‘Buyers are pulling back’ — Homes sales drop in early 2019 along the Wasatch Front as prices continue to climb

(Rick Egan | Tribune file photo) New home construction in South Jordan. The latest report from the Salt Lake Board of Realtors show sales of single-family homes declined in all five counties along Utah's Wasatch Front in the first three months of 2019, as prices rose.

Sales of single-family homes declined in all five counties along the Wasatch Front in early 2019 as prices continued a multiyear trend upward, though that rise in prices appears to be slowing significantly.

A total of 5,609 houses changed hands across the region in January, February and March, according to the Salt Lake Board of Realtors, for a drop of 9.6% compared with the 6,202 sold in the same three months of 2018.

“It’s definitely not a sellers’ market, except in some price ranges,” said Scott Robbins, the board’ president. Despite the slowing, Robbins said the region’s housing markets remain strong, with signs that new homes and rentals coming on line could ease some of the sluggishness.

“I’m not scared at all,” said Robbins, who is a real estate agent with Summit Sotheby’s International Realty. “The bubble is not bursting.

“If you have a good listing, it is gone within a week, still with multiple offers,” he said. "People are still out looking.”

Still, board data indicates homes in Salt Lake County remained on the market five additional days in early 2019 compared with the year before — at 51 days compared with 46 days for the same three months last year — as prices pushed a little further out of reach for the average buyer.

(Christopher Cherrington | The Salt Lake Tribune)

Sales of condominiums — often a go-to for buyers priced out of single-family homes — also fell in three of the five Wasatch Front counties in the first quarter, remaining all but flat in Tooele County and rising by 5% in Utah County, the report said.

“I suspect it’s an indication of market resistance to prices by buyers,” said James Wood, a senior economist at the University of Utah’s Gardner Policy Institute. “Buyers are pulling back a bit.”

Housing advocates say residents who rent and those aspiring to buy face an unprecedented shortage in homes affordable for their income levels. And many are spending more than half their total earnings on rent or their mortgage payments.

The latest Salt Lake Board of Realtors report found the median home price in Salt Lake County is now hovering at about $350,250.

That was about 3% higher than it was a year before — and fully 30% above where it stood five years ago, when the first-quarter median home price for Utah’s most populous county was $105,250 lower, at $245,000.

Homes in other Wasatch Front counties saw far larger price bumps year over year in the first-quarter numbers, up 7.3% in Utah County, 7.8% in Tooele County and 9% in Davis County.

Weber County’s price gain, meanwhile, was in double digits, at 10.1% higher than the same time last year as its median sales prices reached $253,250.

Wood said those first-quarter increases could be masking a more nuanced trend, one signaling that economic forces may soon begin to ease the region’s home price escalation.

The numbers, according to Wood, show that Wasatch Front prices grew by roughly 12% in December, approximately 8.5% in January and 8% in February, then saw a 2.7% gain in March — a sign the overall price trend is slowing.

Separate numbers over the summer indicated a total of 3,725 new homes either under construction or poised to break ground across a seven-county region centered on Salt Lake County. That report, issued by Metrostudy, also revealed a 43% jump year over year in construction of attached homes for sale, including condominiums, duplexes, town homes and row houses.

And while those new supplies could help boost sales going forward, homebuilders also have struggled to keep construction costs down amid chronic shortages of labor and recent price increases on key building materials such as steel and lumber.

Utah’s rental markets may be seeing similar supply relief, Wood said.

Thousands of new apartment complexes have opened in Salt Lake County in recent years as a flurry of projects approved between 2014 and 2016 are completed and open to customers. At least 5,000 dwellings are now under construction in the county for rent at market or luxury rates, Wood said.

“We’re going to see how deep that market goes,” he said.

Another 2,500 or so apartment units are being built in the county with the use of low-income tax credits to cater to tenants with below-average incomes. Those new supplies, too, could help ease demand for more affordable rentals — although Salt Lake City alone estimates it lacks at least 7,000 dwellings affordable to residents earning less than median wages.

The Wasatch Front’s three most expensive ZIP codes are now 84108 and 84103, which cover portions of Salt Lake City’s east bench and have an average median price of $657,000 and $592,000, respectively; and between them, 84004, which includes parts of Alpine in Utah County, at $627,500.

Other high-priced ZIP codes include 84317 in Huntsville in Weber County, with a median price of $585,000; 84124 in Salt Lake County’s Holladay, at $525,000; and the 84020 area in Draper, at $520,087.

To search the latest home sales and price data on all Wasatch Front ZIP codes, visit http://www.sltrib.com/homeprices.