Forecast: Salt Lake County home sales, prices to surge
Even against a backdrop of fresh worries about the U.S. economy, the mood on Wednesday among hundreds of Salt Lake County real estate agents and lenders about expectations for 2013 home sales was just short of ebullient.
"Did you hear those numbers?" Mary Ann Anderson, a Chapman Richards & Associates, asked after an upbeat, hourlong housing forecast presented by the Salt Lake Board of Realtors.
"We've got all the pieces of the puzzle in place to build on the momentum that we have been moving through for a year or so," Anderson said.
Speakers at the event presented a feast of facts showing how the housing market began a slow recovery late in 2011, picked up speed last year and today is poised for the best year since 2007, thanks to Utah's strong economy, which emerged sooner from the recession and in better shape than that of most other states.
Not even news Wednesday morning that the U.S. economy shrank in the fourth quarter for the first time in more than years could dampen the outlook.
"We've got about the best numbers we've had in over five years," said James Wood, director of the University of Utah's Bureau of Economic and Business Research, who gathered the data and whose pronouncement was met with cheers from close to 500 people in the audience. "I think we have a good foundation right now for a good, solid recovery in the real estate industry."
The facts, Wood said, that built the foundation for the 2013 forecast include a 15 percent increase in home sales that touched every city in the county last year, a 6 percent increase in the median sales price of homes, record low interest rates and the smallest number of active home listings in four years.
This year, sales of new and existing homes are likely to rise 15 percent to 20 percent over 2012, reaching as high as 13,000 units, said Wood, who's considered an authority on Utah's housing and construction industries.
A combination of factors points to demand exceeding supply, from high affordability rates a median-income household could afford 80 percent of the homes that were sold in the county last year to improving job numbers, historically low mortgage rates and a growing population (50,000 households were created during the recession). That will put upward pressure on prices, Wood said, who thinks they probably will rise 10 percent to 12 percent this year.
"It looks promising, definitely," said Teri Rio, a loan officer at Eagle Home Mortgage in Cottonwood Heights. "There is more optimism among buyers. They are bidding on houses now."
Reinforcing the optimism, Kurt Badenhausen, a Forbes magazine senior editor, noted that Utah has been in the top five in each of the past seven years in the publication's rankings of the best states for business, and in 2010 it moved into the No. 1 spot, where it has remained for three years straight.
"If I'm a company or a homeowner, where am I going to feel comfortable for the next 10 years? In a state like California that is chasing away companies with its tax policies and high costs, and where residents are going to be stuck with a bill for a government that runs huge deficits every year? Or in Utah, with a pro-business regulatory climate that is attracting jobs, and a government that spends responsibly and keeps taxes stable? I'll take Utah every time," Badenhausen said to more audience cheers.
Badenhausen said the aim of the Forbes list is to gauge the economic climate for business and careers in each state. The feature gives companies and site selection experts a good place to start their searches for places to move or expand, he said.
Because of the Forbes list, as well as rankings by other organizations, Utah is widely known for its low business costs, educated and multilingual workforce, lightly regulated business environment, job growth and quality of life, Badenhousen said.
"Utah was incredibly resilient during the recession and emerged from it [faster] and in better shape than any other state. By Forbes' count, Utah has the best business climate in the country," he said.
Wasatch Front home price database
2013 housing market predictions
Single-family home sales will increase 15 percent to 20 percent, to around 13,000 units, from 10,978 in 2012
Prices will increase 10 percent to 20 percent
Condo, duplex and town home sales will rise 17 percent, to 2,600 units from 2,225 last year
Source: Salt Lake Board of Realtors