Utah’s Home Sales Down, Prices Still Up
Two recent real estate reports show Utah’s real estate market is considerably weaker than a year ago, but home prices continue to appreciate. A report out yesterday on April’s home sales in Salt Lake show a volume decline of 33%, but a price increase of 2%. This is reflective of other areas of the country that showed a decline ahead of us.
The Salt Lake Board of Realtors is optimistic about these numbers:
But Realtor officials said Tuesday they believe that any downturn here will be comparably shallow and short-lived.
Board president Jillinda Bowers said April was the third consecutive month in which home sales increased in the county. Last year, sales started to slip in the summer, with January’s total of 634 an eight-year low for monthly sales. April’s total of 972 units sold is up from 934 in March and 746 in February.
“It appears to be a trend” of increasing sales, Bowers said.
I disagree. Utah’s housing market is having a downturn and will continue to do so for probably a year and a half. Looking at month over month sales is a poor indicator of progress. However, demand for starter homes and low cost homes will continue to increase with commensurate price increases. Homes above $300k in the valley will have problems selling. Price points above $600,000 will see the greatest price drops, especially next year.
A report out today shows a bigger picture of Utah real estate.
Utah is No. 2 among states in home-price appreciation with a 5.6 percent increase, relinquishing the top spot to Wyoming, which posted a 6.3 percent gain, according to a report released today.
Montana rounded out the top 3 with a 4.9 percent increase, according to the House Price Index report by the Office of Federal Housing Enterprise Oversight.
The OFHEO numbers reflect refinances as well as purchases and that’s why they show bigger increases than the Board of Realtors that only reflect sales of existing homes. Realtor numbers showed less than 1% appreciation in the first quarter.
I believe consumer sentiment is returning to real estate, but not in Utah. We’re going to be experiencing similar circumstances as California and Arizona have for the past year. It will be tough going for sellers of higher priced properties, but I don’t expect a housing crash.