This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
What housing recovery?
The Salt Lake Board of Realtors released its second-quarter report Tuesday, and home values and sales still aren't headed in the right direction.
From April through June, sales of single-family homes in Salt Lake County declined by 11.4 percent, to 2,591, compared with the same period last year, while the median selling price fell by 8.4 percent, to $201,595. The pattern was the same in the other Wasatch Front counties.
"The housing market is just fragile and extremely weak," said James Wood, director of University of Utah's Bureau of Economic and Business Research, who reviewed the data.
Wood and other forecasters had thought that enough jobs would have been created by now to jump-start the housing market and help compensate for the large volume of foreclosures and other distressed properties. But that hasn't happened.
About one-third or more of home sales along the Wasatch Front involve properties that are distressed in one way or another, Wood said. "People who don't need to buy or sell right now are waiting on the sidelines," Wood said. "We're just not used to houses being a depreciating asset."
The distressed-property situation isn't showing significant signs of improvement, either. An estimated 8 percent of Utah households with a mortgage are behind on payments. About one-quarter of homeowners in Salt Lake City are either "underwater" — meaning they owe more than their homes are worth — or are near that point, according to housing data firm CoreLogic.
Although overall sales were down along the Wasatch Front in the second quarter, some areas experienced an increase, said DeAnna Dipo, president of the Board of Realtors. Sales in the Holladay area were up 30.8 percent year-over-year. Sandy was up 21.1 percent.
Dipo attributes part of the broader year-over-year decrease to the uptick in home sales that occurred in the months before the federal home-buying tax credit of $8,000 expired early last year. Home sales slumped after the incentive disappeared.
Like Wood, Dipo is surprised that the report wasn't more upbeat. "Mortgage rates are so low," she said. In fact, many economists say in terms of home prices and financing costs, homes may be at their most affordable now than they will be a year from now.
According to the report released Tuesday, the condo market remains weak, as well. In Salt Lake County, 441 condominiums sold in the second quarter, down 27.4 percent from the 607 condos that sold in the same period last year. The median condo price fell to $143,900, down 11.6 percent from $162,750 a year ago.
In addition to weak job growth and the large volume of distressed properties, another factor putting downward pressure on home prices is buyers who want to drive a hard bargain as a hedge against future price declines.
"Consumers are still buying," she said. "But when they do buy, they want the bargain of the century."
Twitter: @cheapchick
Facebook: facebook.com/onecheapchick