Consumers are buying more homes in Salt Lake City and nearly every other area of the country, the latest indication that the housing market could slowly be on the mend.
Median existing home and condo selling prices in the Salt Lake area rose 4 percent, to $195,000, in April, compared with the same month in 2011, the Salt Lake Board of Realtors reported Tuesday. The number of homes and condos that changed hands rose 15 percent, to 1,088 from April of last year.
Positive April signals in SLC
Median price » Up 4 percent, to $195,000
Home-condo sales » Up 15 percent
The year-over-year increase in selling prices is the first for an April in three years, the board said. Selling prices, however, are still well off the April 2008 peak of $234,000.
Realtor DeAnna Dipo of the Salt Lake Board of Realtors said she isn’t surprised by the rise.
"We’ve been seeing multiple offers in a lot of instances, inventory is low and demand is higher — all of those things tend to boost prices a bit." Low mortgage rates are another factor, motivating those who were waiting for the right time to buy, she added.
"Many buyers who were waiting to see when prices will stop falling have decided to buy now."
Nationally, sales of previously occupied rose 3.4 percent in April from March, to a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors said. That nearly matches January’s pace of 4.63 million —the best in two years. It is still well below the nearly 6 million that most economists equate with healthy markets.
A pickup in hiring and cheaper mortgages, combined with lower home prices in most markets, has made home buying more attractive. Although many economists acknowledged that the market has a long way to go, most said the April sales report was encouraging. Another positive sign is that an increasing portion of those sales are from first-time buyers, who are critical to a housing recovery.
"The trend in sales is upward, and we think it has a good deal further to go over the next few months as payrolls pick up and mortgage availability improves," said Ian Shepherdson, chief U.S. economist for High Frequency Economics.
Sales rose last month from March in all regions of the country —5.1 percent rise in the Northeast, 3.5 percent in the South, 4.4 percent in the West and 1 percent in the Midwest.
In April, first-time buyers made up 35 percent of sales. That’s up from 32 percent in March.
"First-time homebuyers are slowly making their way back," said Jennifer Lee, an economist at BMO Capital Markets. "That is still below the 40 percent-to-45 percent range during healthy times, but the highest in almost half a year."
The report measures completed sales. A sale typically closes a month or two after a buyer signs a contract to buy a home. But a growing number of buyers in recent months have been investors who pay cash, which speeds up the process.
The number of buyers who signed contracts to buy homes in April rose to the highest level since April 2010, when buyers could qualify for a federal home-buying tax credit.
The increase suggests sales could keep rising in May and June.
"People believe that interest rates are as low as they are going to get and that prices have hit rock bottom. So they are getting off the fence," said Tony Geraci, the owner of Century21 Homestar, a real estate firm in Cleveland.
Homes at risk of foreclosure accounted for 28 percent of sales last month. That’s roughly in line with March sales but down from 37 percent of sales in April 2011.
The decrease in foreclosures helped boost the year-over-year median sales price in April. It rose to $177,400 nationally, which is 10.1 percent higher from the same month last year.
Still, many would-be buyers are having difficulty qualifying for home loans or can’t afford the larger down payments being required by banks. Even some would-be home buyers are holding off because they fear that home prices could keep falling.
Previously occupied homes represent 80 percent of the overall home market.
Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.