Surging prices and limited supply pushed home sales on the Wasatch Front to their lowest level in three years, with Utah’s urban counties seeing significant market slowdowns as 2018 ended. Full pricing and sales data by ZIP code illuminate what is now an extended trend.
As prices and mortgage interest rates continued to rise, 6,781 single-family homes changed hands over the five-county area in the past three months, nearly 9 percent fewer than sold in fall 2017, according to new figures published Monday by the Salt Lake Board of Realtors.
All five Wasatch Front counties saw home sales decline for the fourth quarter of 2018, according to the latest data, ranging from 4 percent down in Weber County and 5 percent in Davis, to an 11 percent drop in rapidly growing Utah County and a sizable 14 percent decline in Tooele County. Sales for October, November and December fell 10 percent in Salt Lake County.
Prices, meanwhile, leapt over the same period. In Salt Lake County, the median home price stood at $350,000 at year’s end, fully $25,000 higher than it was in those same three months a year prior. Across the wider Wasatch Front, the median home price was at $334,000, 11 percent higher year over year.
Several experts said Monday the sustained trend of rising prices had combined with hikes in mortgage rates to force some first-time buyers out of the market. For the population center of Salt Lake County, the 2018 sales decline came after total homes sales for 2017 dipped about 1 percent below their levels for 2016, the county’s third highest year for sales on record.
“While new listings are on the rise, overall inventory levels are not keeping up with homebuyer demand,” Scott Robbins, president of the Salt Lake Board of Realtors and a Draper-based agent with Sotheby’s International Realty, said in a statement.
The new data also come as issues in Utah with housing affordability are claiming the attention of city officials, business leaders and state lawmakers. According to the board’s latest report, six ZIP codes along the Wasatch Front now have median home prices above $500,000:
• 84004 in Alpine ($577,500).
• 84103, spanning the Avenues in Salt Lake City ($562,580).
• 84020 in Draper (530,000).
• 84310 in Weber County’s Eden ($529,200).
• 84108 on Salt Lake City’s east bench ($521,125).
• 84117 in Holladay ($519,500).
Experts say that even though new homes are coming on line along the Wasatch Front, a combination of rising costs for undeveloped land, building materials, construction labor and other items continues to push up median housing prices.
And in further evidence of market tightening, the quarterly data released Monday also show a typical Wasatch Front home listed for sale was on the market for only 40 days before it sold, three days shorter than for the fourth quarter of 2017.
A representative for one of the region’s major lenders predicted that additional interest rate hikes by the Federal Reserve in 2019 could further depress buyers’ purchasing power and leave more Utahns struggling to afford a new mortgage, even as job and wage growth in Utah continue to drive home demand.
“Affordability has become an issue,” said Roger Jones, senior vice president and mortgage division manager for Zions Bank, who added that would-be first-time buyers and existing homeowners seeking to move up in the market were both being sidelined.
Jones predicted that some buyers would be drawn to mortgages with adjustable interest rates that locked in lower rates in the first years, as a hedge against the possibility of rate upticks through 2019 and beyond.
Many ZIP codes with the highest volume of fourth-quarter 2018 home sales nonetheless saw year-over-year declines. Data show sales were strongest in Clearfield, Farr West, Lehi, Herriman, Layton, Eagle Mountain, Kearns and Roy.
Of 36 ZIP codes within Salt Lake County, only nine saw home sales at the end of 2018 that exceeded sales for the same period a year before — all are areas on the Salt Lake Valley’s western and southern suburbs.
And of 21 ZIP codes in Utah County, only six had higher fourth-quarter sales in 2018 than the year before, centered on Lehi, Provo, Alpine and Mapleton.
The fourth-quarter picture for condominium sales, often an indicator of buyers seeking bargains, was mixed.
Prices for condos rose dramatically in all five Wasatch Front counties, ranging from 8.1 percent in Davis County to 17.8 percent in Weber County. But sales were flat or declined slightly in Weber, Utah and Salt Lake counties, leapt by a dramatic 36.8 percent in Tooele County and plunged by 23 percent in Davis County.