Salt Lake County home listings still low despite reviving sales
The number of homes listed for sale in Salt Lake County is growing but is still unusually low despite strong demand from shoppers back in the market after sitting out the recession.
There were 6,465 active listings in the county in the second quarter, according to the Salt Lake Board of Realtors. That was up a sharp 21 percent from the same April-through-June period last year.
But it was still sub-par compared to past years, and real estate agents say it's hard to find an acceptably priced house in good condition especially if it's aimed at a first-time buyer.
"If you are out there trying to find a nice home and priced well, it's still tight ... there is a lot of junk out there, unfortunately," said Donna Pozzuoli, an agent at Prudential Utah in Bountiful.
The second-quarter inventory was still only even with the second quarter of 2009, when the Great Recession was giving way to the slow recovery. It remains well below any of the pre-recession years going back to 2000 when the count was 6,221 listings in a housing market that was much smaller.
"It's still tough to find something good," said John Calatano, a broker with Equity Real Estate-Advantage in Sandy.
If sales are a guide, lots of homes should be on the market. The number of single-family houses sold in the April-May-June period totaled 4,180 units, up 18 percent from the same three months of 2012. The median sales price in the second quarter was $249,700, a 17 percent increase from last year. And the average number of days a listed home sat on the market before it sold was 63 days, a month less than 98 days in last year's second quarter.
"You would expect that more people would put their homes on the market," said Jim Wood, a real estate expert and director of the University of Utah's Bureau of Business and Economic Research.
One reason they haven't is because many would-be sellers have underwater mortgages.
After the real estate bubble collapsed and prices began to slide in late 2007, a lot of homeowners found themselves owing more on their mortgages than their homes were worth.
Unless they were willing to accept a loss, selling wasn't an option.
"That traps a lot of people. Basically, anybody who bought a home between 2004 and 2008 is probably underwater," Wood said.
In the first three months of this year, 19.1 percent or more than 92,000 of 480,000 mortgaged homes in Utah were either underwater or within a whisker of slipping into negative territory, according to CoreLogic, a property information provider. Bad as that was, it was an improvement from the fourth quarter of 2012, when 22.8 percent were in trouble.
"As prices go up, it drives that negative down, but it's still an impediment. Those people can't really get what they want out of their houses right now, so they will wait a little longer" to list their homes for sale, Wood said.
The gains have put many homeowners right-side up in their mortgages.
Angie Domichel Nelden, a real estate agent at Coldwell Banker Residential, said a family that bought a home in Salt Lake City's Sugar House neighborhood in 2008 just sold their property for a profit.
But Domichel Nelden also acknowledged she still wonders whether someone who bought a home when prices were at their peak will be able to sell today without paying some of the buyer's closing costs.
"You wonder if they are able to get out without bringing money to the table," she said.
Some would-be sellers are hanging back because they hope prices will rise further. If that happens, more people who bought during the 2004-2008 period when prices were at their highest will see that they can at least break even, and that should increase listings, Wood said.
Other sellers think the sharp rise in home values hasn't run its course and if they sell now, they will forgo a bigger profit later on.
"A lot of people are saying it's on the upswing. If we wait a little longer we can get those extra dollars," said Dave Frederickson, president of Keller Williams Salt Lake.
Prices have risen steadily since they reached a bottom in 2011 and are now close to where they were in the second quarter of 2008, when the median sale value was $251,400. That is still below the $256,000 peak reached in the second and third quarters of 2007, before the recession began in December of that year. Frederickson said he thinks further price increases are likely, but he isn't eager to see them continue to go up as fast as they have lately. More double-digit increases like the recent 17 percent housing price gain would probably produce another real estate bubble, he said.
"Utah is generally a 5 percent state. A lot higher puts us in an area where we aren't comfortable," he said.
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