Median home price in Salt Lake rises for first time in 5 years
The Salt Lake-area single-family home market has suddenly shifted sellers' way. But at the same time buyers are finding mortgage interest rates at record lows meaning that selling prices are rising for the first time since the 2007 collapse of the housing bubble.
The single-family median price was $214,900 in the second quarter, up nearly 6 percent from the same period in 2011, the Salt Lake Board of Realtors said Thursday in releasing its quarterly statistics.
The last time prices increased in Salt Lake County was in the second quarter of 2007, when the median reached a peak of $256,000.
Donna Pozzuoli, president of the Realtors group, said inventories of foreclosures have fallen, short sales (in which a lender agrees to accept a price worth less than the outstanding loan) are proceeding more quickly and interest rates are very low.
That means "we're getting multiple offers because we've got sellers ready to listen for a change and buyers who are feeling confident enough to proceed with the low interest rates," she said. "I think that's what's really driving it."
Realtors said they are having to educate potential buyers about the change in the market from one in which they had a greater choice of houses and could make offers below the seller's asking price.
"There's no more haggling if the house is priced correctly," said DeAnna Dipo, of Coldwell Banker Residential in Midvale and past president of the Salt Lake Board of Realtors.
On Thursday, mortgage buyer Freddie Mac said the average rate for 30-year fixed mortgages was down to 3.5 percent, the lowest over the past 60 years. The average on the 15-year fixed mortgage also was at a record low, 2.8 percent.
Dipo said she had one client obtain a 30-year rate below 3 percent.
For homeowner Jaran Bailey, however, the low inventory has been a problem in Farmington for two years, the amount of time he has spent looking for another home for his family. He ended up buying a newly constructed home from a builder.
"It was very frustrating because there just wasn't a lot of inventory on the market at that time," he said. There were "a lot of short sales, a lot of things I just didn't want to get involved in."
Kimberlee Casaday, the president of residential lending for Zions Bank, said the bank has seen an increase of about 30 percent in loan applications this year over last. A variety of loan products, low interest rates and affordable prices that are back to levels of several year ago are driving up consumer confidence, she said.
"Home prices have retreated back to 2002-2003 levels and because of that and those prices being somewhat settled, they can go out and buy something that's larger than what they could have in the past couple of years," Casaday said.
The number of single-family homes sold in Salt Lake County from April through May totaled 2,954, 12 percent more than during the same period last year. Single-family homes sold in the second quarter were on the market for an average of 99 days, down from 122 days last year.
Along the Wasatch Front in Utah, Davis, Salt Lake, Weber and Tooele counties there were 6,002 single-family homes sold in the second quarter, up 11 percent from the same three months of 2011. The median price of all single-family homes sold in those counties was $195,500, up 3 percent from last year.
There were 582 condominium sales in the second quarter in Salt Lake County, a 27 percent rise over the 459 units in the second quarter of last year. The median price of condos sold fell to $140,000, off 3 percent from $143,900 last year.
Dave Frederickson, principal broker at Keller Willliams Realty and the Board of Realtors president-elect, said another factor in a low-inventory market is that many houses have been for sale for some time and have not sold because of various problems, including structural defects or encumbrances such as short sales that can take longer to conclude.
"You can take a look at the inventory that's on the market and say there's X number of homes," he said. "But there's a certain percentage of that inventory that is unsellable. So the actual inventory of sellable property is extremely low."
In Davis County, the median sales prices rose 3.42 percent from the second quarter of 2011 to the same period this year, to $196,500. In Utah County, the increase was less sharp, from $191,900 in 2011 to $195,000, or a 1.62 percent increase.
Weber County saw the median price go from $143,212 in 2011 to $145,000, or 1.25 percent. Tooele County's increase was 6.5 percent, to $149,000.