Utah Real Estate - 1st Quarter Flat
The numbers are in for Northern Utah real estate and they’re not pretty. Though prices have remained essentially flat, the number of transactions has decreased significantly. Much of that has to do with the tightening of mortgage loan standards.
In Salt Lake County home prices rose less than 1%, but sales activity dropped 42.2%. Davis County also saw flat prices while activity dropped 26.6%. Tooele County saw prices drop 6.3% with a sizable drop in activity. Utah County saw declines on both fronts.
The Salt Lake Realtor Board President said -
Jillinda Bowers, president of the Salt Lake Board of Realtors, said she remains bullish about the market despite the drop in sales and softening of prices.
“People shouldn’t be fearful. You have motivated sellers, and interest rates are low. It’s a great time to buy.”
I am not so bullish right now. I’ve personally seen several instances of mortgage fraud evident in Draper and West Jordan that are wiping out entire developments. These homes are becoming REO and will negatively impact their neighborhoods for at least the next two years. Opportunity does exist for qualified buyers because of interest rates. Buyers shouldn’t be fearful, but they should be wary.
It’s interesting seeing the breakdown by zip code. First quarter in Utah is typically the worst, so I’m not placing any merit in determining a trend from these numbers, but some weaknesses are emerging. 84102, downtown, suffered the biggest price drop at 30.6%. I suspect this is due to the rise of commercial vacancies and the reconstruction of the downtown malls. On the other hand, 84123, Murray-Taylorsville, saw the biggest individual gain at 11.5% because of the opening of the IMC Hospital last October.
Clearly the credit crunch is affecting Utah home purchases. Affordable housing will always be competitive as 84104’s gain of 11% can attest to. The bargains in the next couple years are going to be the luxury homes originally priced from $600k-$800k that will now be going for half that…particularly those on the edge of town in new developments.