the National Association of Realtors.
Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, spiked 11.8% from January to a seasonally adjusted rate of 5.51 million in February, the highest monthly increase since December 2015. However, the report reveals sales are 1.8% below February 2018’s rate.
NAR Chief Economist Lawrence Yun said a powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound.
The median existing home price for all housing types increased to $249,500 rising 3.6% from last February’s rate of $240,800. This marks the 84th straight month of year-over-year gains.
Total housing available for sale increased from January, moving forward from 1.59 million existing homes on the market to 1.63 million in February. Notably, this is a 3.2% increase from last year’s total of 1.58 million.
“The housing market is poised for a rebound as existing-home sales soared in February after hitting an over three-year low last month,” Trulia Chief Economist Cheryl Young said. “With spring home buying season around the bend, sliding mortgage rates and moderating home prices will continue to boost demand and drive sales.”
Copyright, National Association of Realtors®. March, 2019.
SALT LAKE COUNTY HOME SALES FALL FOR FOURTH CONSECUTIVE MONTH
Salt Lake area homes sales (all housing types), fell in January to 898 units sold, a 17 percent drop compared to 1,077 units sold in January 2018. It was Salt Lake County's fourth consecutive month of falling home sales year-over-year.
In Davis County, there were 269 units sold in January, a 10 percent decline compared to the same month a year ago. It was the second consecutive month of falling sales for Davis County.
Meanwhile, the median price of homes sold in January continued to increase. In Salt Lake County, the median price in January increased to $320,375, an 8 percent rise compared to a median price of $296,500 in January 2018. In Davis County, the median home price hit $315,000, a 15 percent increase compared to median price of $275,000 a year earlier. Nationally, home sales (all housing types), were down 9 percent in January compared to January 2018, according to the National Association of Realtors®.
Lawrence Yun, NAR's chief economist, sad January home sales of 4.94 millions were the lowest since November 2015. However, Yun does not expect the numbers to decline further going forward. "Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months."
The U.S. median existing-home price for all housing types in January was $247,500, up 3 percent from January 2018 ($240,800). January's price increase marks the 83rd straight month of year-over-year gains.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.46 percent in January from 4.64 percent in December. The average commitment rate for all of 2018 was 4.54 percent.
Nationally, all-cash sales accounted for 23 percent of transactions in January, up from December and a year ago (22 percent in both cases). Individual investors, who account for many cash sales, purchased 16 percent of homes in January, up from 15 percent in December, but down from a year ago (17 percent).
Copyright, Salt Lake Board of Realtors®. February 2019.
THE REAL ESTATE MARKET IN YOUR ZIP CODE
Surging prices and limited supply pushed home sales on the Wasatch Front to their lowest level in three years, with Utah’s urban counties seeing significant market slowdowns as 2018 ended. Full pricing and sales data by ZIP code illuminate what is now an extended trend.
As prices and mortgage interest rates continued to rise, 6,781 single-family homes changed hands over the five-county area in the past three months, nearly 9 percent fewer than sold in fall 2017, according to new figures published Monday by the Salt Lake Board of Realtors.
All five Wasatch Front counties saw home sales decline for the fourth quarter of 2018, according to the latest data, ranging from 4 percent down in Weber County and 5 percent in Davis, to an 11 percent drop in rapidly growing Utah County and a sizable 14 percent decline in Tooele County. Sales for October, November and December fell 10 percent in Salt Lake County.
Prices, meanwhile, leapt over the same period. In Salt Lake County, the median home price stood at $350,000 at year’s end, fully $25,000 higher than it was in those same three months a year prior. Across the wider Wasatch Front, the median home price was at $334,000, 11 percent higher year over year.
Several experts said Monday the sustained trend of rising prices had combined with hikes in mortgage rates to force some first-time buyers out of the market. For the population center of Salt Lake County, the 2018 sales decline came after total homes sales for 2017 dipped about 1 percent below their levels for 2016, the county’s third highest year for sales on record.
“While new listings are on the rise, overall inventory levels are not keeping up with homebuyer demand,” Scott Robbins, president of the Salt Lake Board of Realtors and a Draper-based agent with Sotheby’s International Realty, said in a statement.
The new data also come as issues in Utah with housing affordability are claiming the attention of city officials, business leaders and state lawmakers. According to the board’s latest report, six ZIP codes along the Wasatch Front now have median home prices above $500,000:
• 84004; Alpine ($577,500)
• 84103; (spanning the Avenues), Salt Lake City ($562,580)
• 84020; Draper ($530,000)
• 84310; Eden ($529,200)
• 84108; East Bench ($521,125)
• 84117; Holladay ($519,500)
• 84664; Mapleton ($491,406)
• 84095; South Jordan ($488,800)
•84093; Sandy ($480,000)
•84317; Huntsville ($480,000)
Experts say that even though new homes are coming on line along the Wasatch Front, a combination of rising costs for undeveloped land, building materials, construction labor and other items continues to push up median housing prices.
And in further evidence of market tightening, the quarterly data released Monday also show a typical Wasatch Front home listed for sale was on the market for only 40 days before it sold, three days shorter than for the fourth quarter of 2017.
A representative for one of the region’s major lenders predicted that additional interest rate hikes by the Federal Reserve in 2019 could further depress buyers’ purchasing power and leave more Utahns struggling to afford a new mortgage, even as job and wage growth in Utah continue to drive home demand.
“Affordability has become an issue,” said Roger Jones, senior vice president and mortgage division manager for Zions Bank, who added that would-be first-time buyers and existing homeowners seeking to move up in the market were both being sidelined.
Jones predicted that some buyers would be drawn to mortgages with adjustable interest rates that locked in lower rates in the first years, as a hedge against the possibility of rate upticks through 2019 and beyond.
Many ZIP codes with the highest volume of fourth-quarter 2018 home sales nonetheless saw year-over-year declines. Data show sales were strongest in Clearfield, Farr West, Lehi, Herriman, Layton, Eagle Mountain, Kearns and Roy.
Of 36 ZIP codes within Salt Lake County, only nine saw home sales at the end of 2018 that exceeded sales for the same period a year before — all are areas on the Salt Lake Valley’s western and southern suburbs.
And of 21 ZIP codes in Utah County, only six had higher fourth-quarter sales in 2018 than the year before, centered on Lehi, Provo, Alpine and Mapleton.
The fourth-quarter picture for condominium sales, often an indicator of buyers seeking bargains, was mixed.
Prices for condos rose dramatically in all five Wasatch Front counties, ranging from 8.1 percent in Davis County to 17.8 percent in Weber County. But sales were flat or declined slightly in Weber, Utah and Salt Lake counties, leapt by a dramatic 36.8 percent in Tooele County and plunged by 23 percent in Davis County.
©Salt Lake Tribune. Story by Tony Semerad. January 29, 2019.
Home sales across the Wasatch Front in the fourth quarter dropped to a three-year low, according to the Salt Lake Board of Realtors®. In the final three months of 2018, there were 6,781 single-family homes sold across the five-county Wasatch Front area (Salt Lake, Davis, Utah, Tooele, and Weber counties), a 9 percent drop compared to 7,439 sales in the fourth quarter of 2017. In the fourth quarter of 2016 there were 7,181 sales. In Salt Lake County, total home sales (all housing types) for 2018 were the fourth best year on record. Only 2005, 2006 and 2016 had more sales.
Copyright, Salt Lake Board of Realtors®. January 2019.