The median selling price of existing homes in Salt Lake County is now down to $240,000, off 6 percent from the height of the overheated market two years ago before home sales began plunging.
Realtors say a report released Tuesday suggests the market and prices could be stabilizing, but some economists believe values could fall further before the market reaches bottom.
In the report by the Salt Lake Board of Realtors, 1,423 existing single-family homes in Salt Lake County changed hands in the first quarter, down 24 percent from the same January to March period last year. Yet the median sales price over the one-year period was down just under 1 percent.
Ryan Kirkham, president of the Salt Lake Board of Realtors, said historically low mortgage rates combined with federal and state home-buying incentives have generated enough demand that the market may be bottoming out, putting an end to further home-price declines.
A number of buyers are acting now. Steve and Sarah Brown put their home in Holladay on the market and are looking for a great deal, perhaps a property that has been foreclosed or a house sitting vacant. The couple likes the South Jordan and Riverton area.
The Browns have debated moving for some time. Why move now? "We would love to take advantage of mortgage rates while they're so low," said Steve Brown.
Nationally, the Standard & Poor's/Case-Shiller index of home prices in 20 major cities showed that while prices fell 18.6 percent in February compared with the same month in 2008, the decline slowed for the first time since January 2007. (January's drop was 19 percent.)
"There are so many deals and incentives right now, buyers are saying, 'I can't afford not to buy,' " Kirkham said. "My feeling is that we've probably already bottomed out. I've sold real estate for 16 years, and my sense is we're moving in a positive upward direction now."
In contrast, the economic forecasting firm Moody's Economy.com predicts that values in the Salt Lake metro area could fall another 10 percent or so before mid-2010, for a total market "correction" of about 20 percent.
Even though Economy.com expects a further erosion in home prices in the Salt Lake area, economist Gus Faucher said interest rates are so low that those who buy now may have the same mortgage payment, or even a lower one, than those who wait to buy at even lower prices next year.
That's because mortgage rates likely will start to rise later this year or in early 2010. Also, the federal incentive aimed at first-time buyers, in the form of an $8,000 tax credit, and a state incentive of $6,000 geared toward buyers of new homes, aren't likely to be around next year either.
Ashlie and Kevin Hashimoto, who are purchasing a home in Salt Lake City near Liberty Park, also were attracted to low mortgage rates. But a federal income tax credit of $8,000 geared toward first-time home buyers sealed the deal.
Their monthly payments on their first home will be only about $300 more than the couple's rent at a nearby apartment complex.
"We feel like we're extremely lucky to be getting the deal that we're getting," said Ashlie Hashimoto. "This was such a great time for us to buy a house."
Buyers in other counties are snapping up deals, too. In Tooele County, the median selling price in the first quarter was down 6.4 percent to $168,546. Utah County was down 2.6 percent to $224,000, followed by Davis County, down 1.1 percent to $218,106. Only Weber County had a selling price that didn't decline. It remained unchanged at $165,000.